The South Korean government will supply 20,000 so-called "1,000-won homes" outside the greater Seoul area starting next year, offering young adults housing for 1,000 won a day. The ultra-low-cost public rental program is designed to ease high housing costs in the provinces while encouraging young people to settle outside the capital region.
The Ministry of Planning and Budget has earmarked 1.4 trillion won for the program in next year's budget and plans to supply 10,000 units first, according to relevant ministries and political sources on the 2nd. Another 10,000 units would follow the year after, bringing the total to 20,000.
1,000 Won a Day, About 30,000 Won a Month
Under the program, the Korea Land & Housing Corporation (LH) will buy homes across non-capital regions that young adults can actually live in, then rent them out cheaply. At 1,000 won a day, tenants can cover their housing costs with about 30,000 won a month.
"This is a model the government has newly designed rather than an existing program," a government official said. "LH buys homes outside the capital region that young people would want to live in and provides them." The government settled on 20,000 units as the maximum feasible supply after consultations with LH.
'1,000-Won Homes' Already Popular in the Provinces
Ultra-low-cost public rentals like these are already running in some local governments and drawing strong interest. Incheon and other cities have offered "1,000-won homes," while Hwasun in South Jeolla Province and Taebaek in Gangwon Province have run programs under names such as "10,000-won homes" and "10,000-won apartments," providing housing to young adults and newlyweds at low rents.
In Pohang, North Gyeongsang Province, 1,055 people applied for 100 units of 1,000-won housing this year, a ratio of 10.6 to 1. Pohang's version uses homes purchased by LH for its rental program and offers them to young adults and newlyweds for 1,000 won a day. Tenants can stay for an initial two years, extendable to as long as four years depending on eligibility.
The government plans to expand nationwide the strengths of these ultra-low-cost housing programs run by local governments.
The core aim is to give young adults outside the capital region housing with sharply lower costs, creating a base for them to find jobs and build their lives locally.
Public Rentals for Young Adults to Expand in the Capital Region
Rental housing supply for young adults will also rise sharply in the greater Seoul area.
The government plans to invest 3.8 trillion won from next year to supply 20,000 units of general-purpose public rental housing in locations young people prefer, such as areas near subway stations, with relatively larger floor space. Of that total, 5,000 units will be supplied first next year.
As a result, public rental housing supply for young adults will expand to 106,000 units next year, up 35,000 from this year. The related budget will nearly double to 18.1 trillion won next year from 9.4 trillion won this year.
Total public housing supply will also rise to 218,000 units next year from 194,000 units this year. Of that, purchased rental housing is expected to account for 75,000 units next year.
Support Widens From Monthly Rent to Jeonse and First Homes
Support programs to ease housing costs for young adults will expand across the board. Starting next year, young adults living in monthly-rent housing will be eligible for rent support if their monthly income is up to 2.73 million won.
For those who want a hybrid lease combining a deposit with monthly rent, the government will introduce a new loan product called the "youth combined jeonse-monthly rent guarantee." The aim is to extend loan support to housing arrangements that mix jeonse, a lump-sum deposit lease, with monthly rent.
Support for young adults on jeonse leases will also grow. The government will raise the income threshold for subsidies covering jeonse deposit-return guarantee fees to 200% of the median income, or about 66 million won a year, from the current 50 million won.
Deposit ceilings for eligible homes will also rise. Homes with deposits of up to 700 million won in the capital region and up to 500 million won elsewhere will be covered.
New financial support is being created for young adults looking to buy a first home. The government plans to introduce the "Youth Future Bogeumjari Loan," which will cut interest rates by as much as 2.1 percentage points for purchases of non-apartment homes priced at up to 400 million won while preserving first-time buyer benefits.
Lowering Housing Costs to Keep Young Adults in the Regions
The government is sharply expanding youth housing policy on the judgment that high housing costs weigh not only on young people's ability to build assets but also on life plans such as marriage and childbirth.
Experts say what matters is whether the 1,000-won homes are actually delivered and whether the program can be sustained. "If the 1,000-won homes lead to actual supply, it could be a good policy, but what matters is how realistically the announced plan is carried out," said Kwon Dae-jung, a professor of economics and real estate at Hansung University. "To stabilize housing for young adults, the government needs to increase rental housing supply while also working to stabilize the property market."
