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| Small new public housing units on the left in Jongno district represent Seoul's efforts to provide affordable houses to middle and low-income residents./Korea Times file |
By Kim Se-jeong
Last month, the Seoul Metropolitan Government pledged to provide an additional 240,000 public housing units in the city by 2022, in an effort to make housing more affordable for citizens.
"No other time has been more important for people needing affordable housing," said a city government official handling housing policies. "We hope the city's efforts will contribute to stabilizing housing prices in Seoul."
The announcement came as expensive housing prices hit many, especially the young population that has been giving up on marrying and starting families.
According to the plan, almost 120,000 units out of 240,000 will be under the city government's direct supervision.
Almost 22,000 units will be built by the city government in four locations in the city: Hangdong and Cheonwang-dong in Guro-gu, Geoyeo-dong in Songpa-gu and Shinnae-dong in Jungnang-gu. The city used to build public housing extensively but no more due to land and budget constraints.
For 46,000 units, the city will purchase them from private companies and rent them out cheap. The city said it will take into account location when selecting the units and they will be rented out primarily to young jobseekers and newlyweds.
The other 50,000 units will be provided as a form of financial assistance.
The city will lend up to 60 million won with no interest for up to 10 years. The main recipients will be, again, young couples with difficulties securing affordable housing _ Korea has a unique system called jeonse, under which tenants pay a large deposit up front when they move in and don't pay monthly rent during their two-year contract.
With the upcoming 240,000 units, public housing in Seoul will reach 400,000 units, accounting for nine percent of Seoul's total housing. Although it's still far from enough, it will be the largest supply of public housing in decades.
Currently, the number of public housing units available in Seoul is a little over 271,000. The city government first offered its own public housing in 1989. Separately, the national government also began building public housing in Seoul in 1962.
Most old public housing no longer exist because tenants ended up purchasing them. The public housing providers wanted to sell them off to tenants after the rental period ended. Critics argued this tarnished the spirit of public housing and the city said it would stop selling off public housing units.
The remaining 120,000 units will be secured through stronger partnerships with the private sector. The city government will offer various incentives to private builders and in return get them to rent some of the units at affordable prices.
The city said it will invest 5.3 trillion won for the public housing project over the next five years and create a fund to attract private financial resources. The citizen fund will be managed by the Seoul Housing & Communities Corporation (SH).
Seoul's population is almost 10 million. Among them, only about 40 percent own their homes. The rest, especially young college graduates and newlyweds, suffer under high housing prices.
The plan has a particular aim at easing the housing spending burden of the young and newlyweds. Among the 240,000 units, 85,000 will be particularly allocated for them.
"We hope this will particularly make life better for the young generation," Mayor Park Won-soon said.
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