Reform of the Pre-Negotiation System for Development Sites Over 5000㎡
Seoul City announced on the 19th that it has revised the 'Pre-Negotiation System' to provide floor area ratio (FAR) incentives up to 330 percentage points, the legal maximum, in order to increase innovative design buildings and tourism accommodation facilities.
The Pre-Negotiation System is a system where the private and public sectors consult in advance to secure the validity of urban planning changes and the public interest and rationality of development when a private developer develops a site of 5,000㎡ or more. The purpose is to simultaneously promote development activation and balanced urban development by enhancing the business feasibility of private developers through zoning upgrades, while receiving part of the development profits as public contributions.
Until now, the Pre-Negotiation System operated within the maximum FAR limits set by the urban planning ordinance, allowing zoning changes such as from residential to commercial areas, but there were no additional incentives exceeding the legal maximum. However, the city viewed these limitations as obstacles to activating innovative architectural designs and eco-friendly certified buildings, which generally require relatively higher construction costs. Higher FAR allows for high-density development, thereby increasing profitability.
To address this, the city has newly established three incentive categories within the Pre-Negotiation System: ▲ Architectural Innovation Incentive ▲ Carbon Zero Incentive ▲ Tourism Accommodation Incentive, and will apply them to projects undergoing new pre-negotiations. When these incentives are applied, exceptions to the maximum FAR incentives are allowed, but 60% of the increased FAR's land value will be reclaimed as public contributions.
In the architectural innovation category, project implementers who propose innovative architectural designs and receive approval for their appropriateness can receive up to 110 percentage points of maximum FAR incentives. The target sites will be designated as Special Architectural Zones, and incentives will be applied differentially according to compliance with the 'Seoul Creative Innovation Design Guidelines.' The incentive level will be determined through the Architectural Committee review.
In the carbon zero category, sites subject to pre-negotiation that apply ZEB (Zero Energy Building) certification, green building and energy efficiency certifications, or plans for using recycled building materials will receive up to 60 percentage points of maximum FAR incentives. The incentive level will be calculated using the formula applied in Seoul’s district unit plan establishment standards and finalized through the Urban Architecture Joint Committee review.
In the tourism accommodation category, sites introducing tourism accommodation facility uses in pre-negotiations will receive up to 160 percentage points of maximum FAR incentives. This measure aims to expand the supply of tourist hotels in preparation for an annual target of 30 million overseas tourists. The incentive level will be decided through the Urban Architecture Joint Committee review based on Seoul’s district unit plan establishment standards, considering the appropriateness of infrastructure and architectural plans in harmony with the surrounding urban landscape.
Incentives from each category can be applied cumulatively. When all three categories are applied, the maximum FAR can be relaxed by up to 330 percentage points.
For example, when the zoning changes from Type 2 General Residential Area to General Commercial Area through the Pre-Negotiation System, the FAR previously could not exceed the legal maximum of 800%, but with the cumulative application of the three incentive categories, it can increase up to 1,116%.
Hong Seon-gi, Director of Future Space Planning at Seoul City, said, "We will reduce the burden on the private sector while enhancing public interest so that Seoul can transform into an eco-friendly, attractive, and tourism city and leap forward as a global top 5 city."
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