"Three Moves Due to Construction Delays"... Original Residents Suffer Amid Redevelopment Setbacks

Accident During Hakdong 4 District Demolition and Construction Cost Disputes
Groundbreaking Delayed Over Three Years; Internal Conflict Remains
Most Association Members Are Elderly With No Source of Income

A view of the housing redevelopment maintenance project in Hakdong 4 District, Dong-gu, Gwangju. Photo by Min Chanki

Due to a building collapse accident and disputes over construction costs, the Hakdong 4 District housing redevelopment maintenance project in Dong-gu, Gwangju has been delayed by several years compared to the original schedule, increasing the burden on displaced original residents. Most union members are elderly, wandering without a stable source of income and facing severe financial hardship.

According to the Hakdong 4 District Housing Redevelopment Maintenance Project Union on September 24, the total number of households in this redevelopment project is 2,299. Of these, about 660 are union members (approximately 330 households are original residents), and the rest are general pre-sale right holders.

The Hakdong 4 District redevelopment project was originally scheduled to begin construction in the first half of 2022. However, a disaster occurred during the demolition process (nine deaths and eight injuries), causing demolition work to be suspended for one year and five months before resuming. During this period, issues such as illegal subcontracting, lobbying allegations, poor construction methods, and misconduct by the union president emerged, further contributing to the project’s delay.

Additionally, in June 2022, the construction company HDC Hyundai Development Company (Hyunsan) proposed 14 benefits to the union, including a construction cost of 5.08 million won per pyeong, claiming it would fulfill its social responsibility and maintain construction rights. However, in September last year, the company suddenly demanded 6.98 million won per pyeong, citing rising raw material and labor costs. As a result, the union and Hyunsan negotiated construction costs for ten months, and after a general meeting to discuss the proposed increase, the groundbreaking was postponed by about three years compared to the original schedule.

The groundbreaking has not yet been finalized. Within the union, there are divided opinions, with some members claiming that the construction costs have been excessively increased. The groundbreaking is expected to take place within this year only if the management plan amendment is approved at the general meeting next month.

As the project is delayed, the burden is directly passed on to the original residents. When the management plan was first approved in 2018, the initial pre-sale price for union members was in the 9.3 million won range per pyeong, but with rising construction and project costs, the current average has increased to about 12.2 million won per pyeong.

For those who had lived or run businesses in Hakdong 4 District for decades, the longer the project is delayed, the greater the burden of relocation and living expenses. Moreover, most union members are elderly people in their 70s and 80s or older, with virtually no income sources.

In fact, union member A has moved three times since 2019, spending 44 million won solely on moving costs. A had lived in Hakdong 4 District since the 1990s, expecting to return, so rented a place, but in 2023 took out a loan and purchased another house.

A said, "I am spending about 1 million won per month just on interest after taking out a loan to buy a house," and added, "The union should not only focus on construction costs and pre-sale prices but also recognize the increased damage to members caused by prolonged relocation."

There are also claims of losses due to being unable to run personal businesses. B (age 75), who had operated a self-service car wash in Hakdong 4 District since the 1990s, tried to open a new business elsewhere because of the redevelopment project, but the relocation compensation was far too insufficient. B ended up just buying land, which has been left unused for years. B claims that after being forced out for redevelopment, only about one-third of the appraised value was received, making it impossible to start a new business elsewhere.

B’s only source of income, as an elderly person, is a senior job program run by the local government. B said, "If the redevelopment project is completed, I planned to sell my pre-sale rights and use the lump sum to open a car wash on the land I purchased," and added, "But as the project is delayed, the land bought with a loan sits idle. I am just paying interest on the loan and using up my relocation compensation."

Another union member, C, in their 70s, obtained a commercial pre-sale right in this redevelopment project to generate income through personal business or rentals. However, due to the delay, C has been unable to start a new business elsewhere and is stuck. With no income, the relocation loan received in 2019 is nearly depleted.

C said, "The union must consider the damage to members caused by prolonged relocation. It is not just a matter of construction costs and pre-sale prices; the individual losses from delayed relocation and lack of income must be recognized," and added, "This is an issue that must be addressed before construction begins."

Regarding this, a union official stated, "The union has always prioritized both the asset value of members and the stability of the project. While there may be regrets about the increase in construction costs, we have considered the damage to members caused by the delay and have had disagreements with the construction company. As a result of putting the final proposal from the construction company to a vote at the general meeting, the majority of members accepted it. If the project proceeds stably, the asset value of members can also be preserved."

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