Non-residential properties such as vacant retail spaces and offices in city centers will be converted into public rental dwellings. To supply dwellings quickly in the greater Seoul area, including Seoul and Gyeonggi, non-residential properties will be provided as quasi-residential units such as officetels and dormitories. Supply will begin with 2,000 households, including mid-size units for not only single-person households but also newlyweds and households with newborns.
The Ministry of Land, Infrastructure and Transport and Korea Land & Housing Corporation (LH) said on the 2nd that they are launching the "non-residential remodeling purchase-and-lease dwellings" project, which will change the use of non-residential properties such as retail, office, and lodging facilities in city centers to quasi-residential and supply them.
The Ministry of Land, Infrastructure and Transport (MOLIT) will push this project forward in parallel through direct purchases by LH and purchase agreements. Under the direct purchase method, LH first buys non-residential properties in prime locations in city centers, then changes their use to residential and remodels them before supplying them as public purchase-and-lease dwellings. During LH's advance purchase process, buildings in superior locations can be secured first. Under the purchase agreement method, the private sector and LH sign an agreement, the private sector remodels the building directly, and LH then purchases it.
The Ministry of Land, Infrastructure and Transport (MOLIT)'s purchase target for non-residential remodeling this year is 2,000 households. Eligible buildings are those in prime locations within regulated areas in Seoul and Gyeonggi, where demand for dwellings is concentrated (speculative overheating districts and areas subject to adjustment), such as neighborhood living facilities, office facilities, and lodging facilities, that can be converted to residential use along with a change of use.
The Ministry of Land, Infrastructure and Transport (MOLIT) and LH will prioritize prime locations such as station areas with convenient access to public transportation. Purchasing by building wing is the principle. However, if conversion to residential use after a change of use is smooth, floor-by-floor purchases will also be pursued.
To ensure fair and transparent purchasing, quantitative factors will be introduced into the purchase review criteria to enhance objectivity. The purchase price of non-residential buildings will not be allowed to exceed the appraised value based on neighboring market prices before the change of use, thereby also ensuring price appropriateness.
This project, which was implemented once in 2020–2021, previously focused on single-person households, but this time it will allow the supply of mid-size units for newlyweds and households with newborns.
The Ministry of Land, Infrastructure and Transport (MOLIT) will also improve related systems to expedite the project. It will push to revise the Enforcement Decree of the Special Act on Public Housing so that LH can purchase Knowledge Industry Complexes and convert them to residential use. Currently, LH can only purchase buildings in Knowledge Industry Complexes if their use is office facilities, but through the revision, it plans to allow purchases even when the use is factories. It will also actively pursue necessary system improvements during remodeling and consultations with local governments.
Document submissions for this first round of non-residential purchases will be accepted from the 27th of this month to May 29.
Lee Ki-bong, director-general for housing welfare policy at the Ministry of Land, Infrastructure and Transport (MOLIT), said, "Overseas, including New York in the United States, cases of converting non-residential properties such as offices to residential use have been actively pursued since the 1990s, and recently the scope has been further expanding," adding, "By swiftly supplying idle non-residential properties in city centers as rental dwellings, we will help stabilize housing for young people and newlyweds."