Gyeongwoohyeon Committee Chair Election in Gaepo: The Key Issue Is the "Independent Settlement System" [Real Estate AtoZ]

Candidates Offer Different Solutions for the Independent Settlement System
Two-Day Election on January 23-24 Draws Attention to the Outcome

The election for the head of the integrated reconstruction committee for Kyungnam, Woosung 3rd, and Hyundai 1st (collectively known as Gyeongwoohyeon), which is considered the final piece of the Gaepo-dong reconstruction puzzle in Seoul, is now just three days away. As candidates are presenting different solutions regarding the independent settlement system among Kyungnam residents, there is growing interest in the outcome of the election.

Exterior view of Gaepo Gyeongnam Apartment. Photo by Jinju Han

According to the maintenance industry on January 21, the election for the head of the Gyeongwoohyeon integrated reconstruction committee will be held on January 23 and 24. The race has solidified into a two-way contest between Lim Byung-eop, head of the integrated reconstruction committee, and Yoo Byung-chul, president of the Gyeongwoohyeon Reconstruction Council.

Kyungnam, Woosung 3rd, and Hyundai 1st are three complexes adjacent to Yangjaecheon, completed in 1984, with a total of 1,499 households. Hyundai 1st was designated as a maintenance area first in 2017, and since 2018, the integrated reconstruction project has included Kyungnam and Woosung 3rd. Gyeongwoohyeon was officially designated as a maintenance area in June last year, and after reconstruction, up to 49 stories and 2,343 households are planned.

Although the first step toward integrated reconstruction has been taken, the independent settlement system-where each complex’s owners settle profits and costs among themselves-has emerged as a key issue.

There are especially significant differences of opinion within Kyungnam Apartment. Gaepo Kyungnam consists of 678 households in total, divided into Phase 1 (six buildings, up to 12 stories, 408 households) and Phase 2 (three buildings, up to 15 stories, 270 households).

Exterior view of Gaepo Hyundai Apartment. Photo by Jinju Han

Residents of Kyungnam Phase 2 insist that the three complexes should adopt the independent settlement system, as originally agreed in the first integrated reconstruction proposal in 2018. At the end of last year, residents demanded, through the 'Gyeongwoohyeon Integrated Reconstruction Resolution Agreement,' the implementation of an independent settlement system including Phase 1, in-place reconstruction (reoccupying apartments built on the land where their complex is located), and compliance with site boundary lines. They also warned that if these resolutions are not upheld, they will not cooperate in meeting the requirements for reconstruction consent by building during the association establishment phase.

The reason Kyungnam Phase 2 residents are demanding an independent settlement system by complex, including Phase 1, is due to the difference in floor area ratios. Kyungnam Phase 2 has a floor area ratio of 204%, higher than Phase 1's 158%. Even for the same unit size, Phase 1 reportedly has a larger land share. A higher floor area ratio generally means lower profitability in reconstruction. Therefore, they argue that settlement should be conducted together with Phase 1 to offset differences in business feasibility.

This issue is also a point of contention between the committee head candidates. The integrated committee supports the position of Kyungnam Phase 2 residents, while the reconstruction council believes that Phases 1 and 2 should be separated.

A representative from the integrated committee stated, "An independent settlement system dividing Kyungnam Phases 1 and 2 is impossible. While it may be possible if all owners agree, we do not believe this is the right premise," adding, "Since Kyungnam is a single parcel of land and belongs to one district unit planning area, we believe property rights and other matters should be resolved within the current legal framework."

A representative from the reconstruction council explained, "We have received confirmation from the Gangnam District Office and a law firm that an independent settlement system dividing Kyungnam Phases 1 and 2 is possible. All that is needed is resident agreement," adding, "We will adjust the proportional rates according to each complex's floor area ratio and, once the analysis of land share rights is complete, we will persuade the residents."