Building 22 Small Rental Units, Yet It's Called Public Redevelopment...

[Asia Economy Reporter Yoo In-ho] Recently, the SpoWorld multi-family housing development project in Yeoksam-dong, Gangnam-gu, Seoul, included in the government's public redevelopment plan, has become embroiled in controversy belatedly.

According to the real estate industry on the 18th, the SpoWorld site located at 653-4 Yeoksam-dong, Gangnam-gu, is scheduled to be developed into 185 households and cultural facilities (senior and infant culture centers). This project was included in the public redevelopment plan announced on the 6th by the Ministry of Land, Infrastructure and Transport as part of the 'Plan to Strengthen the Housing Supply Base in the Metropolitan Area' to expand housing supply in idle urban spaces in Seoul.

However, of the 185 apartments to be built in SpoWorld, only 22 units are public rental housing. The industry evaluates that this does not align with the original intent of expanding the supply of public rental housing. In particular, the industry expresses confusion over the fact that this site, which was originally only allowed to be used for sports facilities, was changed to a multi-family housing site on the condition of building only 22 rental housing units.

In fact, the SpoWorld site was rezoned for multi-family housing (apartments) through an urban planning change in May last year under these conditions. GL Industrial Development, a real estate developer that purchased the SpoWorld site for 105.8 billion KRW, proposed changing the use from existing sports facilities to public housing to the Seoul Metropolitan Government in October 2018, and Seoul approved the rezoning to allow apartment construction last year after two rounds of review.

GL Industrial Development is expected to gain considerable development profits immediately from the rezoning. According to the development plan, a building with five basement floors to 19 above-ground floors will be constructed on this site, consisting of apartments, neighborhood living facilities, and sports facilities.

The public rental housing, however, will be located in a separate building constructed from the 4th basement floor to the 11th floor, along with cultural facilities such as senior and child centers. The public rental housing units will be small-sized homes with exclusive areas of 26㎡ to 36㎡, and will be supplied to young newlyweds and others through the Seoul Housing and Communities Corporation (SH) in the future.

Because of this, the industry points out the need to apply strict standards to public redevelopment in urban development cases where enormous development profits are possible simply through rezoning.

An industry official said, "Approving rezoning with only 22 rental housing units could potentially be seen as preferential treatment," adding, "The proportion of public rental housing must be increased further for the original purpose to be realized."

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