Seoul Mayor Oh Se-hoon recently announced again that he would not accept requests from some long-term leased housing residents for extension of maturity.
Mayor Oh said this at the 'From long-term lease to my home, Seoul's housing ladder hope talk' held in the conference room of Seoul City Hall, about a year before the first 20-year maturity of long-term lease housing expired on the 8th.
Attending the event were 13 residents and move-outs who had succeeded or were preparing to buy a home from a long-term lease, as well as housing and real estate experts.
Mayor Oh said, “It is a noisy situation because there are people who want to live longer (even after the expiration of their residency period),” and criticized, “This is unconscionable and unreasonable.”
At the same time, he emphasized, “Seoul City will not make any exceptions (for evictions after expiration),” adding, “This is because there are many people waiting to move into long-term leased housing, and they are also Seoul citizens.”
Mayor Oh also added, “There are many people who have voluntarily purchased their own homes and successfully moved into the country without even completing 20 years.”
In the 'Citizen Perception Survey on Long-Term Rental Housing' conducted by Seoul Metropolitan Government on Korea Research and conducted on 1,000 Seoul citizens from the 10th to the 19th of last month, it was found that 73.9% were in favor of eviction of residents with 20-year lease terms.
Kim Jun-hyung, a professor of real estate at Myongji University who attended the event, said, "The problem with the 20-year maturity is a problem that needs to be solved by building more long-term rental housing. Extending the maturity would be a burdensome choice for the city of Seoul, considering the enormous risk of waiting (for occupancy)."
The Seoul Metropolitan Government emphasized on this day that long-term leased housing is functioning as a ‘housing ladder’ for citizens who do not own a home to purchase their own home.
The city introduced mid- to large-sized long-term rental housing for the first time in the country in 2007, and has supplied a total of 38,296 units to date, supporting housing stability for a cumulative 45,715 households.
As of this year, the average deposit for a long-term lease house is 293 million won, which is about 41% of the average lease price of an apartment in Seoul, 711.78 million won (based on KB Real Estate, August).
The Seoul Metropolitan Government analyzed that the lower housing cost burden led to savings and subscription preparation among moving-in households.
In fact, in a 2022 panel survey of public rental housing residents in SH Seoul, 69.9% of households living in long-term rental housing were saving an average of 625,000 won per month, and the subscription account holding rate reached 83.7%.
The average residence period of 1,708 households who moved out of long-term rental housing between 2016 and 2021 was 8 years and 4 months, and 72% of them lived in their own homes after eviction.
This is 12 percentage points higher than the proportion of all public rental housing evictees living alone (60%).
After the introduction of the system, the number of households that moved out before the expiration of the contract period (as of this month) was 15,529, reaching 34% of the cumulative supply based on SH statistics.
Of these, 82.4% were cases of voluntary eviction at the request of the contractor for self-purchase or private transfer.
At this event, the actual experiences of citizens who have reduced housing costs through long-term rental housing and succeeded in purchasing their own homes through savings and subscription or who are preparing to upgrade their housing were introduced.
Mr. Kim, a resident of a long-term rental house in Guro-gu, said, “I was able to live stably with a low deposit, so I was able to save a little bit and lay the foundation for buying my own home.”
According to the city, the eviction of households that initially moved in after reaching the expiration of 20 years will begin next year.
Accordingly, starting with 310 units next year, approximately 9,300 units expiring by 2031 will be returned and resupplied as 'Mirinae House' and long-term rental housing for young people and newlyweds.
Housing with a 20-year expiration date will be resupplied without contract extension or sale conversion, but prior consultation and on-site briefing sessions will be provided to ensure stable relocation of expiring households.
The city of Seoul plans to supply an additional 17,500 Mirinae homes by 2030 and begin construction of 310,000 homes by 2031 through Rapid Integrated Planning 2.0 and Moa Town.
The plan is to expand opportunities for citizens to purchase their own homes by supplying sufficient new housing in the future.
Mayor Oh said, “Long-term rental housing is a stepping stone to relieve housing worries and accumulate assets to purchase your own home,” adding, “We will continue a virtuous cycle in which the vacated homes lead to opportunities for the next generation of non-homeowners.”
He then emphasized, “We will take careful care to ensure that long-term rental housing becomes a housing ladder of hope for Seoul citizens.”
