Housing expenses are often voted as the most excruciating factor that Seoul citizens have to endure. It is also one of the factors that make young people think twice about getting married. After getting married, many newlywed couples struggle with meeting the monthly rent and interest rates for housing loans. This is the main social problem that led to the so-called “N-po Generation (a generation giving up a number of essential human activities).” While the average monthly salary has risen by 11% over the last seven years, the average housing cost has risen by 44% in the same period of time. The “escape Seoul phenomenon,” which is driving people out of the city due to housing and childrearing arrangements, is intensifying as well. Among the net population outflow from Seoul (households moving into the city < households moving out of the city), the majority were “people in their 30s with children.”
Determined to tackle the housing problem, which essentially concerns the “starting point for young newlywed couples,” the city of Seoul has rolled up its sleeves, and launched housing programs that will support 25,000 couples each year. This means one in two couples getting married in Seoul each year will be able to receive benefits from the city in the form of “financial aid” or a “place in a public rental house.” Any couple who does not own a house and earns a combined income of less than KRW 100 million will be eligible for participation in the programs. The financial aid will be also available to common law marriage’.
The key change involves expanded eligibility for the financial support. The housing loan program, which provides up to KRW 200 million for rental or leasing deposits at low interest rates, will be made available to couples whose combined income is less than KRW 100 million, from the current eligibility of KRW 80 million. A couple who earns less than approximately KRW 8 million a month together (KRW 4 million per person) will be eligible for the housing loan program, which includes the majority of workers. The number of recipients will be also increased from 5,000 units to 10,500 units, and the maximum support period will be extended from 8 years to 10 years as well.
The “housing supply” program, which provides access to purchased public rental houses and houses near subway stations for the youth, will also be increased by 2,445 to 14,500 units a year (12,000 units →14,500 units). In particular, with the aim of providing prime residence for young newlywed couples, Seoul plans to target houses near major subway stations and places with easy access to public transportation for the program.
In addition, in order to prevent cases in which the youth miss opportunities to receive support due to a lack of access to the various housing policies and programs, Seoul will also open an online portal, “Seoul Housing Portal,” at the end of November. The online portal will offer a one-stop service, including a self-check service through which married couples will be able to identify the best housing support program that suits their situation, online consultation services, and application. In addition, starting from next year, newlywed housing support coordinators will be positioned in each housing welfare center in the 25 self-governing districts.
Determined to tackle the housing problem for young married couples with vigor and determination, the city of Seoul has radically increased its investment budget by KRW 2.0849 trillion (monthly average of KRW 694.9 billion) from the original plan. Starting from next year, a total of KRW 3.106 trillion will be invested over the course of three years (from 2020 to 2022).
On the 28th, Mayor Park Won-soon of Seoul, announced “Seoul Metropolitan City’s Plan for Housing Support Programs for Newlywed Couples” with these contents.
The programs include 4 major changes, which include ① expansion of financial aid and relaxation of eligibility conditions (an annual average of 5,000 units → 10,500 units), ② increase in volume of public housing supplies (an annual average of 12,000 units →14,500 units), ③ support for moving into bigger houses with the birth of a child for couples living in a purchased public rental house, and ④ an increase in accessibility to information on the housing support programs.
Seoul announced that it established such programs to ensure that every member of the future generation has a fair starting point, following the increased youth allowance and monthly rent support program for the youth. The vision behind such support programs are that as newlywed couples stably settle down in the city, they will vitalize the local economy and, furthermore, create a virtuous cycle of future growth engines for Seoul.
The Mayor of Seoul, Park Won-soon, said, “These plans are support programs designed to ensure a fair starting point for all newlywed couples in line with the increased youth allowance and the monthly housing rent subsidies for the youth. We prepared these programs by listening closely to the voices of young people to offer practical benefits that they want to receive. We will make sure housing issues do not pose a handicap for newlywed couples who are starting a new chapter of their lives with a dream of brighter future. Through these plans, most workers will be included as potential beneficiaries for the programs. We will continue to develop additional plans.”