'Box Office Hit' Public Redevelopment Closing D-day... "About 40 Sites Expected to Apply"

Application Rush in Yeonhui 2-dong, Sinwol 7-dong Before 5 PM Deadline on the 4th
Bold Incentives Like Floor Area Ratio Increase Offered
SH Corporation's 'Seoul-style Public Redevelopment' Gains Buzz in Cheonho 1 District

A view of Yeonhui 2-dong, Seodaemun-gu, Seoul, which applied for the public redevelopment pilot project competition

[Asia Economy Reporter Onyu Lim] About 40 redevelopment sites are expected to apply for the government’s 'Public Redevelopment' pilot project, which closes its application on the 4th. With exceptional benefits such as increased floor area ratio and exemption from the price ceiling system, residents of aging residential areas, where redevelopment projects had been stagnant, are showing strong willingness to participate. In particular, the success story of Seoul Housing and Communities Corporation (SH) with the Seoul-type public redevelopment of 'Cheonho 1 District' has spread by word of mouth, leading to a surge in applications from previously deregulated areas.

◆Unexpected Popularity... Around 40 Sites Expected= According to the Seoul Metropolitan Government and the redevelopment industry on the 4th, just before the application deadline for the public redevelopment pilot project sites in the afternoon, Yeonhui 2-dong in Seodaemun-gu was confirmed to have submitted an additional application. Yeonhui 2-dong, with a total of 700 households, is an area where old houses are densely clustered on hilly terrain but was deregulated from the housing reconstruction maintenance zone in 2015. A representative of the Yeonhui-dong Residents’ Promotion Group said, "Yeonhui-dong is famous as a single-family housing area where former President Chun Doo-hwan lives, but right next door, the traditional-style toilets are about 50 years old and very dilapidated," adding, "The residents’ consent rate is as high as 40%, showing strong determination for public redevelopment."

Additional applications were also reportedly submitted from Sinwol 7-dong in Yangcheon-gu and Jangwi 12 District in Seongbuk-gu ahead of the application deadline. Accordingly, about 10 sites, including Hannam 1 District in Yongsan-gu, Jangwi 9 District in Seongbuk-gu, and Heukseok 2 District in Dongjak-gu, have officially submitted applications for the public redevelopment pilot project. Especially, since a total of 31 sites submitted preliminary intention letters by the 2nd, the final number of applications is expected to be around 40. A Seoul city official explained, "Many places have already exceeded the 10% resident consent rate required for application, but many are trying to increase the numbers until the last minute to submit their applications."

◆SH Corporation’s Success Story Is the Main Driver of Popularity= Public redevelopment is a redevelopment project promoted with the participation of public entities such as the Seoul Housing and Communities Corporation (SH Corporation). Incentives include increased floor area ratio, simplified approval procedures, and exemption from the price ceiling system. Initially, public redevelopment did not attract much attention due to concerns about increased rental housing, quality degradation, and worsening project profitability.

The atmosphere changed dramatically after SH Corporation’s active promotion and the success of the 'Seoul-type public redevelopment' in Cheonho 1 District, Gangdong-gu, spread by word of mouth. Although the Cheonho 1 District project was not officially conducted under the name of public redevelopment, SH Corporation participated as a co-developer at the request of the association. The construction was handled by the private construction company Jungheung Construction. The project implementation method is very similar to public redevelopment.

This district was designated as a New Town area in 2003 but took a full 12 years to receive project implementation approval in 2015 due to various conflicts of interest and low project feasibility. However, after SH Corporation joined as a co-developer in 2016, the project rapidly progressed. The construction contract was signed in 2017, and the management disposition plan was approved last year. This district completed relocation and general sales this year and started construction in September. Kim Jong-kwang, chairman of the Cheonho 1 District association, said, "With SH Corporation’s joint participation, the power imbalance between the construction company and the association was broken," adding, "Not only did we reduce project costs through reasonable pricing, but we also received great help in construction management and design, which the association could not handle on its own."

An SH Corporation official said, "We plan to actively utilize the success know-how of Cheonho 1 District in future public redevelopment sites to contribute to project success."

However, there are also concerns that expanding related professional personnel is urgent for the success of public redevelopment. SH Corporation is currently pushing to expand its workforce by 199 people and reorganize its structure to exclusively handle public redevelopment and public reconstruction projects, but plans have been disrupted due to the change in Seoul’s mayoral authority to Acting Mayor Seo Jeong-hyeop. An SH Corporation official said, "Securing new personnel is essential to expand housing supply in Seoul," adding, "We cannot stop public redevelopment work until the Seoul mayoral by-election in April next year."

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