South Korea plans to roll out 20,000 low-rent homes for young people starting next year, with the program focused on areas outside the Seoul metropolitan region. Under the plan, tenants would pay 1,000 won per day, and the government has set aside 1.4 trillion won for the project as it tries to keep younger residents in regional areas and respond to population decline and low birthrates.
The move follows a pilot in Pohang this year. The city offered 100 units under the same 1,000-won housing model and received 1,055 applications for 100 spots, putting the acceptance rate below 10%. Rent was set at 1,000 won a day, about $0.7, or roughly 30,000 won per month.
Lee Jae-myung outlined the youth budget first
The strong response to local pilots lines up with a broader policy push from President Lee Jae-myung. On Aug. 28, Lee presented the direction of the country’s 2027 youth budget, grouping youth policy into four areas: jobs, asset building, housing, and marriage. The report said this was the first time the South Korean government had presented a budget framework for a specific group before releasing the full national budget.
Lee said young people were once seen as the most energetic group in society, but now have become the group with the fewest opportunities.
1.4 trillion won to expand the model nationwide
Following that direction, the Ministry of Economy and Finance included 1.4 trillion won, about $980 million, in next year’s budget to take the Pohang-style housing model nationwide. Korea Land and Housing Corp. (LH) will buy completed homes outside the capital region and re-lease them to young people at low rates, with 10,000 units to be offered next year and another 10,000 the year after.
The model is not entirely new. Incheon had already run a pilot under the same name, while Hwasun County and Taebaek City had also tested similar low-cost housing programs. This time, the policy is being elevated to a nationwide level.
More youth rental housing planned in the capital region
Outside the regional program, the government also plans to increase youth housing supply in the Seoul metropolitan area. It will allocate 3.8 trillion won, about $2.66 billion, next year to provide 20,000 public rental units near subway stations and other neighborhoods favored by young residents. Still, only 5,000 units are scheduled for the first year, meaning just one-quarter of the total target will be delivered at the outset.
Including these additions, total youth public rental housing supply next year is expected to reach 106,000 units, up from an estimated 71,000 this year, according to the report. The related budget will nearly double to 18.1 trillion won, about $12.7 billion, while total public housing supply will rise to 218,000 units.
Young people earning no more than 2.73 million won per month and paying their own rent will also be able to apply for an additional rent subsidy starting next year.
Cheap rent may not be enough on its own
The report said that even sharply reduced rent may not solve the lack of local job opportunities. If young people cannot find suitable work in regional areas, they may still return to the Seoul metropolitan region.
The scramble for units in Pohang shows demand is there. Still, keeping young residents in regional cities over the long term will depend on jobs. Kwon Dae-joong, a professor at Hanyang Cyber University identified in the Chinese report as a Seoul university professor, said the policy direction is right, but its success will depend on whether it produces enough real supply rather than remaining a slogan.