Although Residential Supply in Semi-Industrial Areas is Planned... 'A Long Way to Go'

Government Unveils Public Development Plans, Drawing Attention to Semi-Industrial Areas
Many Prime Locations Like Sindorim and Seongsu

However, Various Stakeholders Involved
Need to Establish Measures to Revitalize Projects

[Asia Economy Reporter Lee Chun-hee] As the government proposes the redevelopment of semi-industrial areas as part of its urban housing supply plan, interest in Seoul's aging factory-dense areas is rising. This is because many semi-industrial zones are located in prime areas such as Sindorim-dong and Seongsu-dong, raising expectations that development could alleviate the housing shortage in Seoul.

However, even the ongoing development of semi-industrial areas is facing difficulties due to conflicts among various stakeholders, prompting calls for the government and local authorities to actively step in and devise measures to revitalize these projects.

On the 6th, the government announced the "Measures to Strengthen the Housing Supply Base in the Metropolitan Area," proposing a public-private joint contest project to secure 7,000 housing units by 2022 through the development of Seoul's semi-industrial areas. The plan includes creating anchor industrial facilities to sequentially promote redevelopment, lowering the mandatory industrial land retention ratio from 50% to 40% for three years, and offering incentives such as public acquisition of some industrial facilities using space-support REITs. The government plans to amend Seoul city ordinances in the second half of this year and select one or two pilot project sites through a joint contest involving the Korea Land and Housing Corporation (LH) and Seoul Housing and Communities Corporation (SH Corporation).

Currently, semi-industrial areas in Seoul cover about 19.98㎢, approximately 3.3% of the city's total area. Yeongdeungpo-gu is the largest with 5.0㎢, followed by Guro-gu with 4.3㎢, Geumcheon-gu with 4.1㎢, and Seongdong-gu with 2.0㎢. Industry insiders consider Guro-gu's Sindorim-dong, Seongdong-gu's Seongsu-dong, and Yeongdeungpo-gu's Mullae-dong, all already designated redevelopment zones, as strong candidates.

However, the industry analyzes that redevelopment of semi-industrial areas is not straightforward, as the interests involved are far more complex compared to typical residential redevelopment.

Seoul Guro-gu 'Sindorim 293 Urban Environment Improvement Project Area' panorama (Photo by Lee Chunhee)

A representative example is the "Sindorim 293 Urban Environment Redevelopment Project" in Sindorim-dong, Guro-gu, which is known as a likely government pilot project site. This project is currently being pursued under the "landowners, etc." method, which involves obtaining approval for project implementation with the consent of 75% of approximately 930 owners without forming a union.

However, in this area, the groups collecting consent for project approval are split between the "Promotion Committee" and the "Residents' Representative Council," both struggling to reach the 75% consent threshold. Additionally, groups demanding the cancellation of the redevelopment zone continue to voice opposition, making the situation more difficult.

Recently, as the government proposed public involvement in various redevelopment projects, some residents, feeling a sense of crisis due to repeated delays, formed a unified promotion group among the organizations. They demand swift project progress, stating, "If development is delayed, it is impossible to predict how Seoul city or the government will respond."

A local real estate agent, Mr. A, explained, "From the perspective of large landowners or factory owners, it is naturally difficult to be satisfied with receiving just one apartment instead of a place that continuously generates income."

Garden Five in Munjeong-dong, Songpa-gu, Seoul. (Provided by SH Corporation)

Criticism of the plan itself has also emerged. Experts warn that forcibly increasing the residential ratio by recognizing even fully operational factories as "idle land" could lead to the collapse of the industrial base. Eun Hyung Lee, a senior researcher at the Korea Construction Policy Institute, stated, "Areas densely populated with small and medium manufacturing industries form invisible industrial clusters. Increasing the proportion of residential facilities could negatively affect the area's value and competitiveness."

Some also express concerns that publicly involved industrial facilities could become a "second Garden Five." Located in Munjeong-dong, Songpa-gu, Garden Five is a complex shopping mall completed in 2008 for small business owners displaced by the Cheonggyecheon restoration project. However, even after 12 years, it has a vacancy rate of 12%, with the "Tool Building," a specialized store for tools and industrial supplies, experiencing a vacancy rate of 30%. The SH Corporation is attempting to ease restrictions on tenant business types within Garden Five to reduce vacancies, but this has been criticized as an insufficient solution.

Lee suggested, "If companies leave and the semi-industrial area's value and function are effectively lost, it is appropriate to pursue zoning changes. Focusing solely on increasing residential facilities through rapid redevelopment in other cases carries significant risks of side effects."

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