Increase in Units Allowed Equal to Number of Publicly Sold Homes
Effectively Raises Total Units by 20%
Stringent Safety Regulations Pose Obstacles
Excessive Liability Placed on Structural Reviewers
The government has decided to apply the '1+1 sale' system, which allows large units to be split and sold as two separate households, to remodeling projects as well. However, questions have been raised about its effectiveness. While the intention is to increase housing supply by dividing existing units, experts in the field anticipate that the strict safety review standards and the issue of obtaining consent from owners will make actual implementation difficult.
According to the Ministry of Land, Infrastructure and Transport on September 17, from now on, remodeling projects will also allow large units (with an exclusive area of 85 square meters or more) to be divided into two or more households for general sale, thereby increasing the total number of units by the number of new sales. The government announced this measure as part of its 'Housing Supply Expansion Plan' on September 7.
However, the increase in the number of units is limited to 5% of the existing number of households. Considering that the current Housing Act allows a maximum increase of 15% in the number of units through remodeling, this means the total can be raised by up to 20%. For example, if there were originally 1,000 units, remodeling could previously increase this by 15% to 1,150 units. Now, with the addition of 50 general sale units (5%) created by splitting large units, the total can reach up to 1,200 units.
There are expectations that this will improve the profitability of remodeling projects. If the number of general sale units increases through the 1+1 sale system, the financial burden on small unit owners will decrease, which could enhance overall project viability. From the government's perspective, splitting one large unit into two small units will also help increase the housing supply. Previously, the 15% cap on the increase in the number of units through remodeling made it difficult to apply the 1+1 sale system. Small unit owners, in particular, had objected, arguing that only large unit owners benefited from the increase in the number of units.
However, there are also concerns that the institutional foundation needed to support the 1+1 sale system is weak, making actual application difficult. Excessive structural review regulations and design limitations under the Housing Act are significant obstacles, and it is expected that few associations will choose this approach. Specifically, if an apartment building with one large unit per floor is remodeled to create two small units per floor, the entire building must be converted. If only certain floors that agree to 1+1 remodeling are split, the load distribution will differ by floor, potentially compromising structural safety.
Ultimately, all households in a building must consent to 1+1 remodeling for the project to proceed. The Housing Act requires at least two-thirds of all owners and more than 50% of each building's owners to agree to remodeling. However, for 1+1 remodeling, 100% consent from residents in buildings with large units is required to move forward. An industry insider stated, "If you only split the number of units on a single floor, the structural layout becomes inconsistent and chaotic across floors," adding, "It will not be easy to reach a consensus, as each owner's interests are different."
In particular, since in-depth reviews of structural safety are required for 1+1 remodeling, and the penalties for those responsible are severe, it is expected to be difficult to implement in practice. The current Housing Act stipulates that if a technical review committee member fails to properly assess compliance with structural standards and causes harm to residents, they may face up to one year in prison or a fine of up to 10 million won.
Shin Dongwoo, president of the Korea Remodeling Convergence Association, said, "Technical experts should, of course, be held accountable if they fail to fulfill their duties. However, imposing criminal liability for compliance with design standards on review committee members is excessive," adding, "While the review obligations have been strengthened, the penalties are too harsh and could become an obstacle to project implementation."
He added, "Given that more extensive structural changes would be required under stricter safety review regulations, I doubt there will be many sites that choose 1+1 remodeling," and "If the goal is to expand supply through remodeling, easing safety regulations on vertical extensions should come first."
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