Designation of HUG Fund-Supported Type 1 'Cheonho Urban Regeneration Recognition Project'

[Asia Economy Reporter Yuri Kim] The 'Cheonho Urban Regeneration Recognition Project' has been designated as the first project under the 'Housing and Urban Guarantee Corporation (HUG) Fund Support Type.'

On the 27th, Seoul City held the 6th Urban Regeneration Committee meeting and announced on the 28th that the Cheonho Urban Regeneration Recognition Project was conditionally approved as the first HUG Fund Support Type urban regeneration recognition project.

An urban regeneration recognition project is a 'point unit' project that can be implemented to revitalize urban regeneration within a strategic plan area without establishing an activation plan. It was introduced in August last year under the 'Special Act on Urban Regeneration Activation and Support.' The Ministry of Land, Infrastructure and Transport has been operating a government support system ranging from 1 billion to 5 billion KRW (with Seoul City matching local funds of 1.5 billion to 7.5 billion KRW) by selecting urban regeneration recognition projects through a New Deal urban regeneration project contest since the enforcement of the law in November last year.

The HUG Fund Support Type recognition project is carried out through housing and urban fund loans without separate public financial support, and since the introduction of the recognition project system, Seoul City is the first nationwide to promote it. The advantage is that the project can be implemented quickly and total project costs can be reduced. According to the Urban Regeneration Act, the review and designation of recognition projects are under the authority of the strategic plan establishment authority (Seoul City). Since recognition projects are point unit projects, they can be implemented faster compared to existing activation areas (which take an average of 1.5 years to establish plans). The city stated that it developed a pilot model of the HUG Fund Support Type urban regeneration recognition project to develop various types of urban regeneration projects that citizens can strongly feel.

The HUG Fund Support Type urban regeneration recognition project reduces total project costs through low-interest (1.8~2.2%) housing and urban fund loans compared to general development projects. It allows enjoying the effect of project cost support without separate financial aid.

The Cheonho Urban Regeneration Recognition Project will receive low-interest housing and urban fund loans not only for the existing aging public office complex development's public service center and social welfare center but also for living SOC facilities such as daycare centers, senior citizen centers, and small libraries. The project is jointly carried out by LH Corporation and Gangdong-gu. The original plan was to build only the Happy Housing under the complex development by receiving housing and urban fund 'housing account' loan support according to the 'Special Act on Public Housing.' With this urban regeneration recognition project, not only the Happy Housing but also the low-rise public office building and living SOC will receive low-interest (1.8%) loans from the housing and urban fund 'urban account.' The expected project cost reduction due to low-interest loans is about 1.1 billion KRW.

Reflecting the conditional approval of the Urban Regeneration Committee, the Cheonho Urban Regeneration Recognition Project aims to apply for loans from the housing and urban fund in September, apply for housing construction project approval in October, and start construction within the year.

Ryu Hoon, Director of Seoul City's Urban Regeneration Office, said, "We will actively expand base unit urban regeneration projects that citizens can strongly feel by developing various recognition project types beyond government-supported projects."