Vibrancy of 'Mini Jaegunchaek' with Many Advantages

Rapid Expansion of Street Housing Redevelopment Projects in Aging Seoul Row Houses and Multi-family Homes
53 Project Applications This Year
Growing Interest from Major Construction Companies

[Asia Economy Reporter Donghyun Choi] The promotion of street housing maintenance projects, known as 'mini reconstruction,' is rapidly spreading, focusing on old row houses, multi-family houses, and small apartment complexes in Seoul. While traditional reconstruction has slowed due to strengthened safety inspections and the price ceiling system, various incentives and the advantage of faster project progress have highlighted the appeal of these projects, increasing interest from some major construction companies.

According to the maintenance industry on the 26th, Hyundai Construction recently participated in two consecutive site briefing sessions for the selection of contractors for the street housing maintenance project in Hapjeong-dong 447, Mapo-gu, Seoul. This project, with an area of only 5,777㎡, is a small-scale maintenance project consisting of two apartment buildings with 190 households, ranging from two basement floors to 15 floors above ground. The association plans to hold a board meeting and a general assembly soon to sign a construction contract with the company through a private contract. Hyundai Construction's participation in street housing maintenance projects is the second, following the Jangwi 11-2 district in Jangwi-dong, Seongbuk-gu, in April.

A street housing maintenance project is a small-scale maintenance project that groups old detached houses or villas and builds apartments. Unlike general reconstruction and redevelopment, which take an average of 8 years and 6 months to complete, street housing maintenance projects are exempt from designation as maintenance zones and safety inspections, allowing completion from association establishment to completion in about three years. There are no regulations on actual residence or excess profit recovery systems, and if a certain level of public rental housing is included, the price ceiling system is also exempted. This year, the maximum area was expanded from 10,000㎡ to 20,000㎡, and the maximum number of floors was raised to 15. For example, the Deungchon Sanan 1 and 2 complexes in Deungchon-dong, Gangseo-gu, which received association approval in March 2017, completed construction in May this year after 3 years and 2 months, transforming into the new apartment 'Deungchon Famille The Classic.' The sale price for a 48㎡ (exclusive area) unit was in the mid-40 million KRW range, but the current asking price has risen to 650 million KRW.

Due to these advantages, the number of districts promoting street housing maintenance projects in Seoul is increasing. According to Seoul City, 53 applications for this type of project have been submitted in Seoul up to the end of last month this year. Applications for street housing maintenance projects were only 16 each in 2017 and 2018 but surged to 51 last year, and this year has already surpassed last year's level. This year, districts such as 218-1 Jeongneung-dong in Seongbuk-gu and Deokhwa Row House in Sinwol-dong, Yangcheon-gu, have completed association establishment approval after applying for the project.

Small-scale complexes supplied through recent street housing maintenance projects are also recording high competition rates in subscription markets daily. 'Godeok Artes Misojium (formerly Byeoksan Villa)' in Godeok-dong, Gangdong-gu, recorded an average competition rate of 537 to 1 in the first priority subscription on the 21st, the highest ever in Seoul. Earlier, 'Seocho Xi Rene' in Seocho-dong, Seocho-gu, supplied through the Nakwon Cheonggwang Row House street housing maintenance project, had only 35 units for general sale but attracted 15,070 applicants in the first priority subscription.

'Small-scale reconstruction,' targeting apartment complexes with fewer than 200 households and having procedures similar to street housing maintenance projects, is also gaining popularity. Dangsan Hyundai 2nd Complex, a single building with 116 households located in Dangsan-dong 4-ga, Yeongdeungpo-gu, plans to hold an association establishment general meeting in mid-November to actively promote small-scale reconstruction. The resident consent rate has already exceeded 80%. Dangsan Samik, a 176-household apartment located in nearby Dangsan-dong 3-ga, plans to collect consent forms for association establishment for small-scale reconstruction by the end of this month and proceed quickly with project procedures. An industry official said, "In contrast to the delays caused by safety inspection barriers in old large complexes in Seoul recently, street housing maintenance projects and small-scale reconstruction are progressing rapidly with government support."

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