Forum co-hosted by lawmakers from Democratic Party, People Power Party
Academics, legal experts, civic groups to gather Wednesday
The Korea Housing and Urban Guarantee Corporation is joining forces with ruling and opposition lawmakers to hold a policy forum aimed at institutionalizing a new jeonse and monthly rent trust scheme designed to stamp out jeonse fraud and stabilize the housing market.
HUG announced Tuesday that it will co-host a policy forum titled "Policy Forum for Jeonse and Monthly Rent Stabilization" at the FKI Tower in Yeouido, Seoul, at 2:30 p.m. Wednesday, together with Rep. Bok Gi-wang of the Democratic Party of Korea and Rep. Kim Jeong-jae of the People Power Party.
The forum carries weight as a bipartisan effort by ruling and opposition parties to find solutions for a policy project led by a public institution. HUG officials, lawmakers from both parties, and representatives from academia, the legal community, civic groups and the housing industry are expected to attend and share their views.
The so-called "safe trust" scheme is a new lease model designed to provide tenants with secure jeonse arrangements, offer landlords a stable monthly income stream, and channel the pooled funds into housing supply.
At the heart of the model is how jeonse deposits are managed. Under the proposed structure, HUG — rather than the landlord — would directly hold and manage a tenant's jeonse deposit, returning it at the end of the contract. The arrangement aims to eliminate jeonse fraud at the source, curb the rapid shift toward monthly rent arrangements, and put pooled deposits to work financing new housing supply, promoting residential stability and a virtuous market cycle. The scheme would apply not only to individual landlords but also to corporate and public-sector landlords.
At the main forum session, HUG President Choi will present the corporation's plans for advancing the scheme under the theme "Jeonse and Monthly Rent Safe Trust Through HUG's Jeonse and Monthly Rent Stabilization Body." A comprehensive discussion will follow, moderated by Jin Mi-yun, a professor at Myongji University's Graduate School of Real Estate.
Panelists are expected to discuss a range of issues, including building the legal and institutional foundations for the safe trust scheme, creating incentives for landlords to participate voluntarily, and exploring ways to manage jeonse deposits stably while linking them to housing supply.
"This forum will be a meaningful occasion for ruling and opposition parties and experts from all sectors to come together under the shared goal of securing stable housing for the public," Choi said. "We will faithfully reflect the opinions raised and prepare to ensure the jeonse and monthly rent safe trust scheme takes root stably in the market."
According to HUG's own estimates of potential housing cost savings under the scheme, a tenant renting a row house or multi-unit dwelling in Seoul with a sale price of 300 million won ($223,000) and a jeonse value of 200 million won currently pays monthly rent of 740,000 won — based on a deposit of 10 million won and an assumed jeonse-to-monthly-rent conversion rate of 4.7 percent. Under the safe trust scheme, that cost would fall to 530,000 won, assuming the tenant borrows up to 80 percent of the jeonse value through a jeonse loan at an interest rate of 3.97 percent.
hwshin@heraldcorp.com
