Public Housing to Be Supplied on Vacant Commercial and Office Plots... MOLIT Announces Proposed Amendment

[Financial News] The Ministry of Land, Infrastructure and Transport (MOLIT) will add an exception allowing land-lease, equity-accumulation and profit-sharing public presale housing to be built on non-residential plots in public housing districts that were completed less than five years earlier. Under current rules, the district-unit plan drawn up at the time of completion must remain in place for five years from that date. The ministry aims to speed up housing supply by making an exception to this rule.
According to MOLIT on the 8th, a proposed revision to the Guidelines for Handling Public Housing Affairs, which contains these measures, was announced for public comment on the 1st. The comment period runs through the 20th.
The key change in the proposed revision is that it broadens the exceptions allowing plans to be changed. At present, plans can be changed only to build public rental housing or public-interest buildings such as schools on non-residential plots. The revision adds cases where land-lease, equity-accumulation and profit-sharing public presale housing is supplied. The aim is to ease the burden on homebuyers with genuine housing needs by providing relatively affordable homes that also serve a public purpose.
Under the Special Act on Public Housing, a public housing district is an area where public housing makes up at least 50% of all housing. Districts include various types of land, such as residential, commercial and mixed-use residential-commercial plots, and for the first five years after completion, sites must be used for the purposes set out in the original plan.
This revision is part of the August 13 measures and originated with a proposal from the Seoul Metropolitan Government. In July, the city proposed easing regulations at a public housing inspection task force (TF), prompting work on the guideline revision. A MOLIT official explained the reason for the change: “There are limits to supplying housing that reflects local demand, so we intend to temporarily allow local governments, which have the authority to decide on changes to district-unit plans, to supply housing on non-residential plots as well.” The measure will be in effect temporarily through December 31, 2029.
Private-sector presales appear to have been excluded to avoid controversy over preferential treatment, as the benefits of rezoning could accrue to specific individuals. If private-sector homes were sold on public land after rezoning, individuals could profit from market-price gains.
However, there are also concerns that this could reduce cities’ self-sufficiency. Among non-residential plots, self-sufficiency sites are set aside to strengthen a city’s independence by attracting businesses and jobs. They can be used for various purposes, including research, culture and industry, and help prevent an area from becoming a bedroom community whose residents commute to other cities. If housing is built on these sites, there will be less room for jobs, potentially accelerating the area’s transformation into a bedroom community. There are also concerns that an increase in housing could make it difficult to expand infrastructure such as schools.
It is also unclear whether this will actually speed up housing supply. Local governments have the authority to change district-unit plans, so supply will not follow unless they move to amend those plans. MOLIT expects changes to be made in response to housing demand in each local government’s area, but it is unclear whether they will align with the government’s housing supply policy.

[email protected] Jeong Gyeong-su Reporter