Special Housing Supply for SME Workers... Expansion of 'Employment Period Scoring'

Starting Next Year, Period of No Home Ownership Will Also Be Reflected in Scoring

[Asia Economy Reporter Kim Daeseop] The Ministry of SMEs and Startups announced on the 14th that starting next year, the scoring for the length of employment will be expanded and the period of being without a home will be reflected in the scoring for special supply of sale housing for small and medium-sized enterprise (SME) workers.

This policy was prepared jointly with the Ministry of Land, Infrastructure and Transport to support the housing stability of SME workers. The ministry plans to continuously expand support for policies such as special supply of sale housing, priority supply of public rental housing, and youth jeonse deposit loans for SME workers.

The special supply of sale housing is a system that, according to the Housing Supply Rules (Ministry of Land, Infrastructure and Transport Ordinance), provides special supply without competition with general applicants within 10% of the supply volume of national and private housing with a residential exclusive area of 85㎡ or less (sale price of 900 million KRW or less) to long-term SME workers (those employed for 5 years or more or employed at the same company for 3 years or more) under the 'institution recommendation' type.

The specific volume of special supply is determined when the housing construction entity allocates supply volumes to SME workers, demolition victims, national merit recipients, persons with disabilities, veterans, etc., included in the institution recommendation type within 10% of the supply volume, and obtains approval from the market, county governor, or district office head who is the approval authority for tenant recruitment announcements.

SME workers who wish to receive special supply must check the announcement posted on the website of the Regional Small and Medium Venture Business Administration and apply for special supply recommendation. The Regional SME Administration verifies employment status at SMEs, various policy scoring criteria, and supporting documents, and recommends applicants in order of highest scores for the allocated volume. After receiving the recommendation, applicants must apply directly on the application date specified in the recruitment announcement and win the selection.

Last year, a total of 2,851 units were allocated from the project entities for special supply to SME workers, and 1,145 units were recommended. Long-term employed homeless persons are given preferential treatment in the special supply recommendation decision process.

From next year, the government will expand the scoring for length of employment (from 60 to 75 points) and reflect the period of being without a home in the scoring (5 points). If a recommended applicant does not apply, a deduction of 10 points will be given to prevent cases where the next candidate cannot be recommended. These guidelines related to special supply recommendations will be rationally improved and applied from next year.

Regarding priority supply of public rental housing, it is being promoted with a goal of supplying 30,000 units by 2022 according to the 'Job-Linked Support Housing Promotion Plan' for housing stability of SME workers announced by the Ministry of Land, Infrastructure and Transport in November 2018.

The types and construction volumes of the 30,000 units of job-linked support housing are ▲ 11,000 units of 'SME Worker Exclusive Housing' supplied 100% preferentially to SME workers ▲ 4,000 units of 'Startup and Regional Strategic Industry Support Housing' supplied to (preliminary) entrepreneurs and regional strategic industry workers ▲ 15,000 units of 'Industrial Complex Type Happy Housing' supplied up to 90% preferentially to industrial complex workers.

Among these, 2,602 units in 8 locations of SME Worker Exclusive Housing are planned to be constructed. Detailed supply areas and status of job-linked support housing can be found on the Korea Land and Housing Corporation (LH) website. To expand housing support for SME workers, an additional 30,000 units will be supplied by 2025, totaling 60,000 units. The Ministry of SMEs and Startups, Ministry of Land, Infrastructure and Transport, LH, and local governments will jointly work on discovering supply sites.

Also, the SME youth jeonse deposit loan was introduced in June 2018 as a dedicated product to alleviate housing cost burdens for young workers employed at SMEs. This loan product provides rental deposit loans up to 100 million KRW at an interest rate of 1.2% for housing with a deposit of 200 million KRW or less and an area of 85㎡ or less to youth with an annual income of 50 million KRW or less (35 million KRW or less for single-income or single household heads) working at small and medium-sized or mid-sized enterprises. Last year, 96,504 people used this product with a total loan amount of 7.27 trillion KRW.

The Ministry of SMEs and Startups will continue to consult with related ministries such as the Ministry of Land, Infrastructure and Transport to contribute to alleviating housing cost burdens for SME workers.

Government housing support policies are provided individually according to life cycles such as youth, newlyweds, and homeless household heads, but there is almost no support for SMEs that provide dormitories to their workers.

Therefore, plans are in place to provide necessary funds to SMEs that purchase or lease dormitories to support their workers. As a pilot project in 2021, preferential support for SME policy funds will be provided, and in addition to the loan limit per company (6 to 7 billion KRW) for facility funds, costs for dormitory construction and purchase will be separately recognized.

Kim Daehee, Director of SME Policy at the Ministry of SMEs and Startups, said, "Housing support for SME workers is an essential policy to attract manpower to SMEs and induce long-term employment. We will closely collaborate with the Ministry of Land, Infrastructure and Transport, which is in charge of housing supply, to expand support starting from feasible areas." He added, "We plan to actively promote the housing supply situation of the Ministry of Land, Infrastructure and Transport so that workers can own their homes or move into quality public rental housing."

This content was produced with the assistance of AI translation services.