Nurturing Urban Regeneration Dreams with Housing and Urban Fund... Support Amount Expected to Surpass 2 Trillion Won Within the Year

Seoul Changdong Startup and Cultural Industry Complex (Provided by the Ministry of Land, Infrastructure and Transport)

[Asia Economy Reporter Chunhee Lee] The Ministry of Land, Infrastructure and Transport announced on the 12th that as of the end of June, the cumulative approved amount of fund support from the Urban Account of the Housing and Urban Fund reached a total of 1.8643 trillion KRW. The number of project sites totals 342.

The Urban Account fund was established as a basis through the enactment of the Housing and Urban Fund Act in 2015 to revitalize urban regeneration projects. Although the approved fund amount was only 46.1 billion KRW in the first year of support in 2015, it increased to 599.7 billion KRW in 2018 as the Urban Regeneration New Deal policy gained momentum, and further rose to 797.9 billion KRW last year. In the first half of this year, approvals amounting to 376.7 billion KRW were made, and the cumulative approved amount is expected to exceed 2 trillion KRW within the year.

The approved funds are being provided as equity investment or loans to urban regeneration projects that were difficult to proceed due to low profitability. Currently, projects are underway at 342 sites nationwide with a total project cost of 4.731 trillion KRW. Of these, 171 sites have been completed and are in operation, 73 sites are under construction, and 98 sites are in planning and design stages.

The Urban Account fund supports projects through four products: ▲ Urban Regeneration Support Equity and Loans ▲ Urban Regeneration Seed Loans ▲ Small-scale Maintenance Loans ▲ Old Industrial Complex Loans. First, Urban Regeneration Support Equity and Loans are provided for medium to large-scale complex development projects aimed at creating regional hubs for residential, commercial, and tourism purposes. Currently, 866.2 billion KRW in funds have been supported across nine locations including the Changdong Startup and Cultural Industry Complex in Seoul, Daegu, Cheongju in Chungbuk, and Cheonan in Chungnam.

Urban Regeneration Seed Loans support small-scale urban regeneration projects led by the private sector, such as shared collaborative spaces, startups, and rental commercial spaces, to revitalize alleyway economies. A total of 415.5 billion KRW in funds have been provided to 235 sites. Additionally, Small-scale Maintenance Loans have been provided to 97 sites with 545.1 billion KRW, and Old Industrial Complex Loans have been given to one site, the Dongwon Biz Platform (Knowledge Industry Center) in Daegu, with 37.5 billion KRW.

The Ministry of Land, Infrastructure and Transport is also strengthening management and supervision, including on-site inspections, to ensure that the increasing number of project sites operate soundly. A full inspection of all 342 project sites last month found that eight sites experienced delays compared to the original plans, and seven sites were operating differently from the plans approved at the time of fund approval. For delayed projects, the Ministry is taking measures such as extending project periods and issuing fund recovery warnings to normalize the projects, while for sites operating differently from plans, it has ordered corrective actions to ensure that public interests are not compromised.

Going forward, the Ministry plans to hold regional briefings this month targeting urban regeneration economic organizations such as social enterprises and cooperatives.

Kim Dong-ik, Director of the Urban Regeneration Economy Division at the Ministry of Land, Infrastructure and Transport, stated, "Support from the Urban Account fund has been a driving force enabling urban regeneration projects that were difficult to proceed due to low profitability." "We will continue to actively provide financial support to revitalize urban regeneration projects, thereby creating more jobs and boosting the vitality of local economies."