Amid soaring jeonse prices, the Seoul Metropolitan Government has decided to supply about 13,000 rental homes for low-income households in the first half of the year.
The city said Thursday that more than 80 percent of the total 15,665 public houses will be provided within the timeframe.
They include 4,995 permanent rental houses for low-income households, 2,822 for families with multiple children and seniors citizens, 2,555 for those living in the developing areas and 515 for newly-wed couples.
The city also plans to support an additional 8,210 households for their monthly rent, almost triple the 2,560 families last year. The benefits will be extended to people living in basement studios and those who need urgent support.
Korea has a unique home rental system called “jeonse,” under which tenants can make a lump-sum deposit for a residence instead of paying monthly rent.
Due to the low interest rates in banks, the system has benefited tenants and, especially, landlords who can use the money for alternative investments.
Amid the shortage of houses, coupled with the stagnation in the property market recently, however, many landlords are raising the amount of deposit or turning to monthly rent.
According to a report compiled by Kookmin Bank, the average lump sum that tenants paid jumped 7.1 percent last year, the highest annual increase in eight years.
With whole areas in Seoul hit hard by the skyrocketing jeonse prices, those in low-income brackets are most vulnerable.
“We hope the new measures to be helpful for relieving the financial burden of low-income households. We will continue to seek better housing welfare through follow-up measures,” said Kim Yoon-kyu, director of housing policy.
By Lee Ji-yoon (firstname.lastname@example.org)