Housing for Young Adults

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Information as of 21 Feb, 2017

Subway Station Area Housing Project for Young Adults

Subway Station Area Housing Project for Young Adults is a program to deregulate public restrictions within areas close to subway stations in order to revitalize housing development and to supply it to young adults aged 20-39. As the policy is implemented, the Seoul Metropolitan Government is strengthening legal and administrative support so that private businesses can construct rental housing in station influence areas equipped with infrastructure. Supported businesses will contribute to solving problems of housing for young adults by constructing rental housing in areas around subway stations and providing it for lower prices than market prices.

■ Overview

Outside of the downtown core and other specialty regions such as Gangnam, there are areas with significant opportunities and adequate infrastructure, forming ideal locations for housing for young adults.

■ Target

Station Influence Areas

• SIAs with 2 or more railways (urban railway, light rail transit) intersecting

• SIAs around bus-only lanes or roads which are 30 m or more wide

Target

• Areas within a 250 m radius from platforms of the station meeting the standards

■ Key Purpose

To gradually implement the policy beginning 2016 in order to provide a maximum of 200,000 public rental houses in station influence areas

• To reduce housing costs through increase in rental housing for young adults and to boost the image of rental housing

• To stabilize housing prices in station influence areas (and reduce the increase in monthly rents)

• To revitalize cultural spaces for young adults through high young adult populations (young start-up support centers, cafes, etc.)

■ Master Plan

To establish and implement related ordinances through consultations with City Council

Implementation Plan

Full-scale Implementation (to be provided from the 1st half of 2017)

• SMG: Deregulation of legal restrictions within SIAs, greater administrative and financial support for the project

• Private Businesses: Providing rental housing in the entire housing area

Operation Plan

To divide rental housing into public rental housing and semi-public rental housing

• To complement the current policy (housing supply for installment sales with continuing guarantees), the due time will be limited to 3 years and the range of the location within a 250 m radius from stations.

Category Supplier Supply Rate Residential Area Description
Public Rental Housing SMG 10-25% 45 ㎡ or less 60-80% of nearby market prices
Semi-public Rental Housing Private Businesses 75-90% 35 ㎡ or less • Mandatory lease term: 8 years
• Increase rate of rent: 5% or less per year

Pilot Plan

• Period: after July 2016

• Target Areas: Areas around Subway Chungjeongno and Bonghwasan Stations

• Master Plan

– To convert selected areas into semi-residential areas and to support the project

– For Chungjeongno Station, provision of 340 households is expected after being converted to a semi-residential area

Upgrade of Use of the Sites

To upgrade class 2 and 3 general residential areas around stations

Use Area Site Area Other Requirements
Commercial Area 1,000 ㎡ or more • 2 conditions out of areas around intersected stations, bus-only lanes, and roads 30 m or wider
• Areas adjacent to commercial areas
• Class 3 residential, semi-residential areas
Semi-residential Area 500 ㎡ or more • Areas around roads 30 m or wider
• Areas adjacent to semi-residential areas
• Class 2 and 3 residential areas

Deregulation of Legal Restriction

Deregulation of Urban Planning

Deregulation of the floor area by use system in commercial areas: To adopt a basic floor area rate in order to guarantee a minimum floor area rate if mandatory requirements are met (semi-residential areas 400%, commercial areas 680%)

Floor Area by Use System
A system to lower total floor area as housing rate increases

• Deregulation of non-housing rate: Not to apply non-housing rate in semi-residential areas

Deregulation of building coverage: to deregulate the upper limit of building coverage

Deregulation of deterioration criteria: to deregulate the number of structures of 20 years or more to 1/3 of total structures

Deregulation of Housing Construction Standards

Deregulation of parking lot construction standards: For studios (30 m2-50 m2, besides semi-housing including officetels), deregulation within half of construction standards (0.3 cars per household)

• However, only young people who don’t own a car can move into studio housing.

Administrative Support

Simplification of Procedures

To simplify administrative procedures (assessment, approval, etc.) according to projects

Project Description
Housing rental business promotion zones
(Site area of 5,000 ㎡ or more)
Integrated approval for designation as a promotion zone, approval of the plan, and approval of housing project
Outside promotion zones The SMG draws up and implements the project.
Urban redevelopment zones The areas covered by the housing project for young adults in station influence areas are regarded as potential zones for the urban redevelopment master plan.

Designation of Support Institution (SH Corporation)

• Overall support for Subway Station Area Housing Project for Young Adults in station influence areas

• Support in research, study, and planning of expansion of the housing project for young adults in station influence areas

• Impact monitoring of the project in the areas

• Studying and implementation of measures for solving regional problems according to the monitoring results

Financial Support

Support in Project Implementation

• Preservation of the difference of interests on loans for construction: 980 million won in 2016 budget
– Beneficiaries: Registered (or to be registered) business operators for semi-public rental housing, construction business operators for houses with floor areas of 85 m2 or less
– Loan limit: Loan equivalent of a building of 150 million won in the market price per household
– Loan use: Funds for construction and operation
– Second preservation interest rate: within 2.0%

• Tax reduction: based on reduction regulations, including the regional market price reduction ordinance
– Exemption of acquisition tax for floor area of 60 ㎡ or less, 25% reduction for floor area of 60 ㎡-85 ㎡ or less (20 households or more)
– 50% reduction of property tax for floor area of 60-85 ㎡, 75% for 60 ㎡ or less, exemption for 40 ㎡ or less

• To encourage smooth implementation through active involvement of SH Corporation
– To induce SH Corporation to establish a support center for the housing project for young adults in station influence areas: to support business for and with landlords who want to participate in the project

Support for Residents

• Provide long-term secure housing deposit: to reinforce the current policy
– Maximum 45 million won per household
– To reside for up to 6 years through deposit contract