[Exclusive] Transition Committee to Focus on Seoul City's 'Relaxation of Reconstruction Regulations'

Yoon Proposes 'Real Estate Normalization,' Utilizes Housing Policies Like Rapid Integration Planning... Discussions on Easing Safety Inspections and Re-Charge Tax

[Asia Economy Reporter Baek Kyunghwan] The Presidential Transition Committee (PTC) is seeking a breakthrough in housing supply through Seoul City's policy to ease reconstruction regulations. As the first step toward the 'real estate normalization' pledged by President-elect Yoon Seok-yeol, the committee plans to preemptively convey to the market a policy stance of deregulation and supply expansion by utilizing Seoul City's housing policies, such as the rapid integrated planning for redevelopment projects. Discussions on easing real estate market regulations within the PTC, focusing on reconstruction, are also expected to intensify. President-elect Yoon has announced plans to rationalize the standards for detailed safety inspections and ease the reconstruction excess profit levy.

A key official from the PTC stated on the 21st, "Since Seoul City has been pursuing deregulation and supply policies simultaneously, we plan to review the outcomes and additional plans," adding, "In this process, we will closely examine policies that can support the President-elect's pledges." After reviewing the current government's reconstruction regulations during this week's work briefing, the committee may proceed to establish supply plans based on Seoul City's deregulation policies.

The most notable focus within the PTC currently is the easing of reconstruction regulations. In particular, one of President-elect Yoon's core deregulation pledges, the 'rapid integrated planning,' is expected to shorten the review period during redevelopment projects, thereby increasing not only the speed of supply but also the quantity supplied within the timeframe. Moreover, rapid integrated planning is a key housing policy of Seoul Mayor Oh Se-hoon. It involves conducting urban, architectural, and landscape reviews all at once during the project implementation approval stage, introducing integrated reviews to minimize the period from review to actual supply.

The overall coordination is also led by Kim Seong-bo, Director of Seoul City's Housing Policy Office, who is participating in the PTC. Director Kim announced rapid integrated planning as a priority during Seoul City's early-year work briefing. Internal documents prepared by Seoul City reportedly include the statement, "The promotion of rapid integrated planning for customized reconstruction projects will strengthen the foundation for supplying high-quality housing."

The PTC may also receive reports on the work processes of Seoul City's Housing Policy Office. Previously, Mayor Oh elevated the existing Housing Construction Headquarters to the Housing Policy Office to accelerate housing supply in urban areas and transferred the function of establishing apartment district unit plans, previously under the Urban Planning Bureau, to the Housing Policy Office, igniting efforts to expand housing supply through revitalizing reconstruction. This will serve as a reference for future restructuring of the Ministry of Land, Infrastructure and Transport (MOLIT) and other housing supply authorities. MOLIT is also aware of the complexities in permits and approvals during redevelopment projects.

Starting with easing reconstruction regulations, additional discussions are expected on rationalizing detailed safety inspection standards, easing the reconstruction excess profit levy, and establishing operational standards for donation and surrender, all key pledges of President-elect Yoon.

Previously, President-elect Yoon promised to exempt apartments over 30 years old from detailed safety inspections. Reconstruction safety inspections proceed in stages: preliminary safety inspection, first and second detailed safety inspections. Typically, reconstruction complexes have faced difficulties at the high-threshold detailed safety inspection stage. The evaluation criteria will be adjusted to reflect realism: the current 50% weighting for structural safety will be reduced to 30%, facility aging will be increased from 25% to 30%, and residential environment from 15% to 30%. The current government raised the structural safety weighting from 20% to 50% to curb the rapid rise in the reconstruction market.

The easing of the reconstruction excess profit recovery system was also promised. Detailed adjustment plans were disclosed, including raising the threshold amount for levy imposition, lowering the levy rate, expanding recognized cost items, providing exemptions for long-term single-homeowners, and allowing deferred levy payments. However, full easing requires legislative amendments, which is a variable. Cooperation from the major opposition party is essential, so at the PTC stage, discussions will likely focus first on parts that can be adjusted without legal amendments, such as raising the levy threshold or lowering the levy rate.

Additionally, measures to revise the price ceiling system, known as a major obstacle in the reconstruction market, will be established. The price ceiling system has been expanded to private land, affecting apartment supply shortages. President-elect Yoon plans to rationalize the operation of price regulation by changing the calculation methods for land costs, construction costs, and additional costs.

If the PTC's Economic Subcommittee 2 undertakes discussions to strengthen the supply base in demand-concentrated areas like Seoul alongside easing reconstruction regulations, financial regulation easing targeting demand groups will be reviewed by Economic Subcommittee 1. For example, the Ministry of Economy and Finance handles real estate taxation, while the Financial Services Commission manages loan issues. Accordingly, Economic Subcommittee 1, responsible for the Ministry of Economy and Finance and the Financial Services Commission, will review tax and financial issues and coordinate opinions with Economic Subcommittee 2.

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