Shinwol Siyeong, Mokdong New Town, and Others Hold Briefings
Urgently Collecting Consent Forms to Designate Redevelopment Zones
"Now Is the Right Time to Promote Reconstruction as Housing Prices Fall"
[Asia Economy Reporter Onyu Lim] In January, a cluster of reconstruction apartments in Yangcheon-gu, Seoul, which passed safety inspections, are racing to be designated as maintenance zones. Every weekend, large halls and churches host briefings for each complex, creating a remarkable scene where residents with graying hair are studying diligently. They view the real estate downturn, with relaxed government regulations, as an optimal time to push forward reconstruction projects and are competitively gathering consent forms. Yangcheon-gu has also established the 'Urban Development Promotion Team' to provide support.
According to the real estate industry on the 12th, Sinwol Siyoung Apartments held a reconstruction project briefing at Seoul Central Church the day before. Thanks to the government's easing of safety inspection regulations, this complex was finally confirmed for reconstruction last month along with Mokdong New Town complexes 3, 5, 7, 10, 12, and 14. Built in 1988, it has long exceeded the 30-year reconstruction eligibility period and consists of 2,256 households.
On the same day, Mokdong New Town Complex 12 held its second reconstruction briefing at Haenuri Town. This was targeted at owners who could not attend the first briefing held on the 14th of last month. Additionally, on the 9th, Mokdong New Town Complex 13 held a fundraising general meeting at Yangcheon Cultural Center. Mokdong New Town Complex 8 already held a briefing on the 28th of last month.
The reason they are busily holding briefings one after another immediately after passing the reconstruction safety inspection is to raise funds for project progress and to collect consent forms for establishing maintenance plans. For reconstruction to proceed, after passing the detailed safety inspection, a maintenance plan must be established and the area designated as a maintenance zone, which requires consent from 60% of the owners. Generally, reconstruction proceeds in the order of safety inspection → designation of maintenance zone → establishment of promotion committee → establishment of association → selection of construction company → approval of project implementation → approval of management disposition plan → relocation and demolition → groundbreaking and sale.
Although project progress is accelerating, the real estate market in Yangcheon-gu remains sluggish. According to the Korea Real Estate Board, apartment sale prices in Yangcheon-gu have cumulatively fallen by 1.15% this year. While the situation is better than in other areas, many places are designated as land transaction permission zones, resulting in sparse transactions and significant shocks whenever a decline transaction occurs. On the 4th, a 55.02㎡ unit in Mokdong New Town Complex 14 sold for 929 million KRW. In December last year, the actual transaction price was 1.03 billion KRW, meaning it dropped by 100 million KRW in two months.
However, some apartment owners in Yangcheon-gu, who are enthusiastic about reconstruction, see the real estate downturn as an ideal time to push the project forward. During the previous government’s real estate boom, they were stuck in safety inspections and wasted time, but now, with regulatory easing, they can overcome that barrier. A reconstruction promotion official from Mokdong New Town said, "We must make significant progress while the government is supportive," adding, "Although it is a downturn now, considering the real estate cycle, the market could rise again by the time residents move in."
To match this reconstruction enthusiasm, Yangcheon-gu has also stepped up support. Last month, it established the Urban Development Promotion Team directly under the district mayor. This team will exchange information and consult with related organizations such as the Ministry of Land, Infrastructure and Transport and Seoul City, while strengthening its role as a communication channel between residents and the government to reduce unnecessary conflicts. A Yangcheon-gu official explained, "The Urban Development Promotion Team will serve as a driving force to ensure redevelopment and reconstruction projects proceed smoothly."
Ministry of Land, Infrastructure and Transport Announces Special Act on Maintenance and Support for Aging Planned Cities [Image Source=Yonhap News]
Meanwhile, the government recently announced plans to designate aging planned cities over 1 million square meters, completed more than 20 years ago, as special maintenance zones to support systematic redevelopment. If areas such as Mokdong, Sinjeong-dong, and Sinwol-dong are designated, the project progress could accelerate. Special maintenance zones benefit from eased or exempted safety inspection regulations and increased floor area ratios through zoning upgrades. Upgrading from a Type 2 General Residential Area to a Type 3 General Residential or Semi-Residential Area can increase the floor area ratio up to 300%, and in some areas like station zones, up to 500%, allowing for high-rise buildings.
However, on-site voices suggest that since several Mokdong New Town apartment complexes have already passed reconstruction safety inspections, the benefits from the special law may be limited. A representative from a Mokdong real estate agency said, "Except for complexes 9 and 11, all Mokdong New Town apartments have passed reconstruction safety inspections," adding, "Most are Type 3 residential areas, so the increase in floor area ratio will not be significant." In Mokdong, since district unit plans are already established, there are concerns that re-designating the area as a special maintenance zone could delay the project.
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