MOLIT to Hold Non-Residential Remodeling Business Meeting on July 30... Knowledge Industry Centers Included in Purchases

Guidance on Participation Procedures and More

The Ministry of Land, Infrastructure and Transport and Korea Land & Housing Corporation (LH) announced on July 29 that they will hold a meeting for project operators at the LH Southern Gyeonggi Regional HQ on July 30 to accelerate the "Non-Residential Remodeling Project," which aims to convert vacant commercial and lodging facilities in urban areas into public rental housing.

During the meeting, the ministry plans to explain application procedures and regulatory improvement measures to private operators interested in remodeling non-residential buildings and selling them to LH, as well as to gather feedback from the field. The non-residential remodeling project involves purchasing vacant buildings in city centers and renovating them into studio apartments or officetels to be rented to young people and newlyweds.

LH announced a recruitment notice for non-residential remodeling purchase agreement operators on July 21, and began accepting applications from July 27. The deadline is September 9. In its alternative housing supply plan announced in May, the ministry stated that it aims to provide 15,000 units over two years and 33,000 units by 2030 through this method.

Perspective rendering of a knowledge industry center in Gyeonggi.

Starting with this project, the government will also include knowledge industry centers—previously classified as factories—as eligible for LH acquisition. Until now, only vacant commercial and lodging facilities were eligible, but as vacancies in knowledge industry centers across cities increased, the government decided to convert them into residential spaces for public rental housing.

A knowledge industry center is a multi-story building that houses manufacturing, knowledge industry, and information and communications businesses. They were previously known as apartment-type factories. The manufacturing areas inside these centers are officially classified as factories. Because the Enforcement Decree of the Special Act on Public Housing had excluded factories from acquisition by LH, only some business facilities categorized as supplementary spaces were previously eligible to be purchased.

Regulations will also be eased to facilitate the smooth conversion of knowledge industry centers into residences. Through 2027, for remodeling projects that create quasi-residential spaces under 30 square meters, the requirement to add additional parking spaces will be temporarily waived. In addition, ordinary workers who are not employed by companies occupying the building will now be allowed to live in rental dormitories located within knowledge industry centers.

Financial support measures will also be implemented to encourage private sector participation. Operators who remodel properties such as officetels into quasi-residential units will be eligible for loans from the fund at around a 3% interest rate, and guarantees from the Korea Housing & Urban Guarantee Corporation (HUG) will also be provided.

The government expects that the remodeling of non-residential buildings, compared to new construction, will require a shorter construction period, enabling housing supply within a shorter timeframe. Another advantage is that since these buildings are located in city centers, with convenient access to public transportation and workplaces, they can better meet the high demand for “live-near-work” housing among young people.

Han Seongsu, Director-General of Housing Welfare Policy at the ministry, said, “The government is focusing on supplying new-build purchase-and-lease housing with significant short-term supply effects to stabilize the rental market. Alongside this, we will accelerate non-residential remodeling projects, which convert vacant commercial buildings, lodging facilities, and knowledge industry centers in city centers into residential spaces.” He added, “We will continue to explore diverse short-term supply methods to alleviate the housing burden for young people.”

This content was produced with the assistance of AI translation services.