Government: "50% Rent Reduction for Rental REIT Commercial Spaces, 2-Year Freeze on Rental Housing"

[Asia Economy Reporter Moon Jiwon] The Ministry of Land, Infrastructure and Transport, the Housing and Urban Guarantee Corporation (HUG), and the Korea Land and Housing Corporation (LH) announced on the 31st that they will reduce rents for commercial spaces and rental housing owned and operated by public-supported private rental REITs and public rental REITs to help small business owners and rental housing residents struggling due to the prolonged COVID-19 pandemic.

First, tenants operating in commercial spaces owned by private rental REITs and public rental REITs funded by the Housing and Urban Fund will receive a 50% rent reduction for six months.

The target includes 261 commercial spaces owned by 26 rental REITs (25 private rental REITs and 1 public rental REIT). The rent reduction will be fully covered by the Housing and Urban Fund.

Through this, the rent burden for each tenant will be reduced by about 960,000 KRW per month, resulting in a total rent support effect of approximately 1.5 billion KRW. The rent reduction will be implemented temporarily for six months starting next month after internal decision-making procedures within each REIT.

Additionally, to alleviate the housing cost burden for vulnerable groups facing difficulties in maintaining their livelihoods, rents for tenants in rental housing operated by public rental REITs funded by the Housing and Urban Fund will be frozen for the next two years.

The target includes a total of 63,779 households across 77 complexes owned by 17 public rental REITs (public rental and Happy Housing). The burden from the rent freeze will be jointly shared by the Housing and Urban Fund and LH.

The rent freeze is expected to reduce annual housing costs by 120,000 to 130,000 KRW per household, resulting in a total support effect of approximately 94.4 billion KRW. This measure will be applied for two years from the contract renewal date for complexes whose contract renewal period falls between January 1 of this year and December 31 of next year.

Han Seongsu, Director of the Housing Fund Division at the Ministry of Land, Infrastructure and Transport, said, "Going forward, the Housing and Urban Fund will do its best to fulfill its public role by utilizing the fund as a strong support to overcome the COVID-19 crisis through stabilizing the lives of the people."

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