Government: "The Best Solution for Rent Stability is Supply... One Million Affordable Public Housing Units"

3rd Emergency Economic Meeting Housing Sector Livelihood Stabilization Measures
Expansion of Public Rental and Housing Supply... Activation of Private Rentals

Amid rising interest rates and soaring house prices, which have further increased the burden of monthly rent and deposit payments for low-income households without homes, the government is set to activate the supply of public and private rental housing under the policy that "supply is the best measure."

On the 15th, at the 3rd Emergency Economic and Livelihood Meeting presided over by the President, the government identified three major measures to stabilize the housing sector: "reducing housing cost burdens," "strengthening tenant deposit protection," and "expanding the supply of public rental housing," and detailed the plans accordingly.

◆ Expansion of Public Rental and Public Housing Supply in the Second Half of the Year = To this end, the supply of public rental housing will first be expanded in the second half of the year. The schedule for supplying construction rental housing will be advanced to secure supply volumes earlier, and especially, the supply of jeonse rental housing for vulnerable groups will be rapidly expanded. The supply timing of 23,000 units of construction rental housing (National and Happiness types) planned for early 2023 will be accelerated to provide an additional 2,000 units within the year. Jeonse rental housing will increase from 21,500 units to 24,500 units.

The supply of public housing will also be expanded. In cooperation with the private sector, the volume of newly purchased and contracted units supplied in prime urban locations will be increased, while qualitative improvements in public housing such as location and quality will be promoted. The government also plans to officially supply themed rental housing designed by private companies that combine residential space design with services tailored to tenant characteristics. Approximately 2,000 units will be publicly offered this year.

Through these efforts, the government plans to supply more than 1 million affordable public housing units during the term, including 500,000 public rental units and 500,000 youth housing units.

◆ Activation of Private Rental Housing Supply = Private rental housing supply will also be activated by encouraging multi-homeowners to bring their units to the market. Priority will be given to activating construction rental housing, which has a net positive effect on housing stock, and the purchase-type registered rental system, which has undergone frequent policy changes, will be normalized according to market conditions.

To activate construction rental housing, the public support types will be restructured and regulations on rental REITs will be eased to ensure sufficient new rental housing supply in necessary areas such as the metropolitan area.

When supplying on private land, regulations such as the upper limit on sale ratios and mandatory donations will be relaxed, but controversies over preferential treatment will be resolved through changes in the excess profit distribution method. Additionally, when supplying on public land, the supply for low-income youth and newlyweds will be expanded (from 20% to up to 30%), and initial rents will be reduced (from about 85% to 70% of market price).

The easing of REIT regulations will allow private investors to sell their shares during the mandatory private rental period, enabling liquidity for private developers and encouraging reinvestment.

Regarding construction-type registered rental housing, which has a significant effect on new housing supply, tax benefits and other measures were announced in June. For the purchase-type registered rental system, a normalization plan focusing on small-sized housing will be prepared and released by the end of the year to activate its positive functions such as stable supply of affordable long-term rental housing.

◆ Improvement of Housing Conditions for Vulnerable Groups = The supply of public rental housing for vulnerable groups will be rapidly expanded, relocation support will be strengthened, and the improvement of old and poor housing areas will be actively pursued.

The existing purchase-type rental housing business, which mainly involves acquiring existing buildings, has been criticized for its limitations in supporting vulnerable groups due to aging facilities, insufficient effects in expanding new spaces, and low purchase prices. Although relocation support for residents of irregular dwellings is underway, some residents refuse to relocate or return to slum areas due to reasons such as detachment from their living bases.

The government plans to expand the housing upgrade support project, which assists residents of goshiwons and slums in relocating to proper housing, to more than 10,000 units annually. Aging public rental housing will be improved through reorganization and remodeling, and slum areas will see improved living conditions through better project implementation methods.

The government stated, "The best measure to stabilize the monthly rent and deposit market is to expand housing supply," adding, "We will expand the supply of public rental housing and affordable public sale housing, and also activate private rental supply to meet the diverse demands of the middle class and others." Furthermore, while expanding affordable housing spaces, the government will accelerate improvement projects for poor housing environments, including households living in irregular dwellings.

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