The Ministry of Land, Infrastructure and Transport has started building 5,529 New Stay residential houses to be leased to the middle-class level residents based on the recommendation by the civilian REITS in line with the government policy to reform the residential housing style. The new stay houses will be built in four regions around the country including Dowha-dong in Seoul and will be completed in 2017.
The government will introduce a corporate rental system for housing targeting the middle class as early as 2017. Private builders and investors will construct the houses which people will be able to lease for a monthly rent for as long as eight years. The government will also recognize accidents which occur during commute as an industrial accident and promote measures to allow workers such as housekeepers to subscribe to the four major insurance benefits. The government plans to discuss the measures for non-regular workers—which will extend the contract period for temporary workers over the age of 35 from the current two to four years and increase the number of jobs where workers over the age of 55 can be dispatched—at the Korea Tripartite Commission by this March and present a policy within the year. The government already has publicly announced the builders for 3,265 business-type rental houses and manage them on April 23 with 5,529 rental houses to be built by civilian REITS so that the government can supply 10,000 business-type rental houses for this year. The new stay rental houses will be built in such locations as Dowha-dong (2,107 houses) in Seoul, 729 houses in Shindang-dong, Seoul and 293 houses in Daelim-dong, Seoul and 2,400 houses in Kwonson-dong, Suwon.
Six ministries including the Ministry of Strategy and Finance reported to President Park Geun-hye on their major tasks for this year at the Administrative Support Center in Sejong City on January 13.
The "corporate leasing" will be introduced to lighten the housing burden on the middle class by having construction companies and investors build and lease houses with quality equivalent to commercial housing for up to eight years.
The company must lease at least 300 units if the company decides to construct the houses or 100 units if they purchase the homes. They must lease the houses for more than eight years and can use a separate brand called, "New Stay." Apartment compounds with the word "stay" after their original brand, to signify that it is an eight-year rental, is expected to appear, such as "Prugio Stay 8" and "Zi Stay 8." The rent is expected to be in the monthly range of 400,000-800,000 won with deposits of 30 million to 100 million won.
The corporate rental providers can purchase land owned by the Korea Land and Housing Corporation (LH) and by the government, and land in the Greenbelt area at a cheap price and will have various taxes cut, such as the transfer tax, acquisition tax, and corporate tax. In particular, the government will allow the companies to directly select their tenants and provide moving services, inducing the businesses to take part in real estate projects.
Their rents would differ depending on regions, in the range of 30 million won ($27,708) to 100 million won deposit plus average rent of 400,000 won in regions outside of the Seoul metropolitan area, 600,000 won in metropolitan areas and 800,000 won in Seoul. Rents are pegged to those in adjacent areas. Thereupon, assuming that the New Stay is built in Sanggye-dong, a residential zone for the middle class, it would likely charge about 700,000 won in rent in addition to 140 million won deposit based on six percent of conversion rate of jeonse to monthly rent.
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