Public Reconstruction Allows 50 Floors... 132,000 New Housing Units Supplied in the Seoul Metropolitan Area (Comprehensive)

Government Announces 'Housing Supply Expansion Plan'
Development of Idle Sites Including Taereung Golf Course, Yongsan Camp Kim, Seoul Procurement Office, and National Diplomatic Academy

Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki is announcing plans to expand housing supply in the Seoul metropolitan area, including the Seoul region, at the Government Complex Seoul in Jongno-gu, Seoul, on the 4th. Photo by Kang Jin-hyung aymsdream@

[Asia Economy Reporters Kwangho Lee, Hyunjung Kim, Sehee Jang] The government is introducing a public reconstruction system as part of expanding supply to stabilize the real estate market and will significantly relax floor area ratio and height restrictions for reconstruction apartments in Seoul. Alongside this, land development will be pursued, including the site of the Taereung Golf Course in Nowon-gu, Seoul, aiming to supply a total of 132,000 new housing units. Since there are limits to the supply scale that can be secured solely through land development in high-demand prime locations, high-density development will be permitted, and some demand will be dispersed to the metropolitan area. However, there are concerns about how much the market will respond to high-density reconstruction based on public interest conditions such as donation of housing units.

Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, held a government joint briefing after the inter-ministerial task force (TF) meeting on housing supply expansion on the 4th, announcing a 'Housing Supply Expansion Plan' to supply a total of '262,000 housing units + α' mainly in the Seoul area. This includes 132,000 new supply units + α, 60,000 units for early pre-sale accelerated from scheduled public sale, and 70,000 units already announced in the 5th and 6th measures.

First, the government will introduce 'public participation high-density reconstruction' to supply a total of 50,000 units over the next five years. Public institutions such as the Korea Land and Housing Corporation (LH) will participate, and under the condition of donating some housing units, the floor area ratio will be increased up to 500%, and the height restriction, previously capped at 35 floors, will be relaxed to 50 floors. However, the price ceiling system will still apply to public reconstruction. 50-70% of the increased floor area ratio must be donated, and more than 90% of the expected profits from the increased floor area ratio will be recovered based on the expected rate of return.

Public idle lands, including the military golf course Taereung Golf Course, the Seoul Regional Public Procurement Service in Seocho-gu, and the Seoul Regional Headquarters of the Korea Land and Housing Corporation (LH) in Gangnam-gu, will be developed as public land to supply 33,000 units. The supply scale of the Yongsan Maintenance Depot in Seoul, previously announced as 80,000 units, will be increased to 10,000 units, and an additional 4,000 housing units will be supplied through high-density development in project sites planned for complex development. The pre-sale volume for the 3rd new town and others, initially planned at around 30,000 units, will be doubled to 60,000 units.

Along with this, the government plans to promote the confirmed measures through land acquisition and development, as well as amendments to the Urban and Residential Environment Improvement Act, and will hold weekly meetings of related ministers to monitor the real estate market and respond to disruptive and unstable factors.

Seoul Gangnam Apartment Area (Photo by Yonhap News)

Deputy Prime Minister Hong said, "To ensure absolute stability in the real estate market, we will monitor market trends daily and respond swiftly as needed," emphasizing, "We will make more determined efforts than ever to root out market disruption activities." He added, "To prevent price increases in nearby housing due to reconstruction, if necessary, we will designate land transaction permission zones and conduct joint real price investigations with related ministries to thoroughly manage market instability factors in advance."

However, experts believe that the scale of redevelopment projects may fall short of government expectations due to insufficient incentives. Jihae Yoon, Senior Researcher at Real Estate 114, said, "Redevelopment and reconstruction projects will not yield the quantities the government expects unless clear incentives are provided to the association members," adding, "Some relaxation of regulations such as the two-year minimum residence requirement for association members is also necessary for smooth supply."

Professor Tae-yoon Sung of Yonsei University's Department of Economics also pointed out, "Even if the floor area ratio is actually increased, incentives for association members, such as excess profit recovery, should be provided."

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