South Korea to support 234,000 housing units in Seoul metropolitan area

The South Korean government plans to support the commencement of 234,000 housing units across the Seoul metropolitan area over the next five years, aiming for 53,500 units to begin construction by the end of this year.

The government has unveiled specific implementation measures to accelerate redevelopment projects in the Seoul metropolitan area to expedite the housing supply. The core of the plan involves streamlining administrative procedures to move up commencement dates and increasing floor area ratio limits to improve project profitability.

According to a review of the progress of the Jangwi District 9 redevelopment project released by the Ministry of Land, Infrastructure and Transport, a total of 773 redevelopment zones are currently underway in the Seoul metropolitan area, including 477 in Seoul, 239 in Gyeonggi Province, and 57 in Incheon. Of these, 128 zones have entered the commencement stage. The government plans to support the commencement of a total of 234,000 units (109,000 in Seoul and 125,000 in Gyeonggi Province and Incheon) in the metropolitan area over the next five years. For this year, the goal is to commence 72,000 units, with approximately 53,500 units expected to begin construction by the end of the year.

Accelerating Commencement Through Administrative Simplification and Incentives

To reduce the time it takes for redevelopment projects to reach the commencement stage, the government will reduce administrative procedures. Plans are to simplify the process so that basic plans and redevelopment plans are processed simultaneously, and business implementation plans and management disposal plans can be conducted through a single general meeting. Incentives, such as reductions in acquisition tax and increases in the purchase price of rental housing, will be provided to projects with fast progress, and support for increasing Project Financing (PF) loan guarantee limits will be extended until next year.

Measures to relax floor area ratios to improve profitability were also included. For sites building many small houses, park and green space standards will be relaxed, and in the case of public redevelopment, the floor area ratio will be increased up to 1.3 times the legal limit. To reduce the burden occurring during the relocation process, the limit for relocation expense loans will be increased, and a new additional relocation expense loan guarantee product will be created in case of shortages. The government plans to closely manage the process to ensure that relocation does not hinder projects or stimulate the Jeonse and monthly rent markets.

Resolving Construction Cost Disputes and Supporting Legislation to Address Field Difficulties

Construction cost disputes, the biggest obstacle to redevelopment projects, will be resolved in stages. The government will conduct quarterly training for union executives to enhance expertise and provide prior consulting on construction costs before contracts are signed with construction companies. To ensure these institutional improvements take effect quickly on the ground, the government will actively support discussions in the National Assembly of the Republic of Korea regarding core legislation. In particular, the amendment to the Urban Renewal Act, which was reflected in the January 3 measures and proposed immediately after the announcement, aims for processing during this year's regular National Assembly session.

Difficulties regarding permits and financing occurring in the field will be closely managed through the 'Integrated Housing Supply Support Center' to ensure rapid resolution. The video noted that while a design competition can be based on a notified redevelopment plan—as the contents of a notified redevelopment plan are equivalent to a notified district unit plan—cases have been identified where time is delayed because unions ignore this and conduct design competitions again. The government requested cooperation from related agencies to reduce such confusion in the field following the notification of redevelopment plans and to ensure rapid housing supply.

Source: original video (YouTube)