Korea Land & Housing Corporation (LH) will supply 20,000 purchased rental homes in central Seoul over the next three years, with about 15,000 of them offered as rental housing for young adults. The state-run developer plans to expand its purchase of newly built homes by easing the financial burden on private builders through measures such as early support for land acquisition funds and installment payments for purchase prices.
LH announced the supply plan on the 8th at an on-site meeting held at a newly built rental complex for young adults in Seoul's Jongno district to discuss housing problems facing young people. About 20 people attended, including Vice Minister of Land, Infrastructure and Transport Kim Yi-tak; Democratic Party lawmakers Kim Nam-keun, Oh Ki-hyoung, Lee Yong-sun and Kim Dong-ah; LH President Lee Sung-hoon; Seoul city council members; and young residents. The meeting was the first on-site visit by the Democratic Party's Seoul chapter special committee on housing supply policy.
The total volume LH presented for purchased rental supply in Seoul over the next three years is 20,528 units, comprising 14,558 rental homes for young adults and 3,398 purchased rental homes for newlyweds. "Newly built purchased rental housing can move from site identification to move-in within one to two years, making it the fastest tool available to stabilize the jeonse and monthly rent market," LH President Lee Sung-hoon said. "We will work to supply better homes faster and in greater numbers in locations young people want."
Under the purchased rental program, LH buys homes in downtown areas and near subway stations and offers them as public rental housing at below-market rates. For first-priority young applicants, rent is set at about 40% of market levels and tenants can stay for up to 10 years. Those who marry can remain for up to 20 years, with rent increases capped at 5%.
Demand among young people in Seoul has been strong. Last year, the average application ratio for purchased rental homes for young adults in Seoul was 130 to one, far above the national average of 50 to one. A university student who attended the meeting said finding a studio apartment with adequate living conditions is difficult, not just a matter of cost. "I hope more homes are supplied that young people can actually afford and live in," the student said. LH is revising program rules to speed up supply, including early support for land acquisition funds and payment of purchase prices in stages.
Participants at the meeting also called for increasing the range of homes that different groups of young people can actually move into, not just the overall volume. Young attendees said supply focused mainly on vulnerable groups cannot meet the housing needs of young people more broadly, and that supply should be accessible to a wider range of young adults, including those early in their careers.
Democratic Party council member Lee Yong-sun said public rental volume needs to be secured on a stable basis for use by young people and newlyweds, adding that the public sector and LH have a major role to play in resolving supply problems in the short term. Democratic Party council member Kim Dong-ah argued that if private supply centered on redevelopment and rebuilding of aging complexes expands, non-apartment housing where young people can live in existing downtown areas could shrink, and that the public sector should take a more active role in supplying housing for young people.
Participants also discussed expanding the supply of homes for sale, the next step on the housing ladder, on the grounds that rental supply alone has limits in helping young people secure housing over the long term. After touring the site, Vice Minister Kim Yi-tak said homes that can serve as a housing ladder for young people should be supplied consistently, and went on to mention the need to expand new homes for sale to young buyers.
