Seogangseok, Songpa District Mayor, Proposes Improvement of Three Major Obstacles in Reconstruction System

Proposal for Amendments on Reconstruction Safety Inspection, Reconstruction Charges, and Sale Price Ceiling to the Ministry of Land, Infrastructure and Transport and Seoul City

Seokangseok, Mayor of Songpa District

[Asia Economy Reporter Park Jong-il] Seogang-seok, Mayor of Songpa District, has officially launched efforts to expedite the reconstruction projects.

Songpa District (Mayor Seogang-seok) announced on the 12th that it has submitted amendment proposals to the Ministry of Land, Infrastructure and Transport and the Seoul Metropolitan Government to relax regulations related to reconstruction as part of implementing the "Basic Plan for the Swift Promotion of Reconstruction and Other Maintenance Projects in Songpa District," prepared in line with the government's housing policy.

First, the district proposed easing the standards for reconstruction safety inspections and abolishing the procedure of requesting appropriateness reviews from public institutions. The current standards, strengthened in 2018, have led to many cases where projects are ultimately rejected at the public institution appropriateness review stage, causing numerous complexes to postpone or hesitate in proceeding. In Songpa District, there are a total of 10 complexes (14,109 households) currently undergoing or scheduled for detailed safety inspections.

Accordingly, Songpa District proposed ▲relaxing the housing reconstruction safety inspection judgment criteria (structural stability from 50% to 30%, building finishing and equipment aging from 25% to 30%, residential environment from 15% to 30%, while maintaining the existing cost analysis) and ▲abolishing the redundant procedure of requesting appropriateness reviews from public institutions again for results judged by safety inspection specialized agencies registered with the Ministry of Land, Infrastructure and Transport.

Next, the district proposed revising the starting point for imposing reconstruction surplus profit charges (under the Act on the Recovery of Excessive Profits from Reconstruction). The current standard applies the starting point as the approval date of the establishment of the association's promotion committee, but the proposal is to revise it to the date of approval of the project implementation plan. Recent cases show that it takes an average of 10 years from the association establishment approval to the completion approval, and an average of 7 years from the project implementation approval to the completion approval.

The district judged that revising the starting point to the project implementation approval date is a more effective policy based on the provision in the Act on the Recovery of Excessive Profits from Reconstruction that "the starting point shall be the day that is 10 years prior, counting backward from the end date of imposition."

The district explained that the revision of the starting point will reduce the reconstruction surplus profit charges and invigorate reconstruction maintenance projects.

Finally, the district proposed amendments to the regulations on calculating the sale price of apartment units. Last month, the government revised the rules on calculating the sale price of apartment units to add relocation loan financial costs to the land price addition items, but the district proposed ▲including business loan financial costs, which are essential expenses in actual maintenance projects, in addition to relocation loan financial costs.

Also, ▲abolishing the verification system by the Korea Appraisal Board for land price appraisal results evaluated by appraisal institutions, and ▲considering the gradual abolition of the sale price ceiling system upon market stabilization in view of the future housing market.

Seogang-seok, Mayor of Songpa District, said, "With this amendment proposal, we expect that the reconstruction and redevelopment projects of 55 complexes in areas with vulnerable residential environments will proceed swiftly, improving the quality of life for district residents," and added, "We will continue to actively support administration by identifying and improving unreasonable systems in maintenance projects to smoothly promote related projects."