The Most Ambitious Housing Supply by the Moon Government: 325,000 Units in Seoul and 850,000 Nationwide

[경향신문]

An apartment complex in downtown Seoul seen from Namsan Mountain. Yonhap News

On February 3, the Democratic Party of Korea and the government reportedly drew up plans to supply a total of 850,000 homes nationwide including 325,000 units in Seoul. This is the most ambitious supply of housing by the Moon Jae-in government.

The ruling party and the government released a Plan to Expand the Supply of Housing in Major Cities and Provinces centered on these details on February 4. It was the real estate supply scheme that Byeon Chang-heum, minister of land, infrastructure and transport had declared he would present before the Lunar New Year when he entered office at the end of last year.

The latest housing measure will provide 850,000 units nationwide including metropolitan cities and provinces. Among these homes, 325,000 units will be supplied in Seoul. On February 3, a member of the ruling Democratic Party said, “It is a national plan on par with past New Town projects.”

The latest government plan will focus on supplying homes through public redevelopment and reconstruction projects. Reportedly, the government is planning benefits, such as raising the floor space index in areas where the designation as a redevelopment area has been cancelled and areas where a redevelopment union is in place, and shortening the project period. The government will recover the surplus profits from these measures through public rental housing and use it to support the people forced to relocate. Much of the site for public redevelopment and reconstruction overlaps with areas formerly designated as New Towns.

To accelerate redevelopment and reconstruction projects, the government will amend the law, which currently requires consent of three quarters or more of the residents, and ease the requirement to two thirds. In order to encourage development of areas near subway stations, the government will also try to expand the area designated as “subway station areas” from within a 350m radius to a 500m radius.

People from inside and outside the ruling party voiced concerns that the massive housing supply plan could end up filling the pockets of construction companies alone. A party official said, “We are planning improvements that will control prices and help ordinary citizens who do not own a home.” The latest measure also includes plans to make more people eligible for “my first house loan.” The government is expected to raise the current income standard for loans (couple’s combined income of 70 million won).