Government Shows Interest in Approach for Selecting Pilot Sites for Public Redevelopment in December

[Asia Economy Reporter Yoo In-ho] As the government announced plans to select pilot sites for public redevelopment projects in December, attention is focusing on the methods of promoting public redevelopment projects.

Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, stated at the 7th Real Estate Market Inspection Meeting with related ministers on the 23rd, "Among the public redevelopment applicant associations, we plan to select pilot sites starting in December by carefully distinguishing the wheat from the chaff, such as projects where residents' consent is sufficient and redevelopment is urgent."

Deputy Prime Minister Hong said, "Currently, dozens of associations have expressed their intention to participate in the selection of public redevelopment pilot sites."

In this regard, the Ministry of Land, Infrastructure and Transport, Seoul Metropolitan Government, and Korea Land and Housing Corporation (LH), the competent authorities, are reportedly reviewing the so-called 'Seongnam-type public redevelopment' model, which improved the residential environment of the old downtown area of Seongnam City, Gyeonggi Province, to ensure the success of public redevelopment projects.

Already, the Ministry of Land and Seoul City have launched a public contest from the 21st to select pilot project candidates for public redevelopment projects being promoted under the recent '5.6 Measures to Strengthen the Housing Supply Base in the Metropolitan Area.'

Currently, it is reported that about 20 to 30 areas have shown interest.

The issue lies in resolving conflicts such as tenant relocation measures for the original residents of the public redevelopment target areas. This is because many private redevelopment projects are currently stalled due to lack of profitability and internal and external conflicts within associations.

In this context, the 'Seongnam-type public redevelopment' method promoted by LH and Seongnam City is emerging as an alternative. This is a 'cyclical redevelopment' method where LH prepares relocation measures for tenants and others to help original residents resettle before starting the redevelopment project. LH explains that the original resident resettlement rate exceeds 50%. The average resettlement rate for redevelopment projects in Seoul is only 15%.