Providers are selected by adding the appraisal values of the site and owner.
- Site appraisal value of 70+ points (out of 100): More favorable rating with better area market rates, site area, university accessibility, concentration of single-person households of senior citizens, conditions for construction implementation, amenities, and transportation accessibility.
- Landlord appraisal value of 20+ points (out of 30): More favorable rating with fewer homes owned, lower income, and higher age (landlords earning fewer than 20 points are also administered as prospective providers if project goals are not met).
Because the landlord-remodeled rental project encompasses demolishing standalone houses and building small-scale multi-family housing, smaller architectural and
construction companies can participate and thus spur job creation. Critics contend that the required rental periods of eight or more years result in low earnings and excessively long leases.
One advantage of the project is that it favors senior citizens (retirees), granting low-interest loans to those who lack the funds to renovate old housing but are concerned over post-retirement funds to sell it. The most appealing aspects include low-interest loans and the recruiting of tenants on the landlord’s behalf, mitigating fears of potential vacancies.
2. Local Government Policy toward Housing Support for the
Table 20. Details by Priority Category Category Details
1 Beneficiary or child of beneficiary & resident of region outside of Seoul who was once at child welfare facility (nationwide)
2 Child of parents near poverty line & resident of region outside of Seoul
3 Child of family earning half of average monthly income for urban working household (70% for studio apartments) & resident of region outside of Seoul
4 Child of benefit recipients & resident of region outside of Seoul (not eligible if one or more parents reside in public rental housing)
5 Child of parents near poverty line & resident of Greater Seoul area
6
Child of family earning half of average monthly income for urban working household (70% for studio apartments) & resident of Seoul area (not eligible if one or more parents reside in public rental housing); those recognized as eligible by Seoul mayor including children of parents with difficult financial circumstances due to health insurance premiums or other factors
A combined 1,308 units were supplied between 2010 and 2015, with another 450 units of multi-family and multiplex housing supplied in subsequent years (150 in 2016, 150 in 2017, and 150 in 2018) at a budget of KRW 72 billion.
Table 21. No. of Units Supplied, 2010~15
Total 2010 2011 2012 2013 2014 2015
No. of units supplied 1,308 218 146 166 347 131 30
Hope Housing represents a new policy direction from past approaches to rental housing in targeting students at Seoul-area universities for housing provision. Students from outside of the metropolitan area who move to the capital for college are often forced to live in poor accommodations if they cannot find dormitory housing on campus. With monthly rent exceeding KRW 400,000 on average for a studio apartment in university neighborhoods, college students are considered among the most acutely affected by the housing cost burden. Seoul City Hall taking the initiative in supplying rental housing to students is proof positive of the growing importance of the young generation in the eyes of local governments. Rents are set at the range of KRW 50,000~150,000 a month, which results in a relatively small housing burden for collegians occupying Hope Housing.
Source: Seoul City homepage(http://
www.seoul.go.kr)
Another difference between Hope Housing and previous projects for affordable rental housing is the provision of a small number of housing units in centrally located regions, minimizing friction with area residents. Rental housing in the past tended to come in the form of large-scale apartments, fueling fears of social isolation and slumification in the surrounding neighborhood; this also causes the negative image residents hold toward rental housing. Because Hope Housing is offered on a small scale, the surrounding community could find it easier to accept. This use of purchased rentals to supply rental housing in centrally located areas on a small scale apparently represents a suitable policy toward rental housing for a large city such as Seoul.
Studies show that 30 percent of Hope Housing units provided by the city for university students remain vacant. In case of joint living arrangements, occupants say the lifestyle patterns of residents are incompatible, with some perceiving them as affordable but reporting inconveniences with communal living. University students also tend to complain that multiplex and multi-family housing is less comfortable than a studio apartment. This could show the folly of a blind pursuit of a supplier-centered policy without adequate consideration for the demand side.
2.2 Cross-Generational Empathy under One Roof: Multi-generation Housing Program
The Cross-Generational Empathy under One Roof program targets senior citizens and university students with the aim of alleviating housing issues for both the older and young generations. Matching services set up the elderly with free residential spaces and university students who need housing; student occupants provide living services for the senior citizens, helping to raise convenience for the latter while reducing the housing cost burden for themselves.
The program’s main targets are university students (including graduate students and those on leave) and senior citizens age 60 or older with at least one available room.
Those eligible include university students (including graduate students and students on leave) who reside near a university neighborhood in Seoul, require housing, and can offer living services for a senior citizen over a designated period while enrolled or on leave from a Seoul-based university. Senior citizens who wish to take part in the program must be age 60 or older with at least one available room (must have a stable residential space [owned or leased through key money] with a separate room[s] that a university student can rent).
Participating senior citizens rent extra rooms to university students at half of market value or less, while university students provide services such as cleaning, shopping, and instruction on using smart devices.
A combined 183 households participated in this program as of 2016, with 228 units supplied and 45 households receiving environmental improvement support. Another 200 units will be supplied in 2017.
This program, however, appears to have achieved just a few of its goals. Specifically, it has attained results in easing problems in urban living through income support for senior citizens and a lower burden of housing cost for students. Indeed, the number of program matches has risen over time, and integration has resulted in more efficient support.
In the early model, 15 senior citizens and seven students applied for the project, but only one household received matching. Other problems included a lack of safeguards for students or conflict mediation efforts by the city government. Municipal authorities were criticized for problems in matching arising from differences between residential areas where senior citizens lived and the regions desired by university students, as well as lack of knowhow in managing conflicts among participants.
The project has also seen problematic intergovernmental communication, illustrating that communication channels are far from perfect for carrying out the program.
Staff rotations also appear to have prevented the accumulation of understanding by supervising officials, and no suitable authority seems to have been been assigned.
Supervising officials have further complained about the burden of responsibility, indicating a lack of suitable procedures for standard management for decision-making on a day-to-day basis. Finally, the attempt to achieve several goals through one complex policy effort seems to have resulted in unclear goals and a greater potential for policy failure. Given the above factors, the jury is out on if the Cross-Generational Empathy project has been effective and successful.
2.3 Sharing Dormitory
The Sharing Dormitory project involves purchasing or remodeling gosiwon (a tiny room nominally used to study but often serving as housing) and other dormitory accommodations to provide public rental housing for young single-person households.
The principal beneficiaries are young single-person households with consultation from the city government and the chief of the district office of a given area. Seventy units
2.4 Vacant House Rescue Project
The Vacant House Rescue Project remodels empty houses in the city center that have been abandoned due to repair delays or expired construction terms; the homes are then rented out at affordable rates to young people and other housing-vulnerable segments for up to six years. The principal targets are the housing-vulnerable population, especially single- and two-person households consisting of senior citizens, university students or other young people, and working adults who earn 70~100 percent of the average monthly income for an urban worker. Houses must be detached, multi-family, or multiplex residences with three or more rooms; allow sufficient livability after KRW 40 million in remodeling is done; and be located in regions accessible to public transportation. Rents are capped at 80 percent of market value with an occupancy period of at least six years (with limits of 50 percent of remodeling costs and KRW 20 million per block).
This project is highly popular, with the number of occupancies skyrocketing from 35 in 2015 to 200 in 2016; 600 units are planned through 2018. Residents have also called it a successful exit strategy for commercial zones where new town projects proved impractical, though opinions on profitability remain divided. While rent differs by housing characteristics, fears have grown over the application of the rent standard of 80 percent of market value.
2.5 Railway Station Zone 2030 Youth Housing
The Railway Station Zone 2030 Youth Housing program has the private and public sectors cooperating to provide housing for 20- to 30-somethings in railway station areas serving as transportation hubs. The objective is to ensure a steady influx of young people (in their 20s) to Seoul while helping them avoid housing poverty, as well as alleviate excessive housing costs and burden for newlyweds in their 30s.
This program’s principal targets are people in their 20s and 30s, namely university students, the newly employed, and newlyweds who do not own a car. Rent is 60~80 percent of market rates for public rentals and as high as 90 percent for private rentals (the latter is convertible to commercial sale after eight years of use as rental housing).
As of late 2016, 1,587 units were supplied in two locations (420 public, 1,167 private), with another 15,000 scheduled for supply in 2017 (25,852 total units).
Area residents have complained that youth housing interferes with their prospect rights and generates traffic congestion. Some warn of higher inflation of land prices at potential target sites. Additional issues stem from the lack of regulations on rising rent and fears that the units could evolve into expensive rental housing inaccessible for young low-income occupants.
2.6 Ddabok Houses
The Ddabok House project seeks to lower the housing cost burden for university students, the newly employed, newlyweds, and other young people by offering affordable homes in areas with convenient public transportation and accessibility to workplaces. The principal targets are the same as those for the Happiness House project. Categories include university students, the newly employed, newlyweds, senior citizens, and vulnerable population segments; each group is subject to varying income criteria.
Table 22. Principal Targets
Segment Eligibility
University students Enrolled or expected to re-enroll at nearby university; within two years of graduation or withdrawal from university or high school
Newly employed Employed for up to five years or retired for up to one year from nearby workplace, with eligibility for job-seeker benefits
Newlyweds Employed at nearby workplace or satisfying criteria for university student, married for up to five years or able to provide documentation of marriage prior to occupancy
Senior citizens Age 65 or older & living in corresponding region (city or county) Vulnerable segments Resident of corresponding region eligible for housing allowance
Table 23. Income Standards for Principal Target Groups
Segment Income Criteria
University students Student or parents’ combined income below 100% of average income*; student meets asset criteria for national public housing
Newly employed Beneficiary earns up to 80% of average income (100% for household), meets five-/ten-year asset criteria for national public housing
Newlyweds Household income of up to 100% of average income (120% for dual incomes), meet five-r/
ten-year asset criteria for national public housing
Senior citizens Household income of up to 100% of average, meet five-/ten-year asset criteria for national public housing
Vulnerable segments Meet asset criteria for national public housing
Newly employed Household income of up to 100% of average income (120% for dual incomes), meet five-/
ten-year asset criteria for national public housing
Source: Ddabok House hompage (http://ddabokhouse.co.kr)
Source: Ddabok House hompage (http://ddabokhouse.co.kr)
Asset standards for principal targets in 2017 included up to KRW 126 million in real estate and a motor vehicle valued at up to KRW 24.65 million for university students and housing allowance beneficiaries. For the newly employed, newlyweds, senior citizens, and industrial complex employees, the ceilings are KRW 215.5 million in real estate and a motor vehicle valued at up to KRW 27.67 million, with the deposit and rent set at 80 percent of market rates. Through 2020, 10,000 Ddabok Houses will be built at 30~40 locations within Gyeonggi Province, with 7,000 allocated to newlyweds and the remaining 3,000 to university students, the newly employed, senior citizens, and vulnerable population segments.
2.7 Interest Assistance for Standard Rental Deposit Loans
Among the 50-percent rental deposit and 50-percent rent conditions for Ddabok and Happiness Houses, the former figure represents the standard rental deposit.
Gyeonggi Province has instituted Korea’s first system to provide interest assistance for standard rental deposit loans to promote housing stability for the young generation.
Ddabok and Happiness House occupants receiving key money loans, as well as those who did not use a key money loan but received it after occupancy, may apply for a loan to cover the increase within three months of converting (contract renewal date) the monthly rent contract to a rental deposit.
Recipients must basically cover 40 percent of interest on the standard rental deposit; to promote childbirth, 60-percent support is available for one child born after occupancy and that figure jumps to 100 percent if a second child arrives.
The sum of KRW 17.71 million was provided to 171 Happiness House tenant families in Gyeonggi in the first round of interest support for standard rental deposits in 2016. A combined KRW 45.9 billion will be supplied through 2020, with rental deposit interest support to go to key money loan recipients who occupy public rental housing built within the province.
CHAPTER V.