Why Seocho-gu Denied SH's Land Transaction Permit Application for the Site of Korea Educational Development Institute in Umyeon-dong?

Government's First Halt on Greenbelt Housing Without Principles... Prioritize 'Youth Sale Housing' Over Rental Housing to End Residential Nomadism

[Asia Economy Reporter Park Jong-il] Seocho-gu (Mayor Cho Eun-hee) announced on the 30th that it denied the land transaction permit application submitted by Seoul Housing and Communities Corporation (SH Corporation) for the site of the Korea Educational Development Institute (92-6, Umyeon-dong) because the land use purpose did not comply with relevant laws.

The district office notified the denial on the 29th in accordance with the Real Estate Transaction Report Act, which requires the district mayor to process within 15 days.

SH Corporation submitted the land transaction permit application on July 15 with plans to purchase the site, remodel the existing buildings, and supply welfare housing (rental) and other facilities.

Recently, SH Corporation planned to purchase the land, remodel the existing buildings (14,855㎡) within the greenbelt into senior welfare housing (98 units), and rezone the parking lot site (about 7,700㎡), which is outside the greenbelt, from the first general residential area to the second general residential area to supply a total of 344 public rental housing units, including 246 units of 7-story Happy Housing.

The site is about 78% designated as a development-restricted area (greenbelt) under urban planning. A concrete building has been located on part of the greenbelt for 44 years and was used by the Korea Educational Development Institute until 2017. It was relocated to Jincheon, Chungbuk in 2017 under the Special Act on the Creation and Development of Innovation Cities and has been vacant for three years.

The owner of the site, the Korea Educational Development Institute, tried to sell the previous real estate to a private entity designated as a corporate rental housing promotion district for 88.1 billion KRW four years ago in 2016, but the contract was canceled because Seoul City did not approve it, citing non-compliance with greenbelt policies. Subsequently, the property was auctioned unsuccessfully five times in 2017 (82.7 billion KRW), ten times in 2018 (74.8 billion KRW), and three times in 2019 (68 billion KRW).

1. Background of the Denial of Land Transaction Permit

Seocho-gu stated, "The greenbelt, as the lungs of the city and a future asset, must be preserved and maintained," adding, "In a situation where COVID-19 has become a daily reality, clean air and green healing spaces are more necessary. Therefore, the greenbelt damaged by the public (so-called public graybelt) should no longer be neglected and must be restored for future generations," explaining the background of the denial of the land transaction permit for the former Korea Educational Development Institute site.

The district office pointed out that four years ago, Seoul City did not allow private entities to operate rental housing projects but permitted SH Corporation, a Seoul City-affiliated organization, to build senior welfare housing and rental housing, which contradicts Seoul City's consistent policy direction to preserve development-restricted areas.

The owner, Korea Educational Development Institute, attempted to designate the site as a corporate rental housing promotion district and sell it to private entities in 2016, but the corporate rental housing was denied by Seoul City for non-compliance with greenbelt policies, resulting in failure.

Legally, first, to obtain a land transaction permit within the greenbelt, there must be actual demand such as "use as one's own residential housing land," but the land use plan applied for by SH Corporation does not meet this requirement.

Second, under the Special Measures Act on the Designation and Management of Development-Restricted Areas, while a change of use to "facilities for the elderly and children" is possible for buildings where new construction is prohibited within the greenbelt, currently broadcasting facilities can be newly constructed, but senior welfare housing is excluded from facilities for the elderly and children. Therefore, changing the use of existing broadcasting and communication facilities to senior welfare housing is also impossible, and Seocho-gu denies the permit according to the Real Estate Transaction Report Act.

The district office also judged that SH Corporation's plan to remodel the building into senior housing is nominally remodeling but is practically a new residential facility equivalent to new construction.

※ What are facilities for the elderly and children?

- According to Appendix 1 of the Enforcement Decree of the Building Act, these include child-related facilities, senior welfare facilities, other social welfare facilities not classified under other uses, and labor welfare facilities. (Detached houses and apartment houses among senior welfare facilities are excluded.)

2. Seocho-gu's Paradigm Shift Plan for Housing Supply

Transitioning youth and newlywed housing supply from rental housing to 'Youth Sale Housing'

The government is recently expanding small-sized rental housing supply (17~37㎡) to provide housing for youth and newlyweds. Seoul City and Gyeonggi Province have recently proposed equity accumulation-type sale housing and Gyeonggi-type basic housing, which need to be considered as efforts to address youth housing issues.

However, in the case of 'equity accumulation-type housing,' there is a possibility of increased debt for the public institution as the project implementer, and similar disputes to those over the sale conversion price of existing '10-year rental apartments' may arise during sale conversion or resale. ('Pangyo 10-year public rental, large-scale lawsuit against LH...', 'Bogeumjari residents facing eviction'...)

Seoul City's 2030 Station Area Youth Housing (80,000 units) also eventually converts to sale after an 8-year rental period, allowing only private developers to benefit from zoning upgrades, while youth and newlyweds who rented must leave due to lack of assets, according to Seocho-gu's assessment.

Moreover, affordable sale housing in the past served as a foundation for asset accumulation and a tool for planning future life for older generations, but for today's youth, it is perceived as an insurmountable 'wall' with prices requiring 25 years of income saved without spending.

Youth who can get help resort to 'Yeongkkeul loans' (loans that gather even their soul) and participate in panic buying, but most youth and newlyweds find home purchase practically impossible, resulting in the emergence of terms like 'I-saeng-jip-mang' (failed to buy a house in this life), 'Cheong-po-ja' (those who gave up on subscription), and 'Ju-po-ja' (those who gave up on home purchase).

For these reasons, there is a need to re-examine the diagnosis and prescription of recent real estate policies from the beginning. It is essential to fundamentally resolve the relative deprivation felt by youth who believe they will never own a lifelong home.

Seocho-gu stated, "While we agree with the government's and Seoul City's policies to expand housing supply in the metropolitan area, both the government and Seoul City need a paradigm shift toward a more progressive approach in housing supply methods," proposing a more integrated and sustainable housing supply plan.

Practically, it proposes expanding the supply of sustainable and affordable sale housing rather than rental housing for youth and newlyweds, supplying about 20% public rental housing like station area youth housing, and 80% youth sale housing at 70~80% of market price.

Providing 'affordable sale housing' instead of rental housing can serve as a ladder for youth and newlyweds to accumulate assets and move into the middle class.

It is expected to convert the marginalized 30s and 40s generations, who have given up on home purchase, into actual demanders by offering youth sale housing opportunities instead of youth rental housing.

Additionally, in Seocho-gu's Umyeon 2 District, Seocho Bogeumjari, and Naegok Public Housing District, 59m2 (25-pyeong) units were sold for 300 to 350 million KRW but currently trade at about 1.1 billion KRW, more than 3 to 4 times the sale price, raising concerns about unearned income from affordable sale housing.

To prevent such 'lottery sales,' it is considered possible to examine measures such as using a profit-sharing mortgage system to recover part of the price difference generated according to residence period and number of children when selling the house.

Parking lot site total 500 households (100 rental households, 400 sale households)

3. Seocho-gu's Alternative Plan for the Korea Educational Development Institute Site

? Rezoning of parking lot site: from first general residential area to quasi-residential area (floor area ratio 400%)

- 98 senior housing units and 246 Happy Housing units → 100 rental units, 400 youth sale housing units

- Affordable housing sale to youth and newlyweds (70~80% of market price) ※ 30-year repayment using housing mortgage

? Gradual restoration of damaged greenbelt

? Additional supply expansion by upgrading zoning (quasi-residential 400%) of nearby Umyeon housing district reconstruction complexes

As a specific implementation plan, it proposes a bold rezoning of the developable parking lot site within the Korea Educational Development Institute site in Umyeon-dong from the second general residential area to a quasi-residential area (floor area ratio 400%) to sell affordably (70~80% of market price) to youth and newlyweds,

and for youth and newlywed sale housing, if young generations prepay 20~30% of the sale price to reduce initial burden, ownership is transferred, and the remaining amount is repaid over 30 years using a low-interest housing mortgage.

As part of public contribution, the public can gradually restore the greenbelt it damaged, and by rezoning the parking lot site, the supply can be expanded from the original 344 units to 500 units, achieving both restoration of the damaged development-restricted area and expansion of housing supply.

Additionally, if more housing supply is needed, it is possible to expand supply by upgrading the zoning (quasi-residential 400%) of reconstruction complexes such as the nearby Umyeon housing district (current floor area ratio 216%, 15 floors, reconstruction due in 2025).

4. Future Plans and Seocho-gu's Position

Seocho-gu Mayor Cho Eun-hee stated, "Since the government is firmly committed to preserving development-restricted areas, it is desirable to restore the development-restricted area part of the Korea Educational Development Institute site, which has been damaged and used by the public for a long time," adding, "If immediate restoration is difficult, it is reasonable to use it as infrastructure for local residents and gradually restore it."

□ Mayor Cho further emphasized, "It is necessary to supply many affordable youth sale housing units for youth and newlyweds so that young people can become homeowners rather than tenants," and "We hope this becomes a new policy alternative that allows young people to stop wandering as housing nomads and become hopeful future generations."

□ Seocho-gu announced that if Seoul Housing and Communities Corporation reapplies for a land transaction permit in a direction to restore the Korea Educational Development Institute site (so-called 'Graybelt'), it plans to process it positively.

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