Seoul City Launches Long-Term Jeonse Housing Supply... Recruiting 1,900 Tenants

Residence for up to 20 years at less than 80% of surrounding market prices
700,000 households to be supplied over 5 years... Twice the total volume of 14 years

[Image source=Yonhap News]

[Asia Economy Reporter Kim Hyemin] Oh Se-hoon's 'Long-term Jeonse Housing' is set to be supplied in full swing. The Seoul Metropolitan Government announced on the 24th that it will begin recruiting tenants for the first batch of 1,900 units.

Long-term Jeonse housing allows residents to live for up to 20 years with a deposit of 80% or less of the surrounding Jeonse market price. Targeting middle-class households without homes, it is mainly supplied in medium to large-sized units, making it very popular.

The first supply of long-term Jeonse housing consists of 1,900 units. The preliminary tenant recruitment announcement will start on the 27th, and applications will be accepted through the Seoul Housing and Communities Corporation (SH) website from the 15th to the 27th of next month. The 1,900 units include 583 units for tenants of 137 complexes such as Godeok Gangil 13 Complex and Dongjak Teunsia, moving in March next year, and 1,317 units for prospective tenants prepared for vacancies expected in 29 complexes including Godeok Gangil and Magok by the end of next year.

The average deposit by area is 403,773,000 KRW for units under 60㎡ exclusive area, 424,107,000 KRW for units over 60㎡ up to 85㎡, and 606,875,000 KRW for units over 85㎡. Applicants must be members of a household without a home residing in Seoul as of the tenant recruitment announcement date and meet certain income, real estate, and automobile criteria according to the applied unit size.

For units under 85㎡ exclusive area, subscription priority is determined by the number of payments to the comprehensive subscription savings, income conditions, and residence area; for units exceeding 85㎡, it is determined by the deposit amount and subscription period of the comprehensive subscription savings. About 250 units among the supply will be preferentially allocated to laborers' dependents, persons with disabilities, the elderly, newlyweds, and others. The results for Seoul screening candidates and winners will be announced on October 14 and February 15 next year, respectively. Move-in is scheduled to begin in March 2022.

Mayor Oh plans to significantly increase the supply of long-term Jeonse housing to stabilize the Jeonse market. He announced a plan to supply a total of 70,000 units over five years until 2026. This is double the approximately 33,000 units supplied over 14 years since its first introduction in 2007. The plan is to greatly increase the volume through the existing long-term Jeonse housing method and a new method called 'Sangsaeng Housing.'

To this end, the system has also been improved. First, the conventional practice of recruiting new tenants only after existing tenants move out will be replaced by a new preliminary tenant system similar to housing subscription. Based on the contract end date, vacancies will be predicted in advance, and prospective tenants will be selected and moved in as soon as existing tenants leave. A Seoul city official said, "Until now, even if existing tenants moved out, the units had to remain vacant for several months until the next tenant was selected," adding, "This will enable rapid supply of long-term Jeonse housing and minimize vacancy occurrences."

The 'Rental Business Coordination Review Committee,' which had been operated only with internal members to decide the supply price of long-term Jeonse housing, has appointed many external experts and changed the price calculation method. Also, to prevent the problem of excessively high Jeonse deposits due to the recent sharp rise in Jeonse prices, the supply price will be reviewed every two years and adjusted within 5% of the Jeonse deposit increase or decrease.

Detailed plans for the new type of long-term Jeonse housing called 'Sangsaeng Housing' are currently being established. Sangsaeng Housing is based on the idea of the public sector leasing private land in consideration of Seoul's shortage of available land and providing incentives such as zoning changes and tax benefits on the leased land.

The existing long-term Jeonse housing will also be redesigned to adjust the maximum Jeonse period considering the average residence period so that more households without homes can benefit.

Kim Seongbo, Director of Seoul's Housing Policy Office, said, "We will steadily supply long-term Jeonse housing where residents can live stably for a long time at prices lower than the surrounding market," adding, "We will also improve the system to ensure that more citizens without homes benefit and to increase the speed and efficiency of supply."

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