If You Remove 'LH' from Apartment Complex Names, House Prices Rise 8%?…The Economics of Apartment Naming

Luxury Brand 'Andante' Launched but Faces 'Ansande·Angeoji' Humiliation
Private Apartments Also Demand "Attach Neighboring Area Name"
"Name Change Led to 7.8% Housing Price Increase" Research Findings

LH's premium brand 'Andante'

Korea Land and Housing Corporation (LH) is once again struggling over apartment names. Residents who purchased public sale apartments are demanding a name change, arguing that "names associated with LH could negatively affect property values and residents' prestige."

◆LH's 'ANDANTE' Brand, Developed at a Cost of 480 Million KRW, Also Faces Ridicule... 'Ansande', 'Angeoji'

LH launched a new brand called 'ANDANTE' in September 2020 to revamp and upscale the image of public sale housing. Although LH has introduced various housing brands such as Jugong Greenville, Ttulanche, Humansia, and Cheonnyeon Tree, none have gained much popularity. New derogatory terms like 'Hyugeo' (Humansia beggar) and 'Elsa' (people living in LH housing) have emerged to belittle residents living in apartments sold below market prices.

Despite investing 480 million KRW in research and development for ANDANTE, the response remains cold.

Prospective ANDANTE residents have formed the 'National ANDANTE Association' and are demanding the right to name their complexes themselves. If that is not possible, they request that the ANDANTE brand name be used alongside the construction company's brand. For example, although LH sold the apartments, those built by GS Construction would be called 'ANDANTE Xi.'

They claim that the ANDANTE brand is also subject to derogatory and mocking nicknames such as 'Ansande,' 'Angeoji,' and 'Angande.'

So far, 20 complexes with about 17,300 households have been sold under the ANDANTE name nationwide, with move-ins starting next year.

However, LH maintains that the complex names cannot be changed because they were announced before the sales.

LH stated, "(For ANDANTE and other public sale housing) the application of the brand is notified in the resident recruitment announcement, and sales and contracts are conducted accordingly," adding, "At move-in, the brand must be applied as stated in the announcement, fulfilling contractual obligations to the buyers."

Rather than changing the name, LH plans to enhance brand value over the long term through quality and image improvements. LH emphasized, "We have established and are operating a 'quality and defect system' throughout all project stages to ensure consistent quality," and "We will strive to secure quality at a level equal to private brands to stabilize the ANDANTE brand."

◆Private Apartments Face Similar Issues... Requests to Add Neighboring Area Names

Conflicts over apartment names are not limited to public sales.

In Yangcheon-gu, Seoul, 'Sinjeong New Town Lotte Castle' submitted a name change application to Yangcheon District Office at the end of 2020 to rename the complex 'Mokdong Central Lotte Castle.' This was based on the judgment that the name 'Mokdong' is superior to 'Sinjeong New Town' in various respects. However, Yangcheon District Office rejected the application, stating, "It is inappropriate to include 'Mokdong' in the name when the apartment is clearly located in Sinwol-dong."

HDC Hyundai Development Company's apartment brand 'IPARK' also faced difficulties. Following a series of collapse accidents and ensuing controversies, some residents voiced concerns about falling apartment prices and demanded the removal of 'IPARK' from the apartment name.

There was also an unfortunate episode related to COVID-19.

When the 'Shincheonji' Daegu Church was identified as a major COVID-19 transmission site in 2020, residents of Woobang Shincheonji Town in Pohang, Gyeongbuk, sought to change the apartment name due to concerns about negative associations.

Although this apartment built by Woobang Construction has no connection to the Shincheonji Church, residents feared misunderstandings due to the name and pushed for renaming. The residents' representative meeting held a vote on the name change proposal, but it failed due to insufficient quorum.

There are rare cases where name changes succeed. For example, 'Poil Xi' in Uiwang-si, Gyeonggi-do, changed its name to 'Indeokwon Central Xi' to reflect the benefit of the GTX train stopping at Indeokwon Station.

Photo by Asia Economy

◆Why the Obsession with Names... Name Changes Can Increase Property Values by 7.8%

The reason for the obsession with changing apartment names lies in their significant impact on property values. Research shows that changing apartment names can raise apartment prices.

According to a paper titled 'A Study on Apartment Brand Premium through Name Change Cases' published last year by the Korea Real Estate Analysis Society, apartments that changed their names to brands with higher recognition experienced about a 7.8% price increase compared to nearby apartments that did not change their names.

This study mainly analyzed cases of apartment name changes related to brands and regional names in Seoul since 2006. However, the price increase effect was limited to the specific apartments and did not affect the local housing market.

Moreover, the effects of brand name changes and regional name changes differed. The paper stated, "Positive effects of name changes are significant only when related to brands," indicating that the effect is essentially a brand effect rather than a name change effect. It further explained, "In contrast, name changes related to regional names did not show statistically significant results."

Photo by Asia Economy

◆How to Change Apartment Names... Resident Consent is Paramount

Changing an apartment name requires obtaining residents' consent and approval from the relevant local government.

When holding a management association meeting, consent from at least two-thirds of the unit owners is required (Article 15 of the Act on Ownership and Management of Collective Buildings). If the meeting is not held and the process is conducted only by written or electronic means, consent from at least four-fifths of the unit owners is necessary (Article 41 of the same Act).

Once the resident consent requirements are met, the necessary documents must be submitted to the local government for approval.

If a specific brand is newly added to the apartment name, the construction company's consent is also required.

There have been cases where all requirements for a name change were met, but the local government did not approve, leading to lawsuits. The case of Sinjeong New Town Lotte Castle is a representative example.