Preferred by the Middle Class and Including Transit-Oriented Areas, but Resident Consent is 'Questionable'

Government Selects 16 Public Redevelopment 2nd Candidate Sites in Seoul

Stations Areas Including Bondong and Geumho23
Many High-Demand Downtown Areas Included
Total of 10,093 New Households to Be Supplied if Plans Proceed

Public Development Distrust and Private Redevelopment Expectations Remain Variables

[Asia Economy Reporters Kim Hyemin, Ryu Taemin] The government has selected 16 aging residential areas in Seoul as the second round of candidates for the public redevelopment project, drawing significant market attention. This comes just over two months after the first round of candidates was selected as an extension of the 8.4 measures announced last year. With this, the total number of public redevelopment candidate sites in Seoul has expanded to 24.

The government plans to provide incentives such as relaxed floor area ratios in these areas to supply a total of 13,152 new households. However, unforeseen variables have emerged, making the smooth progress of the project uncertain. The anti-public sentiment has grown due to the Korea Land and Housing Corporation (LH) land speculation scandal, and with increased expectations for private redevelopment following the Seoul mayoral by-election, the rate of resident consent is seen as a key variable.

◆ Where are the notable second-round candidate sites? = The newly selected candidate sites include ▲ Jangwi 8·9 in Seongbuk-gu ▲ Sinwol 7-dong-2 in Yangcheon-gu ▲ Seongbuk 1 in Seongbuk-gu ▲ Sanggye 3 in Nowon-gu ▲ Singil 1 in Yeongdeungpo-gu ▲ Geoyeo Saemaeul in Songpa-gu ▲ Jeonnong 9 in Dongdaemun-gu ▲ Yeonhui-dong 721-6, Hong Eun 1, Chungjeongno 1 in Seodaemun-gu ▲ Bondong in Dongjak-gu ▲ Geumho 23 in Seongdong-gu ▲ Junghwa 122 in Jungnang-gu ▲ Cheonho A1-1 in Gangdong-gu ▲ Sungin-dong 1169 in Jongno-gu, totaling 16 locations.

Most of these are large-scale aging residential areas over 50,000㎡ located near subway stations but still remaining within Seoul. Currently, these candidate sites have 10,109 households. The government estimates that if redevelopment proceeds as planned, the total number of households will expand to 20,202, an increase of 10,093 households. Including the first-round candidates, the total will be 24,965 households, with 13,152 new households supplied.

Experts are paying attention to the selection of central urban areas such as Singil 1 in Yeongdeungpo-gu, Bondong in Dongjak-gu, and Geumho 23 in Seongdong-gu. Park Wongab, Senior Real Estate Specialist at KB Kookmin Bank, said, "I expected only less profitable peripheral areas to be candidates, but many areas preferred by the middle class are also included. These are areas with high aging levels and strong demand for public redevelopment, so the projects could proceed more actively than expected."

The Geumho 23 district in Seongdong-gu (30,706㎡) is a prime piece of land near Geumho Station on Line 3. It was designated as a maintenance zone in 2010, and a promotion committee was established in 2011, but due to a sluggish sales market and distrust of the promotion body, conflicts persisted. The promotion committee was dissolved in 2013 with 50% resident consent, and the maintenance zone was lifted. There are 327 landowners, and if public redevelopment is completed as planned, the number of households will expand to 948. The Singil 1 district in Yeongdeungpo-gu (59,379㎡) is also located around Yeongdeungpo Station, a transportation hub, with about 90% of the area consisting of aging residential buildings. It is estimated that the number of households will increase from 552 to 1,510 after public redevelopment.

Geoyeo Saemaeul in Songpa-gu (63,995㎡), adjacent to Gangnam, is also noteworthy. Due to its location on hilly terrain, the floor area ratio limit was low, causing development delays due to lack of profitability. With the planned increase in floor area ratio, the number of households will expand from 691 to 1,329. Yoon Jihae, Senior Researcher at Real Estate 114, said, "The closer to Gangnam, the higher the profitability. Areas with convenient transportation like Cheonho in Gangdong-gu may be highly preferred from a residential perspective after development."

◆ Growing distrust in public projects amid expectations for private redevelopment... Resident consent remains uncertain = Resident consent is essential for speedy project progress, but it is expected to be difficult to achieve. While public redevelopment applications can be made with just 10% resident consent, actual project progress requires consent from more than two-thirds of landowners. Except for some areas with already high consent rates, it is difficult to accelerate the process.

Moreover, distrust in public-led projects has increased due to the LH employees' land speculation scandal, strengthening opposition voices within the districts. Since Seoul mayoral candidates are competing to promote private-led redevelopment methods, if private regulations are eased after the new mayor takes office, the appeal of public redevelopment may diminish.

Professor Seo Jin-hyung of Gyeongin Women's University said, "The first-round candidates have not even started projects yet, so I question whether redevelopment will proceed smoothly even with the designation of second-round candidates. The LH scandal has caused public institutions to lose trust, so it will be even more difficult." Senior Researcher Yoon Jihae added, "Areas delayed for a long time will inevitably be developed, but there may be temporary delays due to leadership changes. Like the first-round candidates, cooperative members may change their minds due to profitability issues, so resolving stakeholders' interests well is necessary to speed up the process."

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