'Protecting the Greenbelt' Seoul City Presents Reconstruction Card... The Government's Choice

Proposal to Ease Reconstruction Regulations in Gangnam Area and Yeouido
However, Some View Opposition Likely Due to Government Concerns Over Rising Housing Prices

[Image source=Yonhap News]

[Asia Economy Reporter Lim On-yu] The Seoul Metropolitan Government is reportedly proposing to the government a plan to ease regulations on apartment reconstruction in exchange for preserving the Green Belt, as part of efforts to expand housing supply.

According to Seoul City on the 24th, the city recently suggested at the government’s housing supply expansion task force (TF) meeting that administrative approval procedures be carried out for the reconstruction of aging apartments in Seoul’s Gangnam area and Yeouido. The Seoul City proposal reportedly includes Yeouido Pilot Apartments, Apgujeong Hyundai Apartments, Daechi-dong Eunma Apartments, and Jamsil Jugong Complex 5.

Earlier, during discussions between Seoul City and the government, there was also a proposal to increase housing supply by applying a public reconstruction method to these complexes; however, the Ministry of Land, Infrastructure and Transport and the Ministry of Economy and Finance reportedly opposed this. The public reconstruction recently introduced as part of the government’s July 10 real estate measures involves public entities such as Seoul Housing and Communities Corporation (SH) or Korea Land and Housing Corporation (LH) participating to relax floor area ratio and height restrictions in exchange for increasing rental housing or public contributions.

Applying such public reconstruction has faced skepticism regarding feasibility, as residents prioritizing profitability find it difficult to accept conditions like expanding rental housing supply. Consequently, Seoul City has put the public reconstruction plan on hold and shifted its stance toward general reconstruction approval procedures.

Seoul City’s position aligns with the market sentiment that sees reconstruction approval for major complexes as the most efficient way to expand supply. The city appears to have chosen to focus on supply expansion even if housing prices temporarily rise due to reconstruction.

However, even if reconstruction proceeds immediately, it takes at least 5 to 10 years before the effects of increased housing supply become apparent, which is a concern. Additionally, the government is expected not to accept this plan due to its potential to trigger housing price increases.

Professor Shim Gyo-eon of Konkuk University’s Department of Real Estate said, "Although the government is making a full-scale effort to establish supply plans, most of the measures target peripheral areas excluding the core areas of Seoul. Revitalizing urban reconstruction and redevelopment is the key issue, but the government has imposed so many regulations that it is difficult to ease them."

The late former Seoul Mayor Park Won-soon announced in July 2018 an integrated development plan for Yeouido and Yongsan, including Yeouido apartment reconstruction, but postponed the plan after about a month due to a sharp rise in Seoul housing prices.

Separately from proposing reconstruction approvals for major complexes to the government, Seoul City is also promoting supply expansion through public redevelopment and reconstruction within the city.

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