Oh Se-hoon to Greatly Ease Redevelopment... "Simplify Requirements, Shorten Duration" (Comprehensive)

Complete Abolition of Residential Maintenance Index System
Resident Consent Procedure Reduced from 3 Steps to 2 Steps
Time Required for Maintenance Plan Establishment Reduced from 5 Years to 2 Years

[Image source=Yonhap News]

[Asia Economy Reporters Kim Hyemin and Lim 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 period for designating maintenance zones. Through this, the plan is to newly discover more than 25 maintenance zones annually and supply 130,000 housing units by 2025.

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

Seoul City is starting deregulation with redevelopment rather than reconstruction projects because redevelopment is less likely to stimulate housing prices. 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 per year 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 significantly lowering the stringent zone designation requirements and improving the problem that the complex four-step procedure takes an average of more than five years to designate a zone.

◆Complete Abolition of the Residential Maintenance Index System... 50% of Aged Low-rise Areas Meet Redevelopment Requirements

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 legal requirements such as two-thirds or more of the buildings being aged and a zone area of 10,000㎡ are met. Currently, only 14% of aged low-rise residential areas needing redevelopment meet the Residential Maintenance Index system, but relaxing the criteria to legal requirements increases this to 50%.

◆Resident Consent Procedure Simplified from 3 Steps to 2 Steps... Resident Proposal Consent Rate Raised to 30%

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 maintenance zone designation. However, the resident consent at the preliminary feasibility study stage will be abolished. Instead, the consent rate at the resident proposal stage will be strengthened from the existing 10% to 30% to minimize indiscriminate designation applications.

◆Introduction of Public Planning to Shorten the Period for Establishing Maintenance Plans from 5 Years to 2 Years

Seoul City will 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 zone plan establishment, and maintenance plan establishment. Previously, since residents proposed and autonomous districts established the plans, 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.

◆New Designation of Redevelopment Zones in Areas Where Redevelopment Was Cancelled Due to Severe Aging

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

◆Relaxation of 7-Story Height Limit in Type 2 General Residential Areas, Annual Discovery of New Zones

Additionally, the 7-story height limit regulation in Type 2 General Residential Areas will be abolished to ease floor area ratio and maximum height restrictions. From the second half of this year, Seoul City will promote redevelopment zone contests annually to discover 25 new maintenance zones each year. To implement these 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."

In a Q&A session after the announcement, regarding concerns that Seoul City's redevelopment deregulation might shrink public redevelopment, Mayor Oh explained, "Public redevelopment and private redevelopment will complement and compete with each other and will be chosen according to the characteristics of each zone."

The relaxation of the 7-story regulation in Type 2 General Residential Areas requires an ordinance amendment by the Seoul Metropolitan Council and cannot be done unilaterally by the mayor. Regarding this, Mayor Oh said, "This regulation has been a major obstacle to new housing supply," adding, "Since we communicated with the city council before the announcement, although there may be pros and cons, a consensus is expected to be smoothly formed."

In response to criticism that measures to revitalize reconstruction after designating new land transaction permission zones are insufficient, Mayor Oh said, "We need to prevent real estate price increases caused by reconstruction projects, so there may be some adjustment in pace," and added, "We will discuss additional stabilization measures with the Ministry of Land, Infrastructure and Transport and announce them."

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