The government has even brought out an additional deregulation card to expand the supply of non-apartment dwellings. As concerns grow over a shortage of jeonse rentals in the greater Seoul area and a lack of urban housing supply, it plans to supply a total of 110,000 units by 2030, led by urban-style studio dwellings and remodeling of offices and commercial buildings. The plan also aims to revive 100,000 units at business sites in the greater Seoul area that received permits but have not broken ground, to prevent a supply cliff.
The Ministry of Land, Infrastructure and Transport on the 26th announced a plan to expand the supply of non-apartment dwellings by 41,000 units in the greater Seoul area over the next two years and 110,000 units in total by 2030. This came five days after it said on the 22nd that it would effectively lift restrictions on the supply of purchase-type public rentals in regulated areas.
The Ministry of Land, Infrastructure and Transport (MOLIT) first decided to significantly ease regulations on urban-style studio dwellings, which can be supplied quickly by using idle land in city centers. The supply target is 26,000 units over two years and 77,000 units by 2030. Urban-style studio dwellings, which once neared 120,000 units a year, have shrunk to around 5,000 units annually recently due to concerns over project financing (PF) insolvency and a surge in construction costs.
To revive this, the government will expand the cap on the number of units in urban-style studio dwellings from fewer than 300 units currently to as many as fewer than 500–700 units. It will also raise the floor cap for row houses and multiplex dwellings from five stories to six, subject to review by an architecture committee. Sunlight-right regulations will be eased as well by standardizing the due-north setback distance to 5 meters for buildings 10–17 meters tall.
Parking regulations will also be eased. Depending on the local government ordinance, requirements can be reduced to as low as 70% of the legal standard, and the introduction of robotic parking or auto-valet systems will be allowed. If similar facilities exist within a 300-meter radius, requirements to install resident communal facilities such as senior centers and daycare centers will also be waived to improve project viability.
The government will also actively support projects to convert commercial buildings, offices, and Knowledge Industry Complex facilities to residential use to meet rising demand from single-person households. Through this, it plans to supply 15,000 units over two years and more than 33,000 units by 2030. The Korea Land & Housing Corporation (LH) will launch a project this year to remodel 2,000 commercial units for residential use.
Financial support for non-apartment projects will also be strengthened. By 2027, when building urban-style studio dwellings, the loan limit under the housing & urban fund will be raised to as much as 120 million won, and interest rates will be lowered to the 3% range. For commercial and office remodeling projects, separate fund loans and mortgage guarantees by the Korea Housing & Urban Guarantee Corporation (HUG) will be introduced.
PF guarantees dedicated to non-apartment projects in the greater Seoul area and presale guarantees will also be newly introduced. The plan is to reduce the initial land cost burden at the start of projects and cut guarantee fees by up to 45%.
The government will also operate an "on-site bottleneck relief support center" for 100,000 units at business sites in regulated areas of the greater Seoul area that have obtained permits but have not broken ground for more than a year. The volume of projects in the greater Seoul area currently experiencing construction delays amounts to about 323,000 units. Failures to secure PF financing, disputes over construction costs, and differing legal interpretations among institutions are cited as the main causes.
Song Seung-hyun, head of Urban and Economy, said, "I think the supply of non-apartment units that can proceed quickly and serve as a buffer for shortages of jeonse and monthly rentals is necessary," but added, "However, since there are limits to supply through public-led purchases, private demand must support it through measures that can remove market distrust for it to be effective."