20% of Seoul Public Redevelopment to be Public Rental Housing... Ministry of Land, Infrastructure and Transport Announces Amendment Draft for Legislation

Specifics on Public Redevelopment and Reconstruction Requirements, Procedures, and Exceptions
Legislative Notice for Related Amendments Including the Enforcement Decree of the Provincial Autonomous Act
20% of Seoul Public Redevelopment to be Public Rental Housing
Public Reconstruction to Build at Least 1.6 Times the Previous Number of Households

The area around Jangwi 8 District, Seongbuk-gu [Image source=Yonhap News]

[Asia Economy Reporter Moon Jiwon] The requirements and procedures for public redevelopment and reconstruction, introduced to expand housing supply in urban areas, have been specified.

The Ministry of Land, Infrastructure and Transport announced on the 18th that it will publicly notify the enforcement decree of the "Urban and Residential Environment Maintenance Act" and the amendment to the "Construction Ratio of Rental Housing and Housing Size in Maintenance Projects" from the 20th to specify the requirements, procedures, and special cases for public redevelopment and reconstruction.

Public redevelopment and reconstruction are maintenance project methods introduced to increase housing supply in urban areas, as part of the "Measures to Strengthen the Housing Supply Base in the Metropolitan Area" in May last year and the "Measures to Expand Housing Supply in the Seoul Area" in August of the same year.

When the public sector participates in maintenance projects to expand rental housing (public redevelopment) or new supply (public reconstruction), administrative procedures are simplified through integrated review, and floor area ratio restrictions are relaxed to improve project feasibility.

The Ministry of Land plans to supply a total of 136,000 new housing units in urban areas by 2025 through public-led maintenance projects such as public redevelopment, public reconstruction, and public direct implementation maintenance projects.

First, looking at the amendment, public redevelopment requires that at least 20% (Seoul) or 10% (outside Seoul) of the total number of households be supplied as public rental housing. The mayor or governor may announce a lower public rental supply ratio of 10% (Seoul) or 5% (outside Seoul) in areas that are not residential zones.

Public reconstruction requires construction of at least 1.6 times the previous number of households. If it is difficult to build 1.6 times or more due to conditions of the relevant or nearby complexes, the housing supply scale requirement may be relaxed.

For public redevelopment projects, the authority to designate maintenance zones may designate a public redevelopment planned zone by announcing the outline, current status, timing of designation of the maintenance zone, and preliminary implementers of public redevelopment for the area intending to promote public redevelopment before the designation of the maintenance zone.

When designated as a public redevelopment planned zone, new construction activities in the area are restricted, and those who acquire land by splitting shares are not granted pre-sale rights, preventing speculation. Residents can systematically prepare for public redevelopment with the Korea Land and Housing Corporation (LH) as the preliminary implementer.

Public reconstruction maintenance zones are regarded as having been upgraded by one step in the current use district according to the enforcement decree, which relaxes urban regulations such as floor area ratio and number of floors, enabling large-scale housing supply and improved project feasibility.

Local governments acquire a portion of the increased floor area ratio from the upgrade, ranging from 40% to 70% as determined by city or provincial ordinances, and 50% of this is used for public sale and 50% for public rental housing. Also, unlike public rental housing where the local government acquires attached land free of charge, when acquiring public sale housing, the local government acquires the attached land at 50% of the appraised value, partially easing the landowners' burden of donation.

If an existing maintenance zone that was pursuing a project as general redevelopment changes its project method to public redevelopment, rental housing occupancy rights are granted to residents who have lived there since the earlier of the implementer designation date or the date of establishment of the maintenance plan for public redevelopment, broadly supporting the resettlement of low-income original residents.

The Ministry of Land explained that it is steadily progressing with project procedures for 24 public redevelopment candidate sites and 5 public reconstruction pilot projects selected earlier this year.

At sites selected as public redevelopment candidates in January, such as Sinseol 1, Heukseok 2, Yongdu 1-6, and Gangbuk 5, resident briefings were held to explain maintenance plans and estimated contributions, and currently, maintenance plans are being established reflecting residents' opinions.

For the second round of public redevelopment candidate sites selected in March, resident briefings will be held at all candidate sites within the first half of the year, and residents' opinions will be collected.

Regarding the public reconstruction pilot projects announced last month, the Ministry is reviewing with Seoul City how to reflect residents' suggestions on the consulting results in the maintenance plan. Once the maintenance plan is completed, the in-depth consulting results will be presented to residents in the first half of the year, and resident consent will be obtained to establish the maintenance plan and designate the public implementer within the year.