Compulsory Construction of Small Houses in Seoul and 16 Other Metropolitan Cities Revived.

From as early as next month, `Compulsory Ratio of Small Houses` will be applied to the construction or reconstruction of an apartment complex in Seoul and 16 other metropolitan cities, which requires small apartments to cover 15 to 25 percent of the whole construction.

Ministry of Construction and Transportation announced on Oct. 9 that `A Guide to Supply Ratio by Respective Housing Sizes for the Housing Union` had been amended.

Ministry of Construction and Transportation will enforce it from as early as November after an examination conducted by Regulatory Reform Committee.

In this regard, related business circles object that compulsory construction of small houses is ignorant of the market situation, and the overall sale contract rate will fall down if mid-large sized apartments are combined with small-sized ones.

The compulsory ratio will be applied to following 16 metropolitan congestion-controlled cities: Seoul, Incheon (partially), Sungnam, Anyang, Uijeongbu, Guri, Hanam, Goyang, Namyangju (partially), Suwon, Bucheon, Gwangmyung, Gwacheon, Gunpo, Siheung (partially). It will be applied when 00 and above houses are built through reconstruction or a private housing operation.

But such areas of low density of population as Chamsil, Chungdam, Banpo, Amsa, Myungil and Hwagok and such a case that the operation plan was submitted prior to the effectuation date of the new guide or that the examination of construction has already been completed will be exempted.

Ministry of Construction and Transportation defined 20 percent as standard but also allowed mayors and governors to arrange the ratio within 5 percent deviation. And if a large number of apartments are not sold, then mayors and governors are allowed to suspend the enforcement of this guide temporally by an approval of the Construction and Transportation minister.

Ministry of Construction and Transportation also decided to increase the aid of National Housing Funds from 30 million won per household to 50 million won by the end of next year in case of constructing a small house under 18 pyoung. In addition, Ministry of Construction and Transportation decided to lower the interest of National Housing Funds provided to housing construction companies from 7 percent current interest to 5 percent.

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