Seoul to recycle 9,300 long-term jeonse units by 2031, rules out lease extensions

City reaffirms no renewals or conversions to ownership sales

Oh Se-hoon: vacated units must become opportunities for next residents

Expiring units to go to youth, newlyweds

73.9% of surveyed residents back 20-year eviction rule

Seoul City Hall. [Provided by Seoul Metropolitan Government]

The Seoul Metropolitan Government plans to reclaim and redistribute a total of 9,300 long-term jeonse units by 2031, starting with 310 units whose 20-year leases expire next year. The city reaffirmed its position that contract renewals and conversions to ownership sales will not be permitted, pushing back against demands from some current residents that have sparked recent controversy.

"Long-term jeonse housing is a stepping stone — it eases housing worries, allows residents to build savings and move toward homeownership," Seoul Mayor Oh Se-hoon said Tuesday. "I will make sure that once a unit is vacated, it feeds into a virtuous cycle where the next homeless resident gets their chance, and that long-term jeonse housing becomes a genuine ladder of hope for Seoul citizens."

Long-term jeonse units account for about 12 percent of the public rental housing stock held by the Seoul Housing & Communities Corporation (SH), with roughly 38,296 units supplied to date. The average length of stay among current residents is about 10 years.

The city also addressed recent demands from residents of long-term jeonse complexes in Songpa-gu and Gangdong-gu who had called for guaranteed lease renewals, saying the expiring units would be redistributed as "Mirinaezip" housing for youth and newlyweds, as well as new long-term jeonse units.

"A maximum 20-year tenancy with no conversion to ownership has been a basic condition stated in the program's original announcement since 2007," the city said. It added that households whose leases expire would be connected to other public rental housing options suited to their circumstances, and that relocation counseling and financial support information would be provided through district-level residential welfare centers.

A public awareness survey on long-term jeonse housing, conducted from Aug. 10 to Aug. 19 among 1,000 Seoul residents, confirmed broad support for the program's role as a housing ladder and for the 20-year rotation principle, the city said. In the survey, 73.9 percent of respondents supported requiring residents to vacate after 20 years. The top reasons cited were that the terms of the contract should be honored (37.2 percent) and that the purpose of public rental housing is to support self-sufficiency, not permanent residence (37.1 percent).

Seoul Mayor Oh Se-hoon delivers opening remarks at a public forum on real estate normalization held at Seoul City Hall in Jung-gu on Aug. 6. [Herald Business DB]

The city held a forum Tuesday at Seoul City Hall titled "From Long-Term Jeonse to Homeownership: Seoul's Housing Ladder Hope Talk," bringing together past and current residents to share their experiences moving in and out of the program.

Officials said long-term jeonse housing has served as a practical housing ladder for residents without homes of their own by offering rents well below market rates. "As of September this year, households that have moved out had an average stay of seven years and six months," the city said. "A significant number reduced their housing costs during that stable period, built up savings and prepared apartment subscription applications, then moved on to the next stage — buying a home or entering the private jeonse market."

As of this month, 15,529 households had vacated before their lease terms expired, accounting for 34 percent of cumulative supply as tallied by SH. Of those, 82.4 percent left voluntarily to buy a home or move into private jeonse housing.

A city official said the total savings on deposits — calculated by adding up the difference between long-term jeonse deposits and average jeonse market prices at nearby complexes — is estimated at about 10 trillion won ($7.38 billion). "That gap translates into reduced loan burdens or extra capacity for savings and apartment subscriptions," the official said.

A 2022 SH panel survey found that 69.9 percent of long-term jeonse households were saving an average of 625,000 won per month, and that 83.7 percent held a housing subscription account.

One attendee at Tuesday's forum, a resident surnamed Kim from a long-term jeonse complex in Guro-gu, said she had raised two daughters in stable housing for 16 years after moving in, steadily building her savings until she won an apartment subscription in a third-generation new town development. "Because I could live stably on an affordable deposit, I was able to save little by little and lay the groundwork for buying my own home," Kim said.

hope@heraldcorp.com