Finally Selected Redevelopment Key... Will Seoul Downtown Supply Ignite? [2022 Real Estate One Pick]

<1> Redevelopment - Sintong Planning Sanggye 5-dong

Villa-dense area in downtown Seoul

The aging residential area around Sanggye 5-dong in Nowon-gu, near Danggogae Station on Seoul Subway Line 4, has recently become the most notable redevelopment site. This area is the largest among the 21 rapid integrated planning (Shintong Planning) redevelopment candidates selected by the Seoul Metropolitan Government through a public contest at the end of last year. Covering a total area of 190,000㎡, this district is expected by experts to serve as a litmus test for the success of Shintong Planning.

Shintong Planning is a system created by the Seoul Metropolitan Government with the aim of removing the major obstacles that have hindered urban housing supply through redevelopment projects. The core is the abolition of the ‘Residential Maintenance Index System.’ Even if a project area meets the legal requirements such as aging level and resident consent rate, the city separately scores four items: △resident consent rate (40 points) △aging level (30 points) △road extension rate (15 points) △household density (15 points). If the total Residential Maintenance Index score is below 70 points, the project application is not allowed. Along with this, Shintong Planning simplifies related procedures to shorten the project period from the previous 10 years or more to 3?5 years.

The market response to Shintong Planning redevelopment has been enthusiastic. As many as 102 sites applied for this Shintong Planning redevelopment contest. In contrast, the government’s public redevelopment, despite having a resident consent rate of only 10%, received only 70 applications over the past year. Shintong Planning, with a consent rate criterion of 30%, is attracting even greater interest.

However, the market evaluates that there are still many hurdles to overcome even in the selection of redevelopment candidates in the Sanggye 5-dong area. This is because, fundamentally, it is a private development and thus faces the same issues as existing redevelopment projects.

Most redevelopment candidates are areas that have had demand for development projects such as past New Town projects. Due to the influx of investors, ownership shares are often complicated. Some residents are also pursuing existing projects such as street housing projects. It is reported that some residents in Sanggye 5-dong who are promoting street housing projects are requesting district separation. Problems may arise in the future during the process of coordinating incentives and securing resident consent rates for establishing associations. If the large-scale Sanggye 5-dong project overcomes these chronic challenges and proceeds smoothly, it is expected to influence other areas and give more momentum to redevelopment projects.

Ko Jun-seok, an adjunct professor at Dongguk University Law School, said, "The removal of the key restrictive regulations that blocked redevelopment has undoubtedly raised expectations for redevelopment projects more than ever before. If resident persuasion proceeds smoothly, the supply signal will become clearer, and it is expected to play a role in stabilizing housing prices in the future."

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