Reducing Reconstruction Project Duration by 3 Years... Additional 1.3x Floor Area Ratio Allowed in Station Area Zones [8·8 Supply Plan]

'Plans to Expand Housing Supply for National Housing Stability'
Simplifying Administrative Procedures for Redevelopment Projects to Advance Projects by 3 Years
Transit-Oriented Redevelopment in Type 3 Residential Areas, Floor Area Ratio up to 390%

The government will simplify administrative procedures to advance the redevelopment project period by up to 3 years. It plans to implement an integrated processing method that handles the basic plan and redevelopment plan simultaneously, and also establishes the project implementation plan and management disposition plan together. Additionally, for three years on a temporary basis, the floor area ratio for station-area redevelopment projects will be allowed up to 1.3 times the legal maximum.

On the 8th, the Ministry of Land, Infrastructure and Transport (MOLIT) announced these measures at the government Sejong office as part of the "Housing Supply Expansion Plan for National Housing Stability." Jin Hyun-hwan, the first vice minister of MOLIT, said, "Through this measure, we aim to supply sufficient housing in the preferred forms and locations desired by the public at an accelerated pace."

"Simplifying redevelopment procedures to advance by up to 3 years"

To speed up housing supply, MOLIT will simplify the redevelopment project process from seven stages?from basic plan establishment to completion?to five stages. By integrating the processing of the basic plan and redevelopment plan, as well as the project implementation plan and management disposition plan, the redevelopment project period is expected to be shortened by up to 3 years.

Vice Minister Jin said, "Reconstruction usually takes 14 to 15 years," adding, "With the relaxation of reconstruction safety inspections and the introduction of a fast track in the January 10th measures, the project period was shortened by 3 years, and with this new measure, the reconstruction period can be advanced by up to 6 years."

Establishing reconstruction associations will also become easier. The consent requirement for establishing reconstruction associations will be relaxed from 75% to 70%, and from half of the households in each building to one-third. Previously, only consent for forming the reconstruction promotion committee was counted toward the consent requirement, but going forward, requests for redevelopment zone designation and proposals for redevelopment plan establishment will also be considered as consent.

MOLIT will increase the number of integrated review subjects from six to eight to prevent delays in permits at the project implementation approval stage. Disaster impact assessments and fire performance design will be added as new integrated review subjects. The number of permit agenda items will increase from 19 to 21, with special building zone designation and consultation on facilities for the disabled newly added. At the management disposition approval stage, it will be possible to apply for feasibility verification before the management disposition plan upon association resolution.

Floor area ratio for station-area projects raised from 1.2 to 1.3 times the legal maximum... Rental housing supply ratio also eased

MOLIT will temporarily raise the floor area ratio for station-area redevelopment projects to up to 1.3 times the legal maximum for three years. The current allowance of up to 1.2 times will be increased to 1.3 times. For general redevelopment projects, the floor area ratio will be raised up to 1.1 times the legal maximum. For example, in a Category 3 residential zone, the floor area ratio for station-area redevelopment projects will increase from 360% to 390%, and for general redevelopment projects from 300% to 330%. However, projects that applied for project plan approval before the 8th will not be subject to this floor area ratio increase.

Vice Minister Jin said, "Recently, many redevelopment projects have been delayed because the project process was reversed to increase the floor area ratio," adding, "This measure will temporarily relax the floor area ratio to prevent such delays and accelerate redevelopment projects."

Also, starting next month, the mandatory rental housing supply ratio related to floor area ratio increases in Seoul redevelopment projects will be eased. The easing ratio will vary by project considering project feasibility. For Category 3 residential zones subject to a 300% floor area ratio, the mandatory rental housing supply ratio may be reduced from 25% to as low as 15%. Additionally, the park and green space securing standard will be raised from a minimum of 50,000 square meters to 100,000 square meters.

MOLIT is promoting the enactment of the "Reconstruction and Redevelopment Promotion Act" to implement these regulatory relaxations. Vice Minister Jin said, "We will cooperate with the National Assembly to pass the Promotion Act for redevelopment projects," and added, "We expect no disagreement between ruling and opposition parties regarding accelerating reconstruction."

Payment of redevelopment association contributions possible via housing pension

In addition, MOLIT will allow individual withdrawals from housing pensions for the purpose of paying association members' contributions. This is in response to the increased burden on members due to rising construction costs. The existing individual withdrawal limit of 50% will be raised to 70% when paying contributions.

The public guarantee scale of the Housing and Urban Guarantee Corporation (HUG) will also increase from 10 to 15 trillion won to 20 trillion won. The maximum guarantee limit will rise from 5 billion won to 6 billion won. Additional guarantees will be provided within 60% of the total project cost for additional loans due to construction cost increases. Also, single-home association members will receive up to a 40% acquisition tax reduction by local government ordinance if the sale price of reconstructed apartments outside regulated areas is 1.2 billion won or less.

Meanwhile, MOLIT will disclose the basic plan for the first-generation new towns this month and select lead districts with more than 26,000 households by November. In the second half of this year, it will also begin establishing basic plans for aging planned cities in six regions including Busan and Incheon.