"Eliminate Residential Maintenance Index System to Supply 26,000 Households Annually"… Oh Se-hoon to Start with Redevelopment (Update)

Seoul Mayor Oh Se-hoon Announces Redevelopment Revitalization Plan
Focus on Easing Criteria and Procedures for Designating Maintenance Zones

[Image source=Yonhap News]

[Asia Economy Reporters Kim Hyemin and Im Onyu] Seoul Mayor Oh Se-hoon proposed his first policy to expand housing supply in Seoul just 49 days after taking office. The key points include abolishing the Residential Maintenance Index system, which had been an obstacle to designating redevelopment zones, and significantly shortening the designation period for maintenance zones. Through this, the plan is to newly identify more than 25 maintenance zones annually and supply 130,000 housing units by 2025.

On the 26th, Mayor Oh announced the "Redevelopment Activation Plan" containing these details. This is the first time since his inauguration that Mayor Oh has presented specific deregulation measures related to housing supply.

Seoul City is starting deregulation with redevelopment because it is less likely to stimulate housing prices compared to reconstruction projects. A Seoul city official explained, "There is concern that the number of move-in units will sharply decrease to an average of 4,000 units annually after 2026," adding, "We decided to prioritize housing supply through redevelopment projects, which also have the effect of improving poor residential environments."

This deregulation measure is interpreted as a willingness to resume the designation of redevelopment zones, which had been suspended for six years since 2015. The focus is on drastically lowering the stringent zone designation requirements and improving the problem of the complex four-step procedure that takes an average of more than five years to designate a zone.

First, the Residential Maintenance Index system will be abolished. This system scores factors such as resident consent rate, aging ratio, road extension rate, and household density to decide whether to designate a redevelopment zone. Mayor Oh abolished this system and allowed redevelopment zone designation if only the legal requirements, such as two-thirds or more of buildings being aged and a zone area of 10,000㎡, are met. Currently, only 14% of old low-rise residential areas needing redevelopment meet the Residential Maintenance Index system, but relaxing the criteria to legal requirements will increase this to 50%.

The resident consent procedure will also be simplified. Currently, to designate a maintenance zone, resident consent must be met in three stages: resident proposal, preliminary feasibility study, and zone designation. The plan is to abolish resident consent at the preliminary feasibility study stage. However, the consent rate at the resident proposal stage will be strengthened from the existing 10% to 30% to minimize indiscriminate designation applications.

Seoul City will also introduce a "public planning" system led by the city. To be designated as a maintenance zone, the process must go through a preliminary feasibility study, basic living area plan establishment, and maintenance plan establishment. Previously, since residents proposed and autonomous districts planned, it usually took five years. Seoul City plans to take full responsibility for this process and effectively integrate and abolish the preliminary feasibility study to shorten the period to two years.

Seoul City will also newly designate areas that were deregulated from redevelopment maintenance zones, considering aging and resident consensus. According to the city's survey, there are a total of 316 deregulated low-rise residential areas, and about 170 of them, or 54%, are judged to require housing maintenance.

Additionally, the 7-story height restriction regulation in the Category 2 General Residential Area will be abolished to relax floor area ratio and maximum height regulations. Starting from the second half of this year, Seoul City will promote annual redevelopment zone contests to discover 25 new maintenance zones each year. To implement the deregulation measures, the city plans to revise the "Basic Plan for Urban and Residential Environment Maintenance" by October.

Mayor Oh said, "We will make up for the decreased housing supply opportunities over the past 10 years," adding, "At the same time, we plan to use all possible methods to block speculative forces, such as fundamentally preventing share splitting through multi-family new construction and restricting building permits."

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