"Start Construction by Paying Only Land Cost Excluding Construction Cost"… LH to Promote 'Package-Type Public Offering' for 8,800 Households

8800-Household 'Package-Type Public Offering Project' in Pyeongtaek Godeok International New City
Construction Starts with Only Land and Construction Cost Difference, "2 Years Faster Than Existing Supply Method"

When private construction companies carry out construction on public housing sites, a path has been created to proceed with the project by paying only the land cost excluding the construction cost. This measure aims to revitalize private housing supply, and the first project to apply this is the Godeok International New City in Pyeongtaek, Gyeonggi Province. For example, if the land cost for a certain size of land in Godeok New City, Pyeongtaek is set at 100 billion KRW and the construction cost at 90 billion KRW, it means that construction can start with only the difference of 10 billion KRW. This is a measure to further promote private housing construction.

Example of the structure of a 'Package-type Public Offering Project'. [Source: Korea Land and Housing Corporation (LH)]

Korea Land and Housing Corporation (LH) announced on the 15th that it will officially promote the 'Package-type Public Offering Pilot Project' with this content in Godeok International New City, Pyeongtaek. The project scale is 8,800 households. This project was introduced following the Ministry of Land, Infrastructure and Transport's announcement in March of the 'First Promotion of Package-type Public Offering Project to Revitalize Private Housing Supply.'

The package-type public offering project allows private developers to start construction by paying only the amount excluding the land cost and construction cost when signing the land sale contract. Previously, the full payment of the land cost was required before starting construction.

For example, if the land cost is 100 billion KRW and the construction cost is 90 billion KRW, the developer can pay only the difference of 10 billion KRW as a deposit to build the housing. However, the developer must also submit collateral such as a land payment guarantee bond. The developer will pay the remaining land cost of 90 billion KRW later through sales proceeds.

Private developers must build not only private apartments but also public apartments in this public offering project. LH will increase the supply of public housing through this. An LH official said, "It is expected that various methods will be possible, such as private developers building public housing after private sales or building private and public housing together."

This pilot project consists of a unit combining land supply for sale to the private sector (8 blocks, about 5,400 households) and a private participation project to build public housing (6 blocks, about 3,400 households). The project cost scale is about 1 trillion KRW for land supply price and about 1 trillion KRW for the private participation project, totaling about 2 trillion KRW.

With the promotion of the package public offering project, early supply of private sale housing becomes possible. Since the use period of the sold land is advanced and the project is promoted accordingly, the housing supply period is about 2 years earlier than existing housing.

The pilot project site, Godeok International New City, has abundant underlying demand such as the extension of the Greater Seoul Metropolitan Express Railroad (GTX) lines A and C and Samsung Electronics Pyeongtaek Campus. Also, there are many housing sites immediately available for supply, maximizing the housing supply effect.

The package-type public offering project will start with a preliminary announcement on the 15th, followed by the official announcement at the end of this month. Then, project applications will be accepted by the end of next month, and project proposals will be received and evaluated in November. LH plans to select a preferred negotiation partner through this process and proceed with the contract within the year.

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