Seoul mayor says public rental housing should serve middle class, not just low-income residents

Seoul Mayor Oh Se-hoon said Tuesday that public rental housing should not be limited to supporting low-income residents, arguing that the supply of quality public housing must be extended to the middle class as well. His remarks came amid criticism that offering "Mirinaezip" — a long-term jeonse housing program for newlyweds — in newly built Gangnam-area complexes amounts to high-priced public rental housing, but Oh said the role of public housing in easing housing costs is itself changing.

Speaking to reporters after visiting the Mirinaezip units at Jamsil Le El in Sincheon-dong, Songpa-gu, on Tuesday morning, Oh said, "In the past, there was a strong perception that public rental housing was unconditionally for low-income groups. I think that philosophy is gradually changing."

He noted that a similar controversy arose when Seoul introduced the long-term jeonse housing program "SHift" in 2007. That program was designed to allow middle-class households without homes to live for up to 20 years at no more than 80 percent of the surrounding market rate, without having to buy a home.

"Easing the housing cost burden on the middle class and giving them some breathing room is also meaningful," Oh said, adding that the target and method of public rental housing supply need to change to support housing stability and childbirth among newlyweds and young people.

The Jamsil Le El complex Oh visited Tuesday includes 98 Mirinaezip units and 100 existing long-term jeonse units among a total of 1,865 households. Deposits for the Mirinaezip units are set at approximately 620 million won ($451,000) for the 45-square-meter type, around 700 million won for the 51-square-meter type, and 842 million won for the 59-square-meter type.

The controversy over who the policy is meant to serve has intensified as Mirinaezip supply has expanded to high-priced complexes in the Gangnam area. The deposit for a 59-square-meter Mirinaezip unit at Cheongdam Le El is set at 1.17 billion won, while an 84-square-meter unit at Raemian Firstiage in Banpo-dong, Seocho-gu, is priced at 1.39 billion won. Critics say the program, despite being public rental housing, effectively benefits only newlywed couples who can raise hundreds of millions of won in cash, undermining its stated purpose.

Oh acknowledged the tension. "Because the structure involves securing a certain portion of units from redevelopment and reconstruction complexes and supplying them as Mirinaezip, we have no choice but to accept that drawback," he said. "We are aware that there are price ranges that make it difficult for young people and newlyweds to move in, and we are studying how to address that."

At a meeting with newlywed residents, participants said housing stability had helped them decide to have children, but they also raised practical concerns about securing deposits, long-term residency and moving to larger units.

One resident who recently gave birth said that being able to live stably in a good environment made her want to have another child, but added, "It is not easy for newlyweds to raise hundreds of millions of won in deposits, and there are also restrictions on using policy loans."

The dedicated newlywed Buttimok jeonse loan applies only to homes with a lease deposit of 400 million won or less in the greater Seoul area, which means Jamsil Le El Mirinaezip units fall outside its scope. The loan ceiling for the metropolitan area was also reduced from 300 million won to 250 million won under the June 27 measures introduced last year.

The Seoul Metropolitan Government has been continuously asking the central government to raise the eligible lease deposit ceiling for the newlywed jeonse loan from the current 400 million won to 675 million won, and to restore the metropolitan area loan limit to the previous level of 300 million won.

Another resident expressed concern about what housing prices and inflation would look like in 20 years, questioning whether it would actually be possible to buy a home at that point. The resident proposed options such as extending the residency period upon childbirth or allowing equity-accumulation purchases.

Residents also called for improved conditions for transferring to larger Mirinaezip units as families grow. They said transfers are currently possible when a unit becomes vacant, but the timing and location are hard to predict. They also noted that the complex's daycare center had a waiting list running into the hundreds almost immediately after move-in.

Oh said that while discounts on pre-sale prices — ranging from 10 percent for two children to 50 percent for five — are available, the practical usability of those benefits needs to be examined. "I will review whether they can be turned into genuinely useful benefits," he said. On the issue of unit transfers, he said, "Ultimately, securing sufficient supply is what creates options."

To that end, the Seoul Metropolitan Government has been asking the Ministry of Land, Infrastructure and Transport to raise the maximum share of long-term jeonse housing that can be designated as Mirinaezip. Oh said the city has formally requested that the ministry raise the cap from 50 percent to 70 percent, adding that increasing supply would go some way toward meeting residents' demand for transfers.

The city is also pursuing a plan to secure Mirinaezip units in new residential sites currently under discussion with the central government. Oh said negotiations over those sites are proceeding on the premise that a certain proportion will be allocated to Mirinaezip.

Oh also raised the relaxation of floor-area ratio limits for redevelopment and reconstruction projects as an additional supply measure. He said the Ministry of Land, Infrastructure and Transport appears to be positively reviewing a plan to raise the floor-area ratio for redevelopment complexes to 1.2 times the legal ceiling, and expressed hope that supply could be secured faster than planned.

Since the city first supplied Mirinaezip units in July 2024, it has provided a total of 7,108 units through last month. It plans to secure about 4,000 units per year going forward, with an additional 17,500 units to be supplied by 2030.