LH Accepts 'New Purchase' Applications Without Architectural Drawings... Project Briefing on September 1 [Real Estate AtoZ]

Introduction of 'Preliminary Location Review' with 5-Page Business Plan
Accelerated Effort to Secure Housing Supply in the Seoul Metropolitan Area

Korea Land and Housing Corporation (LH) is streamlining its application procedures in order to secure newly built purchase-rental housing supply in the Seoul metropolitan area more quickly. Under the new system, applicants can submit a simple business plan without any initial design drawings. If the proposed location passes the suitability assessment, even the document screening process will be waived.

New Acquisition Location Preliminary Review Project Poster. Korea Land and Housing Corporation

On August 25, LH announced the launch of the "New Acquisition Application Simplification and Location Preliminary Review Project," which reflects these changes.

The new construction-purchase agreement is a system in which a private developer submits a housing construction plan for their own land to LH. LH then reviews the location, business viability, price, housing quality, and developer qualifications before selecting projects to purchase. Once the agreement is signed, the private developer builds the housing. If the construction and quality, as well as usage inspection requirements, are met as stipulated in the agreement, LH purchases the completed homes and supplies them as rental housing.

Previously, developers had to prepare design drawings even when it was uncertain if LH would purchase the property. Individuals or corporations lacking experience with the new construction-purchase process often found it difficult to determine if their land was suitable for the project. The need to spend design fees upfront, without knowing whether a purchase would go through, was seen as a significant barrier to entry. Companies that required board approval also demanded confirmation of purchase eligibility in advance.

LH has now removed this obstacle. From now on, applicants only need to submit a simplified business plan of up to five pages (A4 size), without requiring design drawings. The plan should include information on access to public transportation, educational conditions, convenience facilities, and the surrounding residential environment of the location.

LH has also established a new "Location Preliminary Review Committee." This committee will determine the suitability of a proposed site for the new construction-purchase project based solely on the submitted business plan. If the proposal passes this stage, it is considered to have successfully completed the traditional document screening, and during the subsequent purchase review, the location criteria are given the highest possible score. For sites that pass the preliminary review, design drawings must be completed within one month to maintain the effectiveness of the evaluation. The goal is to finalize agreements for all accepted projects within this year.

Eligible applicants include individuals or corporations who own land in the Seoul metropolitan area capable of accommodating at least 500 housing units (or 200 units in regulated areas, with the possibility of combining multiple sites). Applicable cases include leftover land from office building consolidations, closed mart or factory sites, land managed by financial institutions through trusts, REITs, or funds, as well as idle urban land held by individuals or family associations. Land that was submitted during the past three years is not eligible. Proof of land ownership or a consent form for land appraisal must also be provided.

Applications must be submitted online through the LH Cheongyak Plus homepage by September 15. Land located in multiple regions may be grouped together and submitted in one application. LH will hold a project briefing session at its Southern Gyeonggi Regional Headquarters in Seongnam, Gyeonggi Province on September 1, and will also provide one-on-one customized consultations until September 14.

Cho Kyungsook, Head of Housing Welfare Division at LH, stated, "We have significantly lowered the entry barrier to speed up the supply of high-quality rental housing in prime urban locations. By actively utilizing top-quality private land, we will reduce the burden on developers and accelerate the supply of housing for the public’s residential stability."

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