Sangnok Tower Apartment in Gwangjin-gu, Seoul, Establishes Association in 5 Months... Unusually Fast
Remodeling Has Lower Approval Criteria Than Reconstruction
Possible with Safety Inspection Grade B After 15 Years Since Completion
If General Sale Is 30 Units or Less, Private Land Price Ceiling Does Not Apply
Unverified Safety of Vertical Extension Is an Obstacle... Approval for Load-Bearing Wall Demolition Also Undecided
[Asia Economy Reporter Lee Chun-hee] As the government and Seoul City strengthen regulations on reconstruction projects, redevelopment projects through remodeling seem to be accelerating instead.
According to the industry on the 2nd, the remodeling housing association of Sangnok Tower Apartment in Gwangjang-dong, Gwangjin-gu, Seoul, received approval for the establishment of the association from Gwangjin-gu Office on the 28th of last month. This complex is a 'standalone apartment' consisting of 200 units, originally sold in 1997 as housing for POSCO employees. Since the establishment of the promotion committee in September last year, they secured a 93% consent rate and succeeded in establishing the association within five months.
The industry evaluates this as an unusually fast pace for the progress of redevelopment projects. Remodeling is freer from various regulations compared to reconstruction. Unlike reconstruction, which is only possible after 30 years from completion, remodeling projects can be promoted after just 15 years. In safety inspections, reconstruction can only proceed from a D grade (conditionally allowed), but remodeling projects can proceed even with a B grade (maintenance and repair). Unlike reconstruction in speculative overheated districts such as Seoul, where transfer of association member status is prohibited after association establishment, remodeling has no transaction restrictions.
They can also avoid the private land price ceiling system, which will be fully implemented next month after the grace period for redevelopment projects ends. Sangnok Tower, currently with 200 units, plans to add 29 units through remodeling. The association can freely set the sale price for these units. Although located in Gwangjin-gu, an area subject to the price ceiling system, the system does not apply if the number of general sale units is less than 30.
Seoul City is also encouraging remodeling projects by promoting the 'Seoul-type Remodeling,' which offers partial support for costs such as safety inspections and expedited permits, but there are still obstacles. Vertical extension issues are representative. Although the 2014 amendment to the Housing Act allowed profitability through vertical extension of up to three floors, so far, only one complex, Seongji Apartment in Songpa-dong, Songpa-gu, has had its vertical extension project plan approved.
The vertical extension method adds new floors on top of the existing building's frame, significantly increasing the load. The structure must be reinforced accordingly, but the related construction methods have not yet been verified by accredited institutions. Industry insiders say the exceptional safety review approval of Seongji Apartment was "thanks to being built on solid ground."
Whether to allow the demolition of load-bearing walls, essential for securing profitability during the extension process, has also not yet been decided. For both vertical and horizontal extensions, demolition of load-bearing walls is necessary to secure housing layouts that meet modern residential preferences. The Ministry of Land, Infrastructure and Transport, the competent authority, is conducting a study on the safety of load-bearing wall demolition, but the announcement of the study results, originally scheduled for last year, has been continuously delayed. A ministry official said, "The demonstration experiment is not yet complete," and "We plan to finish the study in the first half of this year."
▲ Dunchon Hyundai 2nd Phase Remodeling Bird's-eye View in Dunchon-dong, Gangdong-gu, Seoul (Provided by Hyosung Heavy Industries)
The number of complexes opting for separate building extensions, free from safety issues, is also increasing. A representative example is Hyundai 2nd Apartment in Dunchon-dong, Gangdong-gu, which recently started the safety inspection process after selecting Hyosung Heavy Industries as the contractor. Currently, this complex consists of two buildings with a maximum of 12 floors above ground and 196 units. Without vertical extension, they plan to add one building with 24 units, increasing the total to 220 units.
A representative from the association explained, "By expanding the floor plan through horizontal extension and increasing general sale units through separate building extensions, it is possible to secure a low contribution amount," adding, "We did not consider vertical extension, whose structural stability review is uncertain." This complex is also exempt from the price ceiling system regulations as the extension scale is only 24 units.
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