A regional housing cooperative is a cooperative formed to obtain one's own home: a system that supplies housing to heads of households who own no home or a small home (one home of 85 square meters or less of exclusive area, including winners of housing subscriptions and their successors), regardless of whether they hold a housing subscription account. It is meant to curb reckless real estate speculation and serve people who actually need a place to live.

Members are recruited to build an apartment complex together, and because the cooperative itself becomes the developer, buys the site, chooses the builder directly and runs the project, it has the advantage of speed. In particular, since the members are effectively the developer, the project puts the members' interests first and many benefits go to them. Because the builder handles only construction, margins can be cut, so apartments are supplied relatively below market price.

Other advantages are that the price is lower than nearby general-sale apartments, no housing subscription account is needed, and one can apply regardless of subscription priority.

In addition, units can be transferred freely after project approval without resale restrictions, and members get priority in unit allocation over general buyers. Groups of like-minded people or coworkers can also form a club, join the cooperative and move in together, which helps build a community network.

But cooperative apartments do not have only advantages. So when choosing one, it is necessary to consider fully the problems that may arise.

First, if fewer than 50 percent of members have been recruited, the project can be delayed, and the damage falls entirely on the members. Because the project proceeds with a guarantee from the Korea Housing Guarantee Corporation, if the builder goes bankrupt or the cooperative defaults, the members bear all the responsibility. Even if it is said that 100 percent of the land has been bought during recruitment, in some cases only part of the land is purchased and the rest proceeds with mere land-use consents, which carries risk.

Second, the members' price is initially set low, but if it does not include extra costs such as land purchases, design fees, supervision fees, permit costs and agency fees, the price may well rise. A bigger problem is that if the cooperative cannot be formed, the entire project can come to nothing.

Just the plan for a regional cooperative apartment leads local landowners to set compensation above market prices. Some nearby landowners even plant trees or put up temporary buildings. With such behavior slowing the project, extra charges arise, and the members' burden and internal conflict grow.

Third, if there are special facilities on the site, buying the land takes time, and the resulting delay becomes the members' burden.

Beyond that, if the cooperative's agent sells units twice and gets entangled in lawsuits, disputes can arise among members; if the location is poor and recruitment slows, or if securing a top-tier builder is difficult, the asset value may be undervalued because of the apartment's brand image. Delays due to the bankruptcy of the agent or the builder are another problem. The fundamental problem of regional housing cooperatives stems from recruiting members before land acquisition and the project plan are fixed, so that if land is hard to secure, members face extra charges and the project runs behind schedule. Problems such as spreading false information arise especially at the steering committee stage, when members are recruited before applying for incorporation approval, and there are currently no rules on this at all.

Note: The Housing Act amendment introducing reported recruitment and mandatory public recruitment was promulgated on December 2, 2016 and took effect on June 3, 2017; the paper's reference to an 'amendment of August 12, 2017' could not be confirmed. An amendment in force from July 24, 2020 then required land-use rights to at least 50 percent of the site when reporting recruitment, and at least 80 percent land-use rights plus 15 percent ownership for incorporation approval. Check the current law for provisions and requirements. The paper's statement that there are 'no rules at all' at the steering committee stage reflects the time it was written.