Asset gap between neighbors tops W1b as LH long-term jeonse residents demand pre-sale conversion

Disputes over eviction and pre-sale conversion are intensifying at long-term jeonse housing complexes originally introduced to provide residential stability for low-income households. Calls for pre-sale conversion are now emerging at complexes supplied by Korea Land and Housing Corporation (LH), following similar conflicts at several complexes in Songpa-gu and Gangdong-gu supplied by Seoul Housing & Communities Corporation (SH). While the Seoul Metropolitan Government has held firm on requiring existing tenants to vacate once the mandatory lease period ends — citing a municipal ordinance — LH has taken a different stance, saying the matter will be decided after the mandatory rental period expires.

According to the real estate industry on Tuesday, the tenant representative council at Gangnam Jagok Hillstate in Gangnam-gu recently issued an appeal addressed to residents of Building 505, calling for a pre-sale conversion opportunity for the 370 long-term jeonse units in that building. Of the complex's 1,339 total units, those in Buildings 1 through 4 — designated as installment rental and 10-year public rental housing — have already completed pre-sale conversion, but the 370 long-term jeonse units in Building 505 were excluded from that process.

"Long-term jeonse housing was designed as a residential ladder — guaranteeing up to 20 years of occupancy at an affordable deposit while allowing tenants to accumulate assets and eventually own their own home," the tenant council said. "But over the past decade, Seoul home prices have surged to an unmanageable degree, and the asset gap between pre-sale and jeonse households, which was not large at the time of move-in, has widened to more than 1 billion won ($749,000)."

The council added that long-term jeonse tenants, upon expiry, receive back only a deposit far below market price, making it difficult to afford even jeonse and monthly rent in the surrounding area. "This is a clear failure in the design of a national policy that did not account for the surge in home prices," it said.

The council said it intends to negotiate with LH over a reasonable pre-sale conversion plan for long-term jeonse households, adding that residents must "proactively assert our legitimate rights."

Under the current Special Act on Public Housing, the mandatory rental period for long-term jeonse housing is 20 years, and LH has said it is difficult to determine an operational policy before that period ends. The complex began accepting residents in June 2015, leaving roughly nine years before the mandatory period expires.

LH said it is aware that various opinions exist, including calls for pre-sale conversion and lease renewal. "Since the Special Act on Public Housing stipulates the mandatory rental period, we plan to make a comprehensive judgment on whether to continue rental operations after that period expires, taking into account the policy environment at the time and the corporation's business conditions," it said.

LH also said it has not received a formal request for consultations on pre-sale conversion from the tenant representative council, but that it is aware of the issue.

LH's stance differs from that of the Seoul Metropolitan Government, which has made clear that existing tenants must vacate. Seoul has maintained, citing Article 7, Paragraph 1 of its municipal ordinance enforcement rules, that tenants must leave once the maximum 20-year lease period ends. The city's position is that, since the housing was not originally supplied on the premise of pre-sale conversion, existing residents cannot be given priority purchase rights.

Seoul Mayor Oh Se-hoon has previously drawn a firm line on tenant demands for pre-sale conversion, criticizing them as "unconscionable overreach."

Similar demands had already emerged at long-term jeonse complexes supplied by the Seoul Metropolitan Government as their lease periods approached expiry. In June, some 200 residents of the long-term jeonse units at Songpa Pinetown in Jangji-dong, Songpa-gu, gathered for a meeting at which they called on the city to extend their contracts and allow individual, phased pre-sale conversion. Earlier, in May, residents of long-term jeonse units at Gangil Riverpark and Gangil LienPark in Gangdong-gu called for guaranteed lease renewals and pre-sale conversion.

Unlike the Seoul Metropolitan Government, LH has yet to finalize its policy on whether existing tenants may continue to reside in units after the mandatory rental period ends.

A Seoul Metropolitan Government official said the Special Act on Public Housing governs only the mandatory rental period for the properties concerned. "Since the law contains no provision on the length of tenancy for residents, Seoul has supplemented this through its municipal ordinance enforcement rules," the official said.

As long-term jeonse housing programs pass the 20-year mark since their introduction, units reaching the end of their lease periods are expected to increase in earnest from next year. According to the Seoul Metropolitan Government, 310 units across three complexes — Songpa Pinetown, Magok Sumyeongsan Park and Sinwol-dong Dongdo Centrium — are set to reach contract expiry next year. The number of units reaching expiry is projected to grow to 682 in 2028 and 1,747 in 2029.