Seoul’s long-term rental program helps residents become homeowners

In Seoul, South Korea, 72 percent of residents who moved out of the city’s long-term rental housing program have successfully become homeowners.

The Seoul Metropolitan Government examined data from 1,708 households that left the program between 2016 and 2021, finding they lived in the rental units for an average of eight years and four months. This rate of homeownership is 12 percentage points higher than that of people leaving other public rental housing in the city.

Seoul first introduced its long-term rental program in 2007 and has since provided housing for a total of 45,715 households. The average security deposit for these units is approximately 293 million won (about $216,000 USD), which is about 41 percent of the average apartment rental price in Seoul. City officials believe the lower housing costs allowed residents to save money and prepare to buy homes.

The city plans to receive back about 9,300 long-term rental units as their 20-year contracts expire between now and 2031. Seoul will then re-offer these units to young people and newly married couples through a program called “Mirinejip” (meaning “my first home”) and continue the long-term rental program. A recent survey found that 73.9 percent of Seoul residents support the program’s plan to redistribute the units after the initial contracts end.

Mayor Oh Se-hoon announced plans to start construction on 310,000 new homes by 2031, including 17,500 “Mirinejip” units, to further expand housing opportunities for residents. He described the long-term rental program as a stepping stone toward homeownership, and a way to create a cycle where vacated homes become available for others.