[Exclusive] Government Also Considering Revitalization of Private Maintenance Projects... "Surveying Status of 2,000 Sites Nationwide"

Investigation of Nationwide Maintenance Project Status Previously Incomplete
Includes Not Only Ongoing Areas but Also Deregulated Zones
"Investigation Deemed Necessary Due to Market Importance"
Considering Expansion of Housing Supply Through Private Maintenance
However, Resistance Persists Within Government and Party... No Regulatory Easing Expected

A view of the apartment complexes in the Gangnam area from the Lotte World Tower Sky Observatory in Songpa-gu, Seoul. Photo by Dongju Yoon doso7@

[Asia Economy Reporter Moon Jiwon] The government is set to conduct a detailed survey on the progress of redevelopment and reconstruction projects at over 2,000 private sites nationwide. Considering that the management of redevelopment and reconstruction project progress has so far been conducted only formally at the local government level, this move is somewhat unusual. Alongside this, the government has also planned to explore measures to expand housing supply by revitalizing private maintenance projects.

Since the government has so far focused mainly on public-led redevelopment and reconstruction activation rather than private projects, there is growing expectation that this survey could open up opportunities for private projects in the future. However, there is still strong resistance within the ruling party and government toward private development, and with ongoing public development projects failing to deliver results, it is analyzed that the likelihood of immediate deregulation of private projects is low.

According to the Ministry of Land, Infrastructure and Transport and the Korea Real Estate Board on the 2nd, the government recently decided to review measures to revitalize private maintenance projects nationwide to expand housing supply. To this end, the government plans to first secure the current progress status of about 2,000 ongoing projects nationwide. According to the Urban and Residential Environment Improvement Act, each local government is required to periodically assess the status of maintenance projects and submit it to the Ministry of Land, Infrastructure and Transport, but there have been many criticisms that the data is insufficient, including some areas where projects have been halted.

An official from the Korea Real Estate Board explained, "Until now, the collection of status for over 2,000 districts relied solely on local governments, so the reliability was quite low," adding, "Since accurate status is essential to review housing supply expansion, this survey aims to supplement that." In particular, this update will also verify districts where projects have been canceled or suspended, in addition to those currently underway.

For example, if a project received implementation approval in January 2017 but failed to obtain management disposition approval for four years, it would remain recorded as of 2017 on paper, but the actual association might be working toward the next step or might have abandoned the project due to lack of feasibility. The government’s plan is to grasp such statuses to create more detailed ‘private maintenance project statistics.’

Alongside this, the government will also work on institutional improvements to shorten the required periods for major reconstruction, redevelopment, and small-scale reconstruction projects. It is known that the government already conducted a preliminary investigation last year into the reasons and issues behind the stagnation of maintenance projects in key districts. A government official explained, "There was a consensus to secure data in preparation for actual legal or institutional improvements in the future."

The government’s move to conduct such research is interpreted as an intention to verify how much volume can be secured through private maintenance projects. Although the government shifted its policy line earlier this year toward significantly increasing supply, there have been many criticisms that the effect is diminished because most of the volume is concentrated only in ‘public’ projects.

In this regard, Minister of Land, Infrastructure and Transport Noh Hyung-wook emphasized the coexistence of private and public sectors at his first policy meeting after taking office last month, stating, "In areas where profitability is poor and interests are complex, the public sector should take the lead, while in areas with sufficient profitability and strong will, the private sector should be the main supplier of housing."

However, the possibility that the ruling party and government will immediately ease regulations on private maintenance projects to increase supply through a ‘two-track’ approach is low. The Democratic Party’s Real Estate Special Committee, while announcing supply expansion measures at the end of last month, did not include deregulation of private maintenance projects. Above all, it is analyzed that it is difficult to shift direction toward the private sector when even the actively promoted public redevelopment, reconstruction, and urban public housing complex projects have yet to produce proper results.

A Ministry of Land, Infrastructure and Transport official said, "If this survey identifies what is not working well in private redevelopment and reconstruction, we can improve private sector regulations," adding, "It can also be used to promote institutional improvements to prevent problems found in private projects from occurring in public projects."

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