South Korea will supply 20,000 so-called "1,000-won homes" starting next year, offering young adults outside the capital region housing for 1,000 won ($0.70) a day. The ultra-low-cost public rental program is designed to ease housing costs in provincial areas while encouraging young people to settle there.
The Ministry of Planning and Budget has earmarked 1.4 trillion won ($980 million) in next year's budget for the program and plans to supply 10,000 units first, according to relevant government agencies and political sources on the 2nd. Another 10,000 units will be added the following year, bringing the total to 20,000.
Under the program, the Korea Land & Housing Corporation (LH) will buy homes suitable for young residents across areas outside the capital region and lease them at low rates. At 1,000 won a day, monthly housing costs would come to about 30,000 won.
"This is not an existing program but a model the government has newly designed," a government official said. "LH will buy homes outside the capital region that young people would want to live in and provide them." The government set the maximum supply at 20,000 units after consultations with LH.
Ultra-low-cost public rentals of this kind have already drawn strong interest at some local governments. Incheon and other cities have run "1,000-won home" programs, while Hwasun in Jeollanam-do and Taebaek in Gangwon-do have offered housing support for young adults and newlyweds under names such as "10,000-won homes" or "10,000-won apartments," built around low rents.
In Pohang, Gyeongsangbuk-do, 1,055 people applied for 100 units offered this year, a ratio of 10.6 to one. Pohang's version uses homes purchased by LH and offers them to young adults and newlyweds at 1,000 won a day, with an initial two-year term extendable to four years.
The government aims to expand the strengths of such local programs nationwide. The goal is to give young adults outside the capital region housing at sharply reduced cost, creating a basis for them to find jobs and build lives in their regions.
Rental supply for young adults will also increase in the capital region. The government plans to invest 3.8 trillion won ($2.66 billion) from next year to supply 20,000 general-purpose public rental units in locations young people prefer, such as areas near subway stations, with relatively spacious floor plans. Of those, 5,000 will be supplied next year.
As a result, public rental housing for young adults will expand to 106,000 units next year, up 35,000 from this year. The related budget will nearly double, rising to 18.1 trillion won ($12.7 billion) next year from 9.4 trillion won this year. Total public housing supply will also grow to 218,000 units next year from 194,000 this year. Of that, purchased rental housing is expected to account for 75,000 units next year.
Broader support for young adults' housing will also expand. Young people paying monthly rent will be eligible for rent subsidies with monthly income of up to 2.73 million won starting next year. For those who prefer a hybrid arrangement combining a deposit with monthly rent, the government will create a new loan product covering both the deposit and the monthly payments.
For young adults living under jeonse, a lump-sum deposit lease, the government will expand subsidies for the fees on deposit-return guarantees. The annual income ceiling will rise to 200% of the median income, or about 66 million won, from the current 50 million won. The deposit ceiling for eligible homes will also rise to 700 million won in the capital region and 500 million won elsewhere.
For young adults seeking to buy a first home, the government will introduce a new mortgage product that cuts interest rates by up to 2.1 percentage points on purchases of non-apartment homes priced at 400 million won or less, while preserving first-time buyer benefits.
The sweeping expansion reflects the government's assessment that high housing costs are blocking young people from building assets and from life plans such as marriage and having children. "The 1,000-won home could be a good policy if it actually translates into supply, but what matters is how realistically the announced plans are carried out," said Kwon Dae-joong, a professor of economics and real estate at Hansung University. "Stabilizing housing for young adults requires expanding rental supply while also easing burdens through housing vouchers that cover maintenance fees and other costs, along with efforts to stabilize the property market."
