[Let's Run Again, Construction Korea] 'Public Reconstruction No.1' Starts... Accelerating Urban Housing Project Supply

Signing of Joint Project Implementation Agreement for Mangu 1 District
Public Redevelopment Projects Underway in 13 Locations Including 12 in Seoul and 1 in Gyeonggi
Urban Public Housing Complex Projects Also Accelerating

If public housing sites such as the 3rd New Towns are leading supply on the outskirts of Seoul, the public redevelopment projects promoted through the 2.4 Plan are making supply within the city center more visible. Public redevelopment projects are mainly pursued in three types: public redevelopment, public reconstruction, and urban public housing complex projects.

Among these, the fastest progressing project is public redevelopment. Korea Land and Housing Corporation (LH) is promoting public redevelopment projects in a total of 13 locations: 12 in Seoul and 1 in Gyeonggi Province. In particular, Sinseol 1 District has signed a project implementation agreement between LH and the residents' representative council. The project implementation agreement defines the roles and responsibilities between LH and the residents' representatives, sets standards for project compensation, management disposition plans, and other detailed matters regarding the overall project, meaning that the concrete project is now officially starting. Bongcheon 13 District has also completed the application for designation as a project implementer.

Among public reconstruction projects, Mangwoo 1 District signed a joint project implementation agreement on the 22nd, establishing a successful foundation as the ‘first public reconstruction project.’ Mangwoo 1 District is an apartment complex completed in 1983, making it 38 years old, and was difficult to reconstruct due to low profitability. Through public reconstruction, the zoning was upgraded from Type 2 General Residential Area to Type 3 General Residential Area, and by utilizing AI-based 3D design techniques, a solution was found to the long-standing issue of sunlight restrictions on the northern school side, enabling the project to succeed.

LH explains that the significance of the first project is great. Despite various incentives such as increased floor area ratio in public redevelopment projects, there were concerns that public intervention and expanded rental housing ratios would cause resident opposition, making projects difficult. However, LH expects these concerns to naturally disappear once the first project is fully underway. In particular, if the first project succeeds, it is anticipated that more areas, which have been stagnant for years due to lack of profitability and conflicts among residents, will join public redevelopment projects.

The urban public housing complex projects are also gradually gaining momentum. LH has completed the designation of planned districts for a total of eight locations (10,000 households), including Jeungsan 4 District, and is about to designate four more as official districts. After district designation, sales can be made through pre-sale within about a year and a half.

Analysis suggests that various incentives, project speed, and reasonable sale prices are the reasons for the popularity of public redevelopment projects. Compared to existing redevelopment projects, the standards for old and poor-quality buildings are lower, and there are many incentives such as zoning and floor area ratio increases and eased donation requirements. Also, while private redevelopment projects typically take 13 years from district designation to sale, urban complex projects can proceed quickly enough to allow sales about 2 years and 6 months after district designation by omitting procedures such as association establishment and management disposition. Sale prices are also reasonable. According to LH project briefing materials for Jeungsan 4 District, the general sale price for an 84㎡ unit is around 640 million to 750 million KRW, or 19 million to 22 million KRW per 3.3㎡. Residents’ household contributions are also reduced by an average of 120 million to 190 million KRW (50-70%) compared to private development.

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