"How Do Six People Sleep in a 44㎡ Apartment?" Subscription Point System Controversy Sparked by Gangnam 'Lottery Subscription'

#Office worker Mr. Park (48) and his wife recently closed their subscription savings account, which they had maintained for nearly 20 years. Since they had previously owned a small apartment in Gyeonggi Province, they were not eligible for the “first-time homebuyer special supply,” and because they have no children, they determined that winning a popular apartment lottery in Seoul through the subscription points system was virtually impossible. Instead, Mr. Park changed his home-buying strategy by purchasing a villa in a redevelopment area within Seoul and decided to wait for the opportunity to receive a member’s allocation.

Controversy is growing over the policy limitations of the “subscription points system” following the results of several small apartment lotteries in the Gangnam area. In these Gangnam-area apartments-most of which have only two or three rooms at most-the number of dependents has become the key variable in determining who wins the lottery.

O.Terbanpo

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◆Can a family of six live in a 44㎡ apartment?= The results of the recent lottery for “O.Terbanpo” in Jamwon-dong, Seocho-gu, revealed that the cutoff score for the 44㎡ unit was 74 points, and the highest score among winners was 79 points. This has fueled calls for improvements to the subscription system.

A score of 74 points requires a family of five, and 79 points requires a family of six-the maximum possible. If a six-member household were to live in a 44㎡ apartment, each person would have only 7.3㎡ of living space. This is similar to the minimum 7㎡ room size for goshiwon (small boarding rooms) as stipulated by Seoul city ordinances. Moreover, the 7.3㎡ figure combines all living spaces, including bedrooms, kitchen, and bathroom.

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The Banpo Raemian Trinione, which was sold in November last year, is a representative example. This apartment, supplied only in small and mid-sized units ranging from 59㎡ to 84㎡, had cutoff scores in the 70s for all seven types. For a family of four, no matter how long their period of not owning a home, winning was out of reach.

The same pattern has been seen in other Gangnam area complexes supplied since then, such as “Yeoksam Central Xi,” “O.Terbanpo,” and “Arc Road Seocho.” The lowest cutoff score was 69 points, which is the maximum possible for a four-person family, and at Arc Road Seocho, the winner for the 59㎡ C-type unit had the perfect score of 84 points.

Experts point out that the mismatch between family size and housing area stems from the current subscription points system, in which the number of dependents has a more decisive impact on winning than do the periods of not owning a home or subscription account membership.

◆Household members with separate incomes also count as "dependents"= Those counted as “dependents” include the account holder and their spouse’s direct lineal ascendants and descendants. The problem is that the system does not consider whether household members have income, but simply whether they are listed on the same resident registration. While there are residency prerequisites-such as “three years or more” for lineal ascendants and “one year or more” for lineal descendants over 30-in reality, this is about “cohabitation” rather than “support.”

More than half of private housing supply is already allocated through special supply, and there are growing complaints that rewarding larger families in general supply excessively excludes those who have maintained a long period of not owning a home and held a subscription account for years.

Currently, special supply proportions for private housing sites with units of 85㎡ or less are as follows: newlyweds 23%, first-time homebuyers 9%, multiple children 10%, and elderly parent support 3%. For example, at La Classe Jade Pine in Noryangjin-dong, Dongjak-gu, Seoul, more than half-189 out of 369 total units-were allocated as special supply.

◆Does family headcount outweigh years without a home or account membership?= The fact that an unusually high score is assigned for dependents is also a source of controversy.

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The points system assigns a maximum of 32 points for the period of not owning a home, 17 points for subscription account membership period, and 35 points for the number of dependents. For the period of not owning a home, two points are added each year, so a maximum of 32 points is reached after 15 years. One point is added each year for account membership, so 17 points is the maximum after 15 years. For number of dependents, the score starts at 5 and increases by 5 for each dependent. With six dependents-that is, a family of seven-the maximum score of 35 points can be achieved.

This means that adding one dependent increases your score by almost as much as two years of account membership or not owning a home. Two years of account membership and not owning a home together add six points, while adding just one dependent adds five points.

As a result, a three-person family (two dependents) cannot score above 64 points, no matter how long they have not owned a home. Even a four-person family cannot exceed 69 points. On the other hand, if you get the maximum 35 points for dependents, then 10 years of not owning a home and account membership will get you to 69 points.

◆The points system disrupts the “first-come, first-served” principle= Some point out that the points system is inconsistent with the “first-come, first-served” principle that the subscription system consistently upheld until its introduction.

Although the subscription system began in the 1970s, the importance of subscription accounts in the housing market became significant with the sale of the first-generation new towns in the Seoul metropolitan area in the late 1980s. At that time, qualifying for top-priority status was based on the order of account opening, and winners were selected by lottery among these applicants.

Although the subscription system has changed over time, the basic framework-giving priority to those with longer periods of not owning a home and subscription account membership-remained intact.

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However, since the introduction of the subscription points system in 2007, “number of dependents” has become the decisive factor for winning. In fact, results from private housing lotteries in the Gangnam area since the fourth quarter of last year show that the number of dependents determined the outcome in most cases.

The higher barriers to entry are also leading to a decline in the number of subscription account holders. According to Korea Real Estate Board’s Cheongyak Home, as of the end of last month, there were 26,051,929 subscription account holders (including comprehensive housing subscription savings, subscription savings, subscription installment savings, and subscription deposits), a decrease of 261,064 from 26,312,993 at the end of October last year.

This drop was especially pronounced in the Seoul metropolitan area. In Seoul, the number fell from 6,425,413 to 6,359,013 over the same period, and in Incheon and Gyeonggi Province, from 8,727,128 to 8,633,226.

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◆No word from the Ministry of Land, Infrastructure and Transport on promised reforms= As cases of fraudulent resident registration to increase the number of dependents have emerged, the government required the submission of National Health Insurance benefit records starting in the second half of 2024. This is to confirm actual residence by checking which hospitals and pharmacies applicants mainly use.

According to the regulations on housing supply, if you win through the points system or as a special supplier for elderly parent support, you must submit benefit records for yourself or your spouse’s direct lineal ascendants or descendants over 30 years old.

After the controversy earlier this year involving Budget and Planning Minister nominee Lee Hyehoon’s fraudulent housing application, the Ministry of Land, Infrastructure and Transport also reviewed reform measures. However, three months later, there has been little progress.

The Ministry had initially planned to announce reform measures related to fraudulent applications in late February this year, but postponed the announcement, citing the need for coordination with related institutions. A Ministry official said, “At this stage, we cannot specify details or timing for concrete restructuring of the subscription system.”

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