"Household Burden Cut by 170 Million Won"... First Case of Expanded Floor Area Ratio in Quasi-Industrial Zones: Samhwan Dobong (Comprehensive) [Real Estate AtoZ]

Samhwan Dobong Apartment Selected as First Site
Reborn as a 42-Story, 993-Unit Complex
Estimated Cost per Household Drops by 170 Million Won

The Seoul Metropolitan Government will raise the floor area ratio of Samhwan Dobong Apartment in Dobong-gu, which was built in a quasi-industrial area, to 343%. For the first time, the legal maximum floor area ratio of 400%, previously applied only to residential areas, will be expanded to quasi-industrial areas as well. As a result, the number of housing units that can be built in this complex will increase by about 1.5 times compared to before.

On September 4, the Seoul Metropolitan Government announced that it would expand the application of the legal maximum floor area ratio to quasi-industrial areas to revitalize redevelopment and reconstruction in these zones. This measure aims to boost the business feasibility of quasi-industrial areas, which have lagged behind due to a more restrictive floor area ratio system compared to residential areas.

Seoul Mayor Oh Sehoon is visiting the reconstruction site of Samhwan Dobong Apartment in Dobong-gu, Seoul, on the 4th, and talking with officials. Photo by Yonhap News

Samhwan Dobong Apartment in Dobong-gu was designated as the first site to which this policy will be applied. Completed in 1987, Samhwan Dobong Apartment is an aging complex with 660 units, built in a quasi-industrial area. Residents initiated the redevelopment plan in 2021. However, for three years, progress stalled due to lower land prices compared to other areas and a high existing floor area ratio of 226%.

With the easing of regulations, the floor area ratio for this apartment complex will be relaxed to 343%. As a result, it will be reborn as an apartment complex with up to 42 floors and 993 units. The increase in the floor area ratio will add 333 units compared to the original 660 units, and the estimated cost per household is expected to drop significantly from 430 million won to 260 million won.

Additionally, the city has introduced a new "business feasibility adjustment coefficient" to significantly enhance the project's viability. In areas where land prices are lower than the Seoul average, a higher coefficient will be applied, reducing the number of rental units and increasing the number of units for general sale.

Seoul Mayor Oh Sehoon, who visited the site on this day, stated, "We sought ways to significantly lower the cost burden per household," adding, "For Samhwan Dobong Apartment, we were able to increase the approval rate by reducing the cost per household to 260 million won."

He also forecasted a rapid reconstruction process for the complex. Mayor Oh said, "Currently, the district designation for Samhwan Dobong Apartment was completed in just one year and two months, showing how quickly the project is progressing," and added, "We have established a foundation for ultra-fast project execution so that, even at the association establishment or groundbreaking stages, the entire process, which used to take about 18 years and 6 months, can now be completed within 12 to 13 years."

The city plans to expand customized consulting and administrative support for other quasi-industrial area reconstruction complexes with similar conditions in the future. The application of the expedited integrated planning system will also accelerate project timelines.

Mayor Oh stated, "Reconstruction complexes in quasi-industrial areas that have faced difficulties in project implementation will gain significant momentum thanks to the easing of floor area ratio regulations," and added, "Samhwan Dobong Apartment is a leading model that has found a solution to the challenging business environment of quasi-industrial area reconstruction through Seoul’s relentless regulatory innovation efforts, and it will serve as a cornerstone for balanced development between the northern and southern parts of the city."