Seoul City, Needing 'Speed Supply', to Revitalize Small-Scale Reconstruction

Order for Service Related to Revitalization Measures for Small-Scale Reconstruction Projects
Identify Current Status and Problems to Develop Supply Expansion Plans
Enhance Project Feasibility by Eliminating Mandatory Public Contributions, etc.

Seoul Mayor Oh Se-hoon is attending the Cabinet meeting held at the Government Seoul Office on Sejong-daero, Jongno-gu, Seoul on the 25th, listening attentively to the opening remarks by Prime Minister Kim Boo-kyum. Photo by Kim Hyun-min kimhyun81@

[Asia Economy Reporter Onyu Lim] The Seoul Metropolitan Government is set to promote the activation of ‘small-scale reconstruction’ to expand housing supply. With the normalization of reconstruction, a key pledge of Mayor Oh Se-hoon, halted amid soaring housing prices, the plan is to increase supply through small-scale reconstruction without stimulating surrounding market prices.

According to the maintenance industry on the 2nd, Seoul recently commissioned a service project to ‘activate small-scale reconstruction projects and establish business models.’ This item was included in the supplementary budget announced in May after Mayor Oh’s inauguration.

Small-scale reconstruction refers to projects that reconstruct multi-family housing on a small scale in areas with good maintenance infrastructure. Eligible areas are those under 10,000㎡ in size, where two-thirds or more of the buildings are old or deteriorated, and where the number of existing housing units is less than 200.

Through this commissioned project, Seoul plans to grasp the current status of existing projects, analyze problems, and seek ways to expand supply by region. A Seoul city official explained, "Activation of small-scale reconstruction projects is necessary to improve the living environment in low-rise residential areas where the majority of low-income residents live."

Unlike general redevelopment or reconstruction, small-scale reconstruction omits safety inspections and maintenance zone designations and allows integrated review processes, making the project procedures simpler and enabling faster progress. However, due to reduced profitability caused by floor height restrictions, activation has been limited. Currently, there are 2,070 eligible sites for small-scale reconstruction in Seoul, but only 70 sites, about 3.4%, are actively being pursued.

The city’s focus on activating small-scale reconstruction policies appears to be because large-scale reconstruction in the Gangnam area could significantly stimulate housing prices. A maintenance project consulting industry official said, "Small-scale reconstruction is less likely to stimulate buying sentiment in surrounding areas compared to general reconstruction," adding, "Although small in scale, it can achieve both supply expansion and real estate price stabilization."

Seoul has previously established related work processing standards to enhance the profitability of small-scale reconstruction. For small-scale reconstruction, the city decided to upgrade the zoning from Type 2 General Residential Area, which is subject to a 7-story height limit without mandatory public contributions, to a higher zoning category. Kim Seong-bo, head of Seoul’s Housing and Architecture Headquarters, said, "We expect that the newly established project standards will activate small-scale reconstruction to improve the residential environment in low-rise residential areas and accelerate housing supply."

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