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Gov’t vows welfare on housing

Beneficiaries are the young, the old and newlywed couples
Nov 28,2017
The government and the ruling Democratic Party reached agreement to offer one million apartments to the socially vulnerable by the end of this administration in 2022 as well as other housing-related financial aid.

“[The party and the government] agreed to aggressively push the supplies of government apartments while also offering a wide variety of housing welfare programs,” said Kim Tae-nyun, policy head of the Democratic Party.

Kim stressed that the housing issue is intertwined with other problems in Korean society such as the low birth rate and a rapidly aging population.

“The new housing welfare road map will contribute to [socially vulnerable people] getting jobs and will lead to more marriages and births and act as a bridge for those in lower income families to move up to middle income,” Kim said.

People eligible for the government’s low-cost apartments will include young people under the age of 39, young married couples, senior citizens and low-income families.

The government will offer 650,000 units at low rents, 200,000 units that will be leased by private construction companies supported by the government and 150,000 government-built apartments for sale.

“The goal is to expand the government-leased apartments for low-and middle-income people who don’t own an apartment,” said Kim Hyun-mee, the Land Minister.

Some 130,000 apartments will be offered to people under the age of 39 while 120,000 units will be offered as “share houses.”

These are apartments in which three young people live together as roommates. The remaining 50,000 units will be offered as dormitories for college students.

The government and ruling party also agreed to more financial aid for jeonse, long-term deposits, and monthly rent-related loans while encouraging young people to save through a bank account that will offer higher interest rates.

For young married couples, the government will be supplying 70,000 units. Their cost will be 80 percent of the market value. In the greater Seoul area they will be offered at 70 percent of the market value.

To be eligible, a couple has to be married for no more than 7 years regardless of whether they have children or not. Couples who are engaged are also included. Previously the rules were much stricter: the couple had to be married for no more than five years and had to have children.

For older Koreans, the government will run a program in which the state-run construction firm LH will buy houses owned by old people and rent them out to young people after remodeling. The government will pay for the apartments in installment, like a pension payment to help senior citizens. Senior citizens who sell a house to the government will be given a government apartment on a lease.

Apartment prices in Seoul are growing even after the administration tried cooling the market down. Measures announced on Aug. 2 limits mortgages in areas labeled “overheated.” Additional tightening of mortgage requirements were announced on Oct. 24.

According to the Korea Appraisal Board, Seoul apartment values rose 0.18 percent last week, which was double the 0.09 percent increase seen a week earlier and the sharpest growth since the government announced its real estate measures in August.

Apartments in the Jugong 5 Danji complex in Jamsil, southern Seoul, which recently got redevelopment approval from the Seoul city government, saw their values rise 100 million won ($91,940) since August.

In early August, an 82.5-square-meter (888-square-foot) apartment in the complex was valued at 1.68 billion won. Last week it was valued at 1.79 billion won. An 84.4 square-meter Eunma apartment in Daechi-dong, southern Seoul, has risen from 1.46 billion won to 1.56 billion won during the same period.

While the government plans to release the detail on the housing welfare road map agreed on Monday on Wednesday, Minister Kim said that the government will be announcing additional measures that will encourage home owners renting out apartments to register leases to further strengthen the transparency of the lease market as well as protecting renters.

BY LEE HO-JEONG [lee.hojeong@joongang.co.kr]