No Construction Delays... Seoul City to Expedite Early Execution of Youth Safe Housing Purchase Costs

552 Billion Won for Youth Safety Housing Purchase
1.718 Trillion Won for Public Rental in Maintenance Projects
Reducing Payment Frequency for Early Execution

Seoul City will expedite the disbursement of 227 billion KRW, including funds for purchasing Youth Safety Housing, to improve the cash flow of construction companies struggling due to the real estate project financing (PF) crisis.

On the 17th, the Dunchon Jugong construction site as seen from Lotte World Tower Seoul Sky in Songpa-gu, Seoul. Photo by Jinhyung Kang aymsdream@

The city decided to accelerate the disbursement to support the normalization of PF project sites. Recently, there has been an increase in construction sites where worker wages are delayed, causing construction schedules to fall behind or projects to be halted due to financial difficulties.

The projects for which Seoul City is advancing purchase payments include 23 Youth Safety Housing sites and 49 public rental housing units purchased through redevelopment projects. The purchase funds consist of 55.2 billion KRW for Youth Safety Housing and 171.8 billion KRW for public rental housing acquired through reconstruction and redevelopment.

Youth Safety Housing, which SH Corporation used to purchase after completion, will now be purchased by construction progress stages, advancing the purchase timing. The city will pay 80% of the purchase cost, including the down payment and interim payments, after construction begins.

For public rental housing purchased through reconstruction and redevelopment projects, the payment process will be simplified to expedite disbursement. Typically, purchase payments for public rental housing in redevelopment projects are paid in installments based on construction progress, but the number of payments will be reduced so that 30-35% of the purchase price is paid early.

For public rental housing with floor area ratio relaxation in reconstruction projects, the number of payments will be reduced from seven to five, with a total of 35% of the purchase price paid early. For mandatory rental housing built for tenants displaced by demolition in redevelopment projects, the number of payments will be reduced from eight to six, with 30% of the purchase price disbursed early.

Han Byung-yong, Director of Seoul City’s Housing Policy Office, said, "Amid the recent real estate market downturn and real estate PF crisis causing instability in the construction market, we expect that expediting the disbursement of funds for Youth Safety Housing purchases will provide relief to developers, associations, and construction companies facing financial bottlenecks." He added, "The city will actively support the normalization of PF project sites."

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