[News Terms] Growing Support for the Abolition of ‘Jiyeok Jutaek Johap’ (Regional Housing Cooperatives)

On the 18th, Songpa-gu proposed to Seoul City the complete abolition and revision of the ‘local housing cooperative,’ a system created under the former ‘Housing Construction Promotion Act,’ the predecessor of the Housing Act, to help low-income, homeless citizens secure housing. The housing cooperative system first appeared in 1977 to establish the basis for workplace housing cooperatives under the Housing Construction Promotion Act. Later, in 1980, through a legal amendment, local housing cooperatives were defined as ‘cooperatives established by residents within redevelopment zones under the Urban Redevelopment Act and the Temporary Measures Act for Housing Improvement, who do not own housing, to secure housing.’ However, as the term was used similarly to redevelopment cooperatives, it was changed in 1987 to ‘cooperatives established by residents without housing living in the same or adjacent cities (including Seoul Special City and metropolitan cities) or counties to secure housing,’ forming the current local housing cooperative system.

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Although the project involves demolishing existing buildings and constructing new ones like reconstruction and redevelopment, the business methods are completely different. Reconstruction and redevelopment cooperatives are basically projects promoted by landowners. In contrast, local housing cooperatives proceed based on funds raised by recruiting members without securing land ownership. Simply put, members are recruited by saying the location of a certain area is good, so let’s buy land together and build new apartments there; then, using the funds raised, the land is purchased and the construction project is carried out.

To become a member, the head of a household must be either a member of a household where all members have been homeless from one year before the cooperative establishment approval application date until the possible move-in date of the cooperative housing, or the head of a household owning one residential unit with a residential exclusive area (85㎡ or less) among household members. Also, if the head of the household or their spouse is a member of another local housing cooperative or a workplace housing cooperative, they cannot become a member. There are also regional requirements. In Seoul, applicants must have resided in the Seoul, Gyeonggi, or Incheon area for more than six months as of the cooperative establishment approval application date.

The project proceeds through the stages of ‘member recruitment report → cooperative establishment approval → business plan approval → groundbreaking → usage inspection → dissolution and liquidation.’ At each stage, a legally prescribed minimum ratio of land use rights and land ownership must be secured. According to the strengthened Housing Act effective from July 24, 2020, at the time of member recruitment reporting, at least 50% of land use rights must be secured; at the cooperative establishment approval application, at least 80% of land use rights and 15% of actual land ownership must be secured. To receive business plan approval from local governments, more than 95% of land ownership must be obtained. If land ownership is quickly secured and business plan approval is obtained, construction can begin immediately; however, if land purchase fails, the project may be prolonged or canceled, which is problematic. Generally, cooperative bylaws and member subscription contracts restrict voluntary withdrawal of members, so damages from project delays or cancellations fall entirely on the members. This is why some call local housing cooperatives ‘hell housing cooperatives.’

Meanwhile, Songpa-gu suggested changing the qualification criteria for cooperative members by granting membership priority to land and housing owners and tenants within the project area to facilitate land ownership acquisition, and additionally recruiting homeless persons as of the cooperative establishment approval application date. They also proposed abolishing the member recruitment reporting procedure and promoting the project from the cooperative establishment stage. As of last year, there are a total of 118 local housing projects underway in Seoul.

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