Songpa-gu Proposes Improvements to Local Housing Association System to Prevent Resident Harm

Seoul City Proposes 'Complete Abolition or Revision of Regional Housing Association System' to Prevent Resident Damage
▲Abolish Member Recruitment Reporting Procedure ▲Change Member Qualification Criteria ▲Revise Association Establishment Approval Standards
▲Establish Regulations for Authority to Cancel Association Sunset Provisions, etc. System Changes

Seok Sang-seok, Mayor of Songpa District

Songpa-gu (Mayor Seo Gang-seok) is taking steps to improve the system to prevent damages to members caused by local housing cooperatives.

On the 18th, it announced that it has submitted opinions to Seoul City to either completely abolish or revise the local housing cooperative system.

The local housing cooperative project is a system designed to help homeowners (with exclusive area under 85㎡) and low-income residents without homes in a certain area secure housing. While it offers the advantage of acquiring housing at a relatively lower cost than general apartments, many victims have suffered due to operational corruption by the cooperative, which acts as the project implementer, or delays in land acquisition.

The district explained that the local housing cooperative system has become a system far removed from its original purpose, causing project delays or cancellations, resulting in increasing cases where members suffer material and psychological damages, making system improvement urgent.

Accordingly, Songpa-gu plans to prevent damages to members through either ▲complete abolition of the local housing cooperative system or ▲proposals for insufficient system improvements.

First, it proposed abolishing the member recruitment reporting procedure. The ‘member recruitment reporting’ procedure often leads to members being harmed because, before the cooperative establishment approval, the recruiting party exaggerates the project progress or induces membership through false information such as half-price sales at an uncertain stage of project promotion. The district proposed abolishing the ‘member recruitment reporting’ procedure and improving the system to promote the project from the cooperative establishment stage.

Next, it proposed changes to the qualification criteria for members. Unlike redevelopment or reconstruction projects that start after securing land, local housing cooperatives plan and promote projects without securing ownership of the project site, frequently causing delays due to conflicts with landowners within the project area during the ownership acquisition process.

Therefore, the district suggested improving the criteria to allow priority recruitment by granting membership qualifications to land or housing owners and tenants within the project area to facilitate land ownership acquisition, and additionally allowing recruitment of non-homeowners as of the cooperative establishment approval application date.

It also proposed changes to the cooperative establishment approval criteria. Under the current system, members are recruited before land purchase and project plan approval are completed, making the final contribution amount unclear and potentially causing additional contributions.

In particular, with only 80% or more land use rights and 15% or more ownership at the time of cooperative establishment approval, securing land ownership until project plan approval is difficult, increasing the likelihood of project delays or cancellations.

The district explained that it aims to increase the success rate of project promotion by expanding and strengthening the land ownership acquisition ratio at the time of cooperative establishment approval.

Finally, it proposed establishing regulations for the discretionary cancellation of the cooperative’s sunset provisions. Current housing laws do not mandate the holding or frequency of general meetings, allowing projects to be indefinitely delayed and damages to spread. Therefore, it proposed measures to establish discretionary cancellation regulations for failure to hold general meetings or non-compliance with the required number of meetings.

Seo Gang-seok, Mayor of Songpa-gu, stated, “Since eight local housing cooperative projects are underway in the area, we have actively proposed to Seoul City either the complete abolition of the current system or improvements to the legal requirements at each project stage to prevent resident damages caused by the current system’s problems.” He added, “We hope that this revision proposal will prevent further damages related to local housing cooperative projects.”