Relaxed Consent Rates and FAR Incentives... Lowering the Bar for Small-Scale Redevelopment and Reconstruction

Eased Consent Requirements for Association Formation from the 27th
Expanded Implementation of Integrated Review Targets

Areas densely packed with aging, low-rise housing that have found it difficult to carry out large-scale redevelopment or reconstruction projects will now be able to promote urban renewal projects more easily. By lowering the required rate of resident consent for such projects and boosting project profitability through special construction provisions, projects are expected to move forward more quickly.

The Ministry of Land, Infrastructure and Transport announced on the 25th that the amended Special Act on the Maintenance and Improvement of Vacant Houses and Small-Scale Housing and its subordinate regulations will come into full effect starting on the 27th.

Small-scale housing maintenance projects are initiatives that quickly renovate aging, low-rise areas where large-scale redevelopment or reconstruction is difficult, by dividing them into small sections of less than 10,000 square meters. They are broadly classified into four types: autonomous housing maintenance, street housing maintenance, small-scale redevelopment, and small-scale reconstruction.

To facilitate swift development, the ministry has decided to lower the threshold for resident consent required to approve the establishment of project associations. Going forward, the required consent rates for street housing maintenance, small-scale reconstruction, and small-scale redevelopment will each be eased by 5 percentage points. For street housing maintenance and small-scale redevelopment, the rate will be lowered from at least 80% to 75%, and for small-scale reconstruction, from at least 75% to 70%. For autonomous housing maintenance projects, which had required unanimous consent from all land and property owners regardless of their number, the consent requirement for the residents' council will be relaxed to at least 80% when there are more than five land and property owners.

The government also plans to grant special construction provisions so that the supply of infrastructure facilities such as roads and parks can proceed smoothly. When land adjacent to the project area or land within the project area that includes vacant houses is provided as sites for infrastructure facilities or shared-use facilities, a new floor area ratio incentive will allow construction up to 1.2 times the legal maximum floor area ratio. In addition, the current building coverage ratio incentive, which is limited to "street blocks located on sloping terrain," will be expanded to apply to the "entire project area," thereby easing the conditions for receiving building coverage ratio incentives.

The scope of projects eligible for integrated reviews will also be expanded. The review targets will be broadened from matters related to urban and county management plans to include landscape reviews, educational environment assessments, and traffic and disaster impact assessments. Considering that separate reviews currently take more than four to six months, project implementation is expected to speed up in the future.

In addition, the government has decided to raise the acquisition price for rental housing. Under the floor area ratio incentive, the acquisition price standard for rental housing supplied by project implementers will be increased from the "standard construction cost" to 80% of the "basic construction cost," which is about 1.4 times the standard construction cost. The standard construction cost is used as the price basis for calculating the accumulation rate of special repair reserves and is subject to a validity review every three years after its notification, which has limited its ability to fully reflect rising construction costs.

Kim Youngguk, Director General of the Housing Supply Promotion Headquarters at the Ministry of Land, Infrastructure and Transport, said, "We expect that the implementation of these amended laws and regulations will increase the speed of promoting small-scale housing maintenance projects and improve their business feasibility," adding, "We will continue to improve the system in communication with the field in order to improve aging residential environments in city centers and promote housing supply."

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