[Opinion] Reviewing Redevelopment Projects <2> Redevelopment Projects and Improving Resettlement Rates

Changmoo Lee / Professor, Department of Urban Engineering, Hanyang University

Professor Changmoo Lee, Department of Urban Engineering, Hanyang University

A few days ago, with former Mayor Oh Se-hoon becoming the unified opposition candidate, the Seoul mayoral election on the 7th of next month has been settled as a competition between unified candidates from both the ruling and opposition parties. Regardless of which candidate becomes mayor, it seems that reconstruction and redevelopment projects in Seoul will be revitalized. However, the activation of redevelopment may rekindle long-standing controversies. It is said that original residents are displaced due to redevelopment projects. Supporting statistics show that in most areas, the resettlement rate of original residents after redevelopment is less than 20%. Should increasing the resettlement rate of redevelopment original residents really be the top priority? The job networks, which were once the reason for maintaining the community of original residents in dilapidated housing areas during the 1970s and 1980s, have long since disappeared.

The author was able to track and study the residential movement process of original residents in the redevelopment zone within Gireum New Town, which took place in the early 2000s, through resident registration data. This allowed examination not only of the relocation process during demolition but also of re-entry after completion and subsequent movements. The most interesting observation was that the farther the original residents moved, especially when moving outside Seoul, the higher the proportion choosing apartments. Considering that the existing housing in redevelopment zones consisted of detached or multi-family houses, moving to apartments can be understood as a choice for qualitative improvement of housing rather than location. This phenomenon was also observed, albeit less strongly, among tenants rather than original owners.

Another interesting observation is that elderly owners have a relatively low rate of moving nearby and a higher rate of moving to non-apartment housing within Seoul. For them, purchasing alternative multi-family houses that can maintain rental income using compensation money is a more advantageous choice than re-entering a decent redevelopment apartment. The implication of this phenomenon shows that the residential movement of original residents after demolition is strongly characterized by voluntary choices considering housing location, housing quality, and rental income, rather than involuntary displacement.

One argument for increasing the resettlement rate of redevelopment project original residents is that 80% of original residents move to areas near the redevelopment zone after demolition. This is unusually high compared to the general residential movement rate of about 60% moving within 5 km. However, this phenomenon occurs because tenants in redevelopment zones receive relocation expenses. For example, if a tenant living outside the redevelopment zone at that time searches for a rental house with a deposit of 40 million KRW, a tenant in the redevelopment zone will search for a rental house with 50 million KRW, including an additional 10 million KRW relocation expense. As a result, tenants living in redevelopment zones secure nearby rental housing, while tenants outside the redevelopment zone are pushed elsewhere. This competition results in the high rate of original residents moving to nearby areas. Expanding support for tenants in redevelopment zones only intensifies the displacement of low-income tenants who do not reside within the zone.

The housing rights issue of original residents in redevelopment zones should be approached not as a localized solution limited to redevelopment zone residents but as a general solution for low-income housing support within the metropolitan market connected through a chain of residential movements. It is also necessary to consider the side effects that may arise when only the choice to increase the resettlement rate of original residents is pursued, ignoring the metropolitan-level housing consumption improvement effect of redevelopment projects through the housing filtering process discussed in previous columns.

Chang-Moo Lee, Professor, Department of Urban Engineering, Hanyang University

[Opinion] Revisiting Maintenance Projects <1> The Housing Improvement Effect of Redevelopment Apartment Supply