Public Redevelopment Phase 1 Candidate Sites Face Issues... Is LH Cutting Ties?

LH in charge of operations loses momentum amid organizational dissolution crisis
Project briefing delayed... Residents also unsettled

[Image source=Yonhap News]

[Asia Economy Reporter Kim Hyemin] The public redevelopment projects selected earlier this year are facing setbacks due to the land speculation scandal involving employees of Korea Land and Housing Corporation (LH) in the 3rd New Town development. LH, responsible for the practical work, has lost momentum, and residents' expectations have turned into concerns, causing unrest.

According to the maintenance industry on the 19th, one of the first-phase public redevelopment candidate sites in Seoul canceled a scheduled project briefing session for residents the day before. Although the briefing date was set last month together with LH, it was ultimately postponed. The project briefing is a session to explain the project schedule and expected contributions to residents. It is equivalent to a declaration to officially proceed with public redevelopment after obtaining residents' consent.

There are eight first-phase public redevelopment candidate sites, but only Bongcheon 13 District in Gwanak-gu, Seoul, has held a project briefing session more than two months after selection. Meanwhile, LH, which must coordinate closely with the residents' association, is facing organizational instability due to the land speculation issue involving its employees, making it difficult to guarantee the project's progress.

Residents are confused. A representative of a redevelopment promotion committee at one candidate site said, "Even residents who were trying to be patient are now unsettled as the controversy grows," adding, "We receive many inquiries asking whether LH can be trusted and if the project can be properly carried out."

As distrust in LH grows, there is also talk of changing the joint implementer to Seoul Housing Corporation (SH). If the work gap caused by the LH scandal prolongs, the communication channel might be switched to SH. Currently, the first-phase public redevelopment candidate sites are proceeding with projects with either LH or SH, with LH participating in Bongcheon 13 District and Sinseol 1 District. A Seoul city official said, "The project implementer can be changed at any time before residents' consent is obtained and the implementer is officially designated."

Among candidate sites struggling to meet the residents' consent rate (75% for private redevelopment), anxiety is evident. A promotion committee official said, "We worry that progress will stall, but since public redevelopment lowers the consent rate, it is the only way to push redevelopment forward, so no one dares to suggest giving up."

There are also demands to expand incentives to accelerate the project. A promotion committee official said, "Even though distrust in the public sector has increased, if residents agree, public redevelopment will proceed," adding, "To reduce residents' contributions, incentives such as increasing floor area ratio should be expanded to create more inducements."