[2020 National Audit] 394 Redevelopment and Reconstruction Cancellation Areas in Seoul... "Public Development Should Be Expanded"

[Asia Economy Reporter Yuri Kim] There have been calls for additional institutional improvements to revitalize Seoul's public redevelopment and reconstruction projects.

On the 20th, Cho Oh-seop, a member of the National Assembly's Land, Infrastructure and Transport Committee from the Democratic Party of Korea, stated, "To expedite the public redevelopment and reconstruction projects, it is necessary to shorten or exempt the feasibility review period for new investment projects conducted by the 'Local Public Enterprise Evaluation Institute.'" He emphasized, "It is also necessary to improve constraints on funding procurement, such as enabling local public enterprises to secure their own financing."

The public redevelopment project is promoted through a competitive bidding process, involving public implementers such as the Seoul Housing and Communities Corporation (SH Corporation) to meet public interest requirements (expanding rental supply) and provide incentives to normalize or accelerate stalled redevelopment projects, thereby increasing housing supply in urban areas.

According to Seoul City, as of the 21st of last month, three areas applied for the public redevelopment project competition: Hannam 1 District, Jangwi 9 District, and Heukseok 2 District. Seventeen areas submitted preliminary letters of intent, including five in Seongbuk-gu, three in Yeongdeungpo-gu, two in Eunpyeong-gu, and one each in Jongno-gu, Dongjak-gu, Seodaemun-gu, Dongdaemun-gu, Seongdong-gu, Mapo-gu, and Jungnang-gu. A preliminary letter of intent is submitted to Seoul City after obtaining 5% consent from residents in the respective area, which leads to SH Corporation and others conducting resident briefings on public redevelopment to apply for the competition.

Notably, about half of the 17 areas that submitted preliminary letters of intent?eight areas?were originally designated redevelopment zones but were deregulated after obtaining 30% resident consent due to conflicts among residents, lack of project feasibility, and burdens from development charges.

The public reconstruction project is promoted by selecting pilot zones after conducting a simplified pre-consultation evaluating the benefits of proceeding with public reconstruction when selecting candidate sites. As of September 30, 15 areas requested pre-consultations, including two in Yongsan-gu, and one each in Jongno-gu, Seongdong-gu, Gwangjin-gu, Dongdaemun-gu, Jungnang-gu, Mapo-gu, Guro-gu, Geumcheon-gu, Yeongdeungpo-gu, Gwanak-gu, Seocho-gu, Gangnam-gu, and Songpa-gu.

Rep. Cho said, "There are as many as 394 redevelopment and reconstruction deregulated zones in Seoul, raising concerns about accelerated aging of housing and infrastructure and slumification of residential areas due to deregulation." He added, "It is necessary to normalize projects and expand new housing supply through public redevelopment and reconstruction that can provide project cost support and expedited permits."