Losses Are Inevitable... Public Reconstruction Projects Pulling Out

'Public' Maintenance Project Name Loses Meaning
Eunma, Jamsil Jugong 5, etc. Project Withdrawals
Only Small-Scale Complexes Likely to Be Selected

A view of Jugong 5 Complex, Jamsil-dong, Songpa-gu, Seoul

[Asia Economy Reporter Donghyun Choi] Unlike the booming atmosphere surrounding public redevelopment, public reconstruction has cooled down so much that the name of the same 'public' maintenance project seems ironic. Following the decision to withdraw from the projects at Eunma Apartment in Daechi-dong, Gangnam-gu, and Jugong 5 Complex in Jamsil-dong, Songpa-gu, which are major reconstruction sites in the Gangnam area, other complexes are also showing signs of pulling out one after another.

According to the maintenance industry on the 4th, the reconstruction association of Jugong 5 Complex in Jamsil-dong, Songpa-gu plans to withdraw its application if there is no response to the public reconstruction preliminary consulting results by the 6th. An association official said, "The Ministry of Land, Infrastructure and Transport and Korea Land and Housing Corporation (LH) informed us that it would be difficult to provide the analysis data by the 6th, when the originally scheduled one-month consulting period expires," adding, "If the data does not arrive by that day, we will officially withdraw the consulting application. We initially intended to just receive the consulting."

Eunma Apartment in Daechi-dong, Gangnam-gu has also effectively suspended its public reconstruction preliminary consulting. A representative of the Eunma reconstruction promotion committee said, "We verbally requested the Ministry of Land to stop the consulting last month," and added, "Since public reconstruction is impossible without the consent of the association members, we plan to gather the owners' opinions and officially decide to withdraw the application in writing or other formal ways."

The reason these complexes decided to withdraw even at the preliminary consulting stage, which is the feasibility analysis phase of the public reconstruction project, is due to strong opposition from residents. Recently, in Eunma and Jugong 5 Complex, groups opposing public reconstruction have taken collective actions such as pushing for the dismissal of the association chairman and distributing leaflets. Since public reconstruction requires the consent of more than two-thirds of the association members, the association's momentum for project promotion inevitably weakens if it fails to gain majority support.

The withdrawal atmosphere is spreading to other complexes as well. According to Lee Heun-seung, a member of the People Power Party, 15 reconstruction sites in Seoul (13,943 households) applied for public reconstruction preliminary consulting, which ended at the end of September. Among them, following Eunma and Jugong 5 Complex, Miju Apartment in Cheongnyangni-dong, Dongdaemun-gu, the third largest with 1,089 households, recently decided internally to withdraw from consulting and plans to officially notify the cancellation soon. In the case of Hangang Mansion in Ichon-dong, Yongsan-gu, it is known that they are currently completely denying the consulting application itself.

The government plans to select leading public reconstruction project sites within this month. However, as major projects continue to announce withdrawals, it is highly likely that only small complexes with fewer than 500 households will be selected as leading projects. The government previously announced that it would supply 50,000 households over the next five years through public reconstruction, but given the current trend, it seems difficult to achieve the target.

☞Public Reconstruction: A method where public entities such as Korea Land and Housing Corporation (LH) participate in the implementation, allowing the floor area ratio to be increased up to 500%, with 50-70% of the increased floor area ratio recovered through donation. More than half of the houses donated in public reconstruction are long-term public rental housing, and the rest can be allocated for public sale.

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