Minister pushes for middle-class housing projects

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Minister pushes for middle-class housing projects


Land Minister Suh Seoung-hwan speaks at a meeting with construction companies on Friday. [NEWSIS]

As the first step of the government’s plan to let private construction companies build public housing projects for the middle class, Land Minister Suh Seoung-hwan said Friday the government will soon announce details about state-owned land the companies can either buy or lease.

The Ministry of Land, Infrastructure and Transport earlier announced its new public housing project dubbed “New Stay,” which is aimed at providing 10,000 apartment units built by private builders for middle-class households that are struggling to find affordable jeonse (two-year deposit) properties.

It is the first time private builders will be allowed to take part in a public housing program.

Suh met with CEOs from nine construction conglomerates - including Daelim and Lotte Engineering and Construction, as well as Choi Sam-kyu, chairman of the Construction Association of Korea; Park Chang-min, chairman of the Korea Housing Association; and Kim Mun-kyung, chairman of Korea Housing Builders Association - to discuss the program at the JW Marriott Hotel in Banpo-dong, southern Seoul.

“We will cooperate with the National Assembly to pass legislation to establish the New Stay policy,” Suh said during the meeting. “Before we lay down a special law, we will try to make more companies participate in the real estate investment trust [REIT] rent project and provide them with public land where they can start construction.

“The government will bring in a revised bill to allow companies joining the REIT rental business to use the land designated for it.”

The Land Ministry chief said the government will let those construction companies know the location of the property for the New Stay initiative as soon as possible.

Daelim, one of the nation’s largest builders, said it is considering joining the project. The company is building 1,960 apartment units for rent in cooperation with the Incheon Development and Tourism Corporation.

“We might expand our rent apartment building businesses,” said Kim Han-ki, president of Daelim. “We first will see where the land will be.”

Lotte E&C also said it is considering getting involved in the program.

“It seems like it is a good road map, but there are many things that the government should fix for both investors and potential tenants,” said Park. “One of the most significant problems is that the government should lower the land price if it really wants to supply those rental apartments and houses at low prices to the public. It also needs to lower taxes for companies willing to join the projects.”


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