With Loans Restricted, Public Rental Housing Draws 36,000 Applicants

As concerns mount over the government’s real estate regulations, a supply crunch, and a worsening rental market, competition for public rental housing is intensifying. Although public rental housing is designed to provide housing stability for those without homes, fierce competition has become inevitable even within this system.
According to the website of Seoul Housing & Urban Development Corporation (SH Corporation) on the 24th, the average competition rate for the 'Public and Residential Environment Rental Housing' announced on September 26 was 31.3 to 1. Across 13 districts in Seoul, 33 complexes offered a total of 1,157 units, attracting 36,179 applicants.
The highest competition rate reached 2,269 to 1. At Dangsan SH Ville in Yeongdeungpo-gu, 2,269 people vied for a single 59m2 unit. Competition was also intense for the 84m2 units in the same complex, with 11,947 applicants for seven units, resulting in a rate of 1,706.7 to 1. Other popular complexes in the Gangnam area included Suseo 1st Complex SH Ville (39m2) at 345.9 to 1 and Geoyeo Apartment Complex 3 (59m2) in Songpa at 230.8 to 1, reflecting high demand for properties close to workplaces.
Public and Residential Environment Rental Housing is a system that offers stable housing for citizens without homes, allowing only rental occupancy without the option to purchase. Deposits and other costs are significantly lower than market rates. The competition for these units has been steadily increasing: in July 2020, the rate was 12.9 to 1, and by August 2023, it had risen to 28.1 to 1.
Looking at the cutoff scores for winners and reserve applicants in the 2023 announcement, the requirements are as high as those for Public Housing Sale. For example, at Suseo 1st Complex SH Ville (33m2), the cutoff for first-priority applicants required at least two years of subscription, 24 or more monthly payments, a minimum of five years without home ownership, and 243 total payments. At Dangsan SH Ville (59m2), the requirements were first-priority status, more than five years without home ownership, at least 60 payments, and a total subscription amount of 33.1 million won. This far exceeds the cutoff for the Goyang Changneung S5 Block (84m2) Public Housing Sale in March (29.9 million won) and the Capital Defense Command (59m2) in Dongjak-gu, Seoul, in November last year (27.7 million won). This suggests that middle-aged applicants have an advantage over younger people, as it takes 25 to 26 years to accumulate 30 million won in payments. Park Ji-min, head of the WolYong Subscription Research Institute, explained, “Applicants with high scores and strong credentials will opt for Public Housing Sale if they have sufficient funds, but those with less capital turn to public rental housing.”
With the supply of new housing in Seoul expected to drop sharply next year and real estate regulations tightening, competition for public rental housing is forecast to remain high. Park added, “Jeonse loans for single-home owners have been reduced, and as monthly rent becomes more common, prices are rising. Since homebuyers must actually reside in the property to obtain a mortgage, rental listings are drying up. As SH or LH (Korea Land and Housing Corporation) offer rental units at prices far below market value, demand is inevitably concentrated in areas near subway stations.”
ming@fnnews.com Jeon Min-kyung Reporter