Seoul Villa Area Development Gains Momentum with 'Public Small-Scale Reconstruction' Project

Rep. Cheon Junho's Proposed 'Vacant House Maintenance Act' Amendment Passes National Assembly Standing Committee Bill Subcommittee

The view of a villa neighborhood from a building in Yangcheon-gu, Seoul, where villa transaction volumes are increasing on the 11th. Photo by Moon Honam munonam@

[Asia Economy Reporter Onyu Lim] Among the 2·4 supply measures, the 'Public Small-Scale Reconstruction Project' for the redevelopment of villa neighborhoods in Seoul is gaining momentum.

On the 12th, according to the National Assembly and the Ministry of Land, Infrastructure and Transport, the amendment to the "Special Act on the Maintenance of Vacant Houses and Small-Scale Housing" (Vacant House Maintenance Act), which was primarily proposed by Assemblyman Chun Junho of the Democratic Party of Korea, recently passed the subcommittee for bill review of the National Assembly Land, Infrastructure and Transport Committee. This bill was closely coordinated with the Ministry of Land, Infrastructure and Transport, the National Assembly, and the Seoul Metropolitan Government from the preparation stage, and there is little difference in opinion between the ruling and opposition parties, so it is expected to pass the National Assembly smoothly.

The public small-scale reconstruction project involves public institutions such as the Korea Land and Housing Corporation (LH) participating to lead the project, increasing the floor area ratio up to 120% of the legal limit, and supplying public rental housing for 20-50% of the increased floor area ratio.

The small-scale reconstruction project is a maintenance project promoted in multi-family housing complexes such as old row houses or small apartments with a site area of less than 10,000㎡ and fewer than 200 existing housing units. In Seoul alone, there are 2,070 housing complexes that meet the project requirements, but due to lack of profitability, only 3.4%, or 70 complexes, have proceeded with the project so far.

Under the public small-scale reconstruction project, the maximum floor area ratio can be raised from 250% to 300% in Type 2 General Residential Areas, and from 300% to 360% in Type 3 General Residential Areas. It is not subject to the price ceiling system for sale, and building regulations such as floor limits are relaxed through integrated review during the project promotion process. Since there is no need to undergo safety inspections or designation procedures for maintenance districts, the project period is significantly shortened compared to private maintenance projects, and if promoted with speed, it is expected that the project can be completed within five years.

In particular, the public small-scale reconstruction project can be applied to high-density development of low-rise residential areas such as row house complexes, and it is reported that the Seoul Metropolitan Government has a strong will to promote this project. Earlier in June, Seoul decided to lift regulations in areas where building heights were limited to seven floors in Type 2 General Residential Areas due to concerns about indiscriminate development once designated as maintenance districts. As a result, when small-scale reconstruction is carried out, buildings can be raised up to 25 floors based on the Type 2 General Residential Area standard.

A legal basis has also been established to supply equity-type housing for landowners who find it difficult to pay contributions.

Assemblyman Chun said, "Public development will serve as a blessing in areas where private projects are difficult to promote," and added, "I hope that public small-scale reconstruction will be activated and residential environments will be improved in many areas."