LH seeks private partners to convert vacant hotels, offices into affordable rentals for young Koreans

Korea Land and Housing Corporation (LH) announced Wednesday it will launch a full-scale solicitation of private operators for its purchase-agreement program to convert non-residential buildings into public rental housing for young people and newlyweds.

The non-residential conversion and remodeling program turns vacant commercial spaces, offices and other non-residential buildings in urban areas into housing and supplies them as public rental units. LH plans to combine direct-purchase and purchase-agreement approaches to deliver a total of 2,000 units this year, prioritizing prime locations within regulated zones in Seoul and Gyeonggi Province.

Esquisse Gasan in Gasan-dong, Geumcheon-gu, Seoul, is a leading example of the program — a former hotel remodeled into youth rental housing. The complex offers units ranging from 16.65 to 28.57 square meters (exclusive use area) with deposits of 8 million to 12.9 million won ($8,740) and monthly rents of 210,000 to 340,000 won, all below 50 percent of prevailing market rates.

Under the direct-purchase approach, LH acquires buildings itself, changes their designated use and supplies them as rental units. That solicitation launched April 3 and is currently in the verification stage for submitted applications. The new solicitation uses the purchase-agreement approach: LH and a private operator sign an agreement in advance, the private party remodels the non-residential building, and LH then purchases it to supply as public rental housing.

Eligible buildings must be located in prime areas within regulated zones in Seoul or Gyeonggi Province, be no more than 30 years old, incorporate seismic design, and fall into one of the following categories: neighborhood living facilities, office buildings, training facilities, facilities for the elderly or children, lodging facilities, or factories within knowledge industry centers. The buildings must also be convertible to residential or quasi-residential use.

This round expands both the eligible areas and building types. On the geographic side, three cities and districts in Gyeonggi Province recently designated as regulated zones — Guri, Yongin's Giheung-gu and Hwaseong's Dongtan-gu — have been added, bringing the total coverage to Seoul and 15 cities and districts in Gyeonggi Province.

On the building-type side, factories within knowledge industry centers are newly eligible for purchase, in addition to the existing categories of commercial spaces, offices and lodging facilities. However, because relevant laws including the Special Act on Public Housing are currently being amended, the review process and selection of eligible projects will proceed in line with the progress of those legislative changes.

The process runs in the following sequence: document screening, preliminary verification, purchase-agreement review, purchase agreement, conversion and remodeling, and finally LH acquisition and supply. The program targets a ground-breaking in the first half of 2027.

Applications may be submitted by the owner of a non-residential building, or jointly by the owner and a remodeling contractor. The purchase price will be determined through an appraisal conducted after the conversion and remodeling are complete.

The application window runs from Monday through Sept. 9. Applicants must submit required documents — including a remodeling plan — by email. Full details are available in the purchase announcement posted on LH's Cheongnyak Plus platform.

"We will accelerate the pace of the program so that vacant commercial spaces and offices in prime urban locations can be swiftly transformed into public rental housing for young people and newlyweds, contributing to housing stability," LH President Lee Seong-hun said. "We will do our utmost to deliver supply results that people can actually feel."