"Let's Unite" Sparks Conflict Between Complexes... Rekindling Reconstruction Failure [Emerging Integrated Reconstruction]

Alternative to Overcome Location Differences 'Jejarijaegeonchuk'
Rather Becomes a Spark for Breakdown
Hasty Integration Without Consensus Also Fuels Conflict

Editor's NoteReconstruction has entered a dark age. Many complexes are struggling due to sharply rising construction costs and selective contracting by construction companies. In this situation, integrated reconstruction is emerging as a trend in the maintenance industry. It is a method where individual complexes with a small number of households or insufficient business feasibility come together to reconstruct as one complex. By increasing the scale through integrated reconstruction, the value of apartments can also be enhanced. However, the industry predicts that there will not be many successful cases in reality, as the business feasibility varies by complex and there are many interests to coordinate. Communication between complexes is advised as the key to success. Asia Economy visits five places promoting integrated reconstruction in the maintenance industry to diagnose their current status and the direction of integrated reconstruction.

Recently, integrated reconstruction has become popular mainly in the first-generation new towns, but there are also cases where the project itself collapses due to differences in opinions between complexes. These are cases where business feasibility was secured through integrated reconstruction but the location differences could not be overcome, or integration was attempted prematurely.

The situation is no different in other areas promoting integrated reconstruction. The maintenance industry points out that as the number of members to persuade increases, reaching agreements by complex and by member, as well as accelerating the project, become more difficult, which is a limitation of integrated reconstruction.

Two Complexes in Front of Jeongja Station Clash Over In-Place Reconstruction

In Bundang, Seongnam-si, Gyeonggi Province, Sangnok Woosung and Sangnok Life, which were promoting integrated reconstruction, ultimately disbanded after failing to resolve conflicts over in-place reconstruction. In-place reconstruction is a method of integrated reconstruction where each individual complex is reconstructed and residents move back to their original location. When there are differences in location, in-place reconstruction is often chosen to speed up integration. However, disagreements over in-place reconstruction can become a spark for project failure, as seen with Sangnok Woosung and Sangnok Life.

The issue over in-place reconstruction arose due to proximity to Jeongja Station. Sangnok Woosung is closer to Jeongja Station than Sangnok Life. Although Sangnok Life is not far, residents must cross a 30-meter-wide road passing Sangnok Woosung. Sangnok Woosung insisted from the early stages of integration discussions to clearly include in-place reconstruction in the articles of association. On the other hand, Sangnok Life opposed this, causing tensions between the complexes from the beginning.

The conflict eventually escalated into a power struggle between the complexes. The starting point was a residents' briefing session held by Sangnok Life. At the briefing, the Sangnok Life Promotion Committee mentioned promoting integrated reconstruction despite incomplete agreement with Sangnok Woosung, which caused dissatisfaction among Sangnok Woosung owners. Furthermore, the Sangnok Life Promotion Committee distributed leaflets containing their position to each Sangnok Woosung household, leading to a flood of complaints and eventually the building manager filing a lawsuit against Sangnok Life.

The difference in complex size?Sangnok Woosung with 1,700 households and Sangnok Life with 700 households?also contributed to the conflict. When promoting integrated reconstruction through a union system, disputes arose over who would be the union president and auditor, the ratio of delegates, and voting rights. Residents of Sangnok Life said, "Because we have fewer households, Sangnok Woosung could make all decisions with their voting rights alone," and "There was a strong perception that we would be mere extras."

Pung, Seon, and Hyo in Imae-dong Made a Wrong Start

The Punglim (876 households), Seonkyung (370 households), and Hyosung (388 households) apartments in Imae-dong, Bundang, also started discussions amid the integrated reconstruction trend but ended up splitting after failing to untangle the complicated issues. Differences in location and confusion over the reconstruction promotion entities divided them.

Pung, Seon, and Hyo had reconstruction promotion committee heads for each complex, but the integrated reconstruction promotion committee head appeared first without fully organizing their stance on integration, which caused problems. Among residents, the need, understanding, and consensus on integration were insufficient, and the organization was formed prematurely, leading to misunderstandings.

The differences in each complex's position were significant. Location differences intensified conflicts. Looking at the locations, Hyosung Apartment is in the immediate vicinity of Seongnam Station on the GTX (Great Train Express) A line, while Punglim and Seonkyung apartments are adjacent beyond a major road. Hyosung wanted in-place reconstruction from the start, but the other two complexes had different views.

During discussions on the direction of integrated reconstruction, there was talk of building a GTX complex transfer center on the Hyosung site, which increased dissatisfaction among Hyosung owners. One resident said, "Compared to Punglim and Seonkyung, proposals unfavorable only to Hyosung kept coming, and after months of discussion, no conclusion was reached." Currently, Hyosung has shifted to pursuing individual reconstruction, while Punglim and Seonkyung continue with integrated reconstruction.

Individual and Integrated Reconstruction Coexist in Singil Woosung and Geonyeong

Singil Woosung 1st Complex (688 households) and Singil Geonyeong (386 households) also have two individual promotion committees and one integrated reconstruction promotion committee coexisting. The two complexes are adjacent, and residents freely move between them without distinguishing complexes. However, banners installed by the individual promotion committees and banners criticizing them by the integrated promotion committee were hung throughout the complexes. This is due to the lack of agreement on integrated reconstruction.

Moon Kwon-tak, chairman of the Integrated Reconstruction Promotion Council, pointed out, "Individual reconstruction may seem faster now, but moving in and completion must be quick. Reconstruction takes about 10 years, and although individual reconstruction may look faster in the short term, it cannot enjoy the benefits of integration and will inevitably falter."

The floor area ratios of the two complexes are 176% for Singil Woosung 1st and 186% for Geonyeong. The integrated promotion committee claims that integrated reconstruction can raise this to 360%. If individual reconstruction proceeds, each complex would have to place nine buildings on the same site, totaling 18 buildings, but integration would allow 9 buildings with 1,700 households, making the complex layout more pleasant. Geonyeong, located southeast of Woosung Apartment, cannot build high floors after reconstruction because it would infringe on Woosung's sunlight rights, which is a limitation of individual reconstruction.

Many prefer individual reconstruction for Woosung 1st due to the shape of the lots and other reasons. Moreover, Woosung 1st has already applied to Seoul City under the rapid integration planning advisory method. To switch to integrated reconstruction, they must collect and submit withdrawal consents. Residents recognize that integrated reconstruction is advantageous but hope the promotion entities quickly organize opinions and proceed with the project. A resident and owner of Woosung 1st said, "I don't want to take sides, but whoever leads, I hope integration happens so that a large complex brand construction company comes in, we pay less additional fees, and reconstruction proceeds quickly."