[2020 National Audit] Seoul City Must Address Neglect of Youth and Private Operators in 'Station Area Youth Housing Project'

Half of the Youth Housing Units in Guui-dong, Gwangjin-gu, Available Since April This Year Are Vacant
Seoul City's Youth Housing Supply Achievement Rate at 5.7% of This Year's Target
"Housing Supply Must Meet Demanders' Expectations to Realize Qualitative Improvement in Living Conditions"

[Asia Economy Reporter Kim Yuri] There have been calls to enhance the effectiveness of the Seoul Metropolitan Government's station-area youth housing project.

On the 20th, according to data on the 'vacancy status of station-area youth housing units that have started occupancy' submitted by Seoul City to Lee Jong-bae, a member of the National Assembly Land, Infrastructure and Transport Committee from the People Power Party, it was confirmed that half of the youth housing units in Guui-dong, Gwangjin-gu, which began occupancy last April, remain vacant.

The housing units have a deposit of 45 million KRW and a monthly rent of 460,000 KRW. Applying Gwangjin-gu's deposit-to-rent conversion rate of 6.9%, if the deposit is converted to 10 million KRW, the monthly rent becomes 660,000 KRW. Rep. Lee stated, "Contrary to Seoul City's initial promise to supply at prices cheaper than the surrounding market rates, the high prices have led to a decrease in demand among youth."

Looking at the supply targets and actual supply status of station-area youth housing, the annual supply achievement rates have been low except for the early stage of the project in 2017. Rep. Lee also evaluated that the project is being neglected by private developers responsible for the development and operation. In 2017, 7,819 units were supplied against a target of 8,000 units, achieving a 97.7% rate, but after increasing the supply target to 15,000 units in 2018, actual supply decreased to 27.1% in 2018, 42.9% in 2019, and 5.7% as of the end of September 2020.

Regarding this, the development industry explained that due to the prolonged COVID-19 pandemic, the commercial facility sales market has entered a slump, making profitability guarantees for the youth housing project uncertain. Furthermore, after the government's June 17 measures, mortgage loans for rental business operators were completely banned, creating a difficult atmosphere for continuing the project. The youth housing project creates commercial facilities on the lower floors of buildings and sells them, allowing private developers to recover part of the initial project costs early on.

Rep. Lee said, "The project, which started with the purpose of providing housing support for youth, is losing effectiveness because it does not meet the expectations of the demand side," and added, "Efforts should be made to find ways to improve the quality of youth housing to increase satisfaction among actual users and realize qualitative enhancement of housing."

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