"Small but Fast"... 'Mini Reconstruction' Gains Momentum as Regulations Ease

134 Business Projects Underway in Seoul as of April... More Than Double Compared to June 2020
Transfer of Maintenance Project Association Membership Possible if Ownership for 5 Years and Actual Residence for 3 Years Conditions Met
Expansion Focused on Gangnam Area with Supply Shortage

Exterior view of a reconstruction complex of an apartment in Seoul (Photo by Yonhap News)

[Asia Economy Reporter Ryu Taemin] Recently, as reconstruction projects in Seoul have stalled due to regulations, the number of small-scale reconstruction projects known as "mini reconstruction," such as street housing maintenance projects and small-scale reconstruction, is increasing. Furthermore, starting from the 8th of next month, the floor limit regulations for street housing maintenance projects will be relaxed, and if the ownership requirement of 5 years and actual residence of 3 years are met, the status of maintenance project association members can be transferred, which is expected to boost popularity even more.

According to Seoul City on the 26th, as of April this year, there are 134 locations in the city pursuing street housing maintenance projects. This is a sharp increase compared to 63 locations as of June 2020 and 105 locations as of June last year.

The street housing maintenance project is a project that improves the residential environment by renovating old houses in small district units. Procedures such as safety inspections, designation of maintenance districts, and formation of promotion committees are omitted, making it simpler and shorter in duration than general reconstruction projects. Small-scale reconstruction typically takes about 3 to 4 years, roughly half the time of general reconstruction projects, which usually exceed 8 to 10 years.

By region, the projects are expanding mainly in the Gangnam area, where supply is insufficient. In the so-called Gangnam 4 districts?Gangnam, Seocho, Songpa, and Gangdong-gu?40 locations, accounting for 30% of the total, are pursuing street housing maintenance projects. Gangdong-gu has the most with 12 locations, followed by Songpa-gu (11 locations), Seocho-gu (9 locations), and Gangnam-gu (8 locations).

The active movement in street housing maintenance projects is attributed to the government's expanded incentives. The Ministry of Land, Infrastructure and Transport announced that the amendment to the Enforcement Decree of the Small-scale Housing Maintenance Act was approved at the Cabinet meeting on the 26th. This amendment set the criteria for allowing the transfer of association member status for one household, one house owners to 5 years of ownership and 3 years of residence. Additionally, the previous floor limit regulation of "15 floors or less" for street housing maintenance projects was removed, allowing local governments to autonomously set floor limits. The founding general meeting procedure for establishing associations was also specified to include appointing representatives with the consent of the majority of landowners and confirming association bylaws and appointing association executives and delegates at the founding general meeting.

Meanwhile, the Ministry of Land, Infrastructure and Transport expanded the possible implementation area for street housing maintenance projects from the previous 10,000㎡ to 20,000㎡ with the amendment to the Enforcement Decree and Enforcement Rules of the Act on Special Cases Concerning Vacant Houses and Small-scale Housing Maintenance in July last year. Song Seunghyun, CEO of Urban and Economy, forecasted, "With the resolution of previous drawbacks such as small project scale and floor restrictions, street housing maintenance projects are expected to become even more active."

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