Gongjak Apartment Residents Outraged Over 'Small Unit-Focused' Reconstruction... Rift Between Trust Company and Owners

KB Real Estate Trust and Owners in Conflict
Increase in Number of Small Units
Removal of High-Floor Allocation Guarantee for Owners
Protests Over Unilateral Design Changes Without Consent

The Gongjak Apartment complex in Yeouido, Seoul, has been thrown into turmoil over changes to its integrated review design plan. The project developer, KB Real Estate Trust, revised the design to increase the number of small-sized units and distribute them across all apartment floors. Owners have begun the process of dismissing the reconstruction project’s operations committee members, claiming that the design was unilaterally changed to increase the number of 'non-preferred types' without any notice to residents.

According to Asia Economy’s reporting on June 27, among the 358 Gongjak Apartment owners, 89 households recently submitted a petition demanding the dismissal of the operations committee chair and the committee itself. Before submitting the petition, these owners also formed the 'Gongjak Apartment Normalization Promotion Group (Gongchuwi).' One owner, identified as A, stated, "KB Real Estate Trust changed the design unilaterally without gathering owners' opinions," and added, "We only learned belatedly that the revised design had been submitted to Yeongdeungpo District Office at the end of last year and that the integrated review is currently underway."

The residents are pursuing a 'trust-based reconstruction' model, in which no cooperative is established and only an operations committee is formed, with a professional trust company overseeing the project. KB Real Estate Trust is managing the entire project, and since the maintenance plan was approved in 2022, the integrated review is now in progress. The construction company is Daewoo E&C.

Removal of High-Floor Allocation Guarantee for Owners... Small Units Distributed on All Floors

Residents have two main complaints about the revised plan. First, the clause guaranteeing high-floor allocation for owners has been removed. The original design, confirmed at a general meeting in 2023, stipulated that owners would be assigned to floors above the 16th, while small-sized units (25 pyeong, exclusive area 59m²) would be concentrated on the lower floors. KB Real Estate Trust later changed the design to distribute 59m² units on every floor of Building 101, removing the high-floor allocation guarantee for owners. This revised plan was submitted to Yeongdeungpo District Office at the end of last year. Owner A lamented, "Large units are being moved from high to low floors, and small units are being placed on higher floors, making it inevitable that owners who want a larger or similar-sized unit as before will now be assigned to lower floors."

The trust company explained that this was an unavoidable change in accordance with Seoul City’s social mix policy. A KB Real Estate Trust official stated, "When we first applied for the integrated review, we submitted a design plan that concentrated most of the 59m² rental units on the lower floors," and added, "Later, during the approval process, Seoul City advised us to address the irrationality of floor-by-floor social mix." According to the design plan, there will be a total of 80 rental units in Gongjak Apartment, with a maximum size of 37 pyeong or less.

Number of Small Units Increases by 61... Complaints Over Rise in Non-Preferred Types

The sharp increase in the number of small-sized units is also seen as a problem. The original design submitted by Daewoo E&C during the bidding process planned for 63 units of 25 pyeong (exclusive area 59m²) and 191 units of large-sized units of 41 pyeong or more. Later, KB Real Estate Trust increased the number of 59m² units to 141 and reduced the number of large units to 124. In response to some residents’ protests, a third design plan was presented, reducing the number of 59m² units to 124.

Owner A argued, "Even with the third design, the proportion of non-preferred types, such as mid-to-large units on lower floors and small units on higher floors, has increased significantly," and added, "According to the original Daewoo E&C design, the proportion of non-preferred types was 15%, but in the third design plan, it has risen to 40%."

In response, KB Real Estate Trust stated, "The increase in small-sized units is unrelated to sales revenue," and explained, "The rise in the number of 59m² units resulted from adjustments to the special evacuation stairwell structure, which led to certain lines on lower floors being composed of small-sized units."

Experts define the current controversy as a conflict arising from both the trust company’s lack of transparent information disclosure and the requirements of the social mix guidelines. Kim Jaekyung, head of Toomee Real Estate Consulting, stated, "This issue is largely due to the trust company’s lack of communication and the process of meeting social mix standards," adding, "When small-sized units and rental housing are not concentrated in certain areas, there can be a mismatch between owners’ expectations and the actual design, leading to concerns about reduced profitability and increased internal conflict among owners."