Seoul Says Adjustment Coefficient Improves Redevelopment Feasibility and Eases Regional Disparities

Average of 47 Additional Saleable Units per District
95% of 57 Beneficiary Districts Located in Gangbuk and the Southwestern Area

It has been found that the business feasibility adjustment coefficient currently being implemented by the Seoul Metropolitan Government has been applied to a total of 57 urban renewal project sites in just one year, resulting in an average increase of 47 saleable housing units per district. The city explained that most of the beneficiary districts are concentrated in the Gangbuk (northern) area and the southwestern area, thereby narrowing the gap in business feasibility between regions.

According to the city on February 25, 95% of the 57 districts that benefited from the business feasibility adjustment coefficient are concentrated in Gangbuk (30 districts) and the southwestern area (24 districts).

The business feasibility adjustment coefficient is a system designed to enhance the business feasibility of areas where it is difficult to expect sufficient sales revenue, by allowing the maximum floor area ratio to be raised by up to two times after taking into account factors such as land prices, the size of existing housing, and the degree of overcrowding. The city introduced the system through the revision of the "2030 Urban and Residential Environment Improvement Master Plan" in September 2024 and has fully implemented it since last year.

The city stated that the business feasibility adjustment coefficient has shown particularly strong effects in terms of balanced regional development. In the 57 complexes that have so far passed the Urban Planning Committee review, the number of general sale units has increased by an average of 47 units, which has led to a reduction in the financial contributions required from association members.

In particular, in the case of the reconstruction of the Banghak Sindae 1st Complex in Dobong-gu, the application of a business feasibility adjustment coefficient of 2.0 expanded the allowable floor area ratio incentive from 20% to 40%. As a result, the number of saleable units is expected to increase by 148 households, and the contribution burden per association member is estimated to decrease by approximately 38 million won.

The city projected that the number of complexes benefiting from the business feasibility adjustment coefficient will surge, as the reconstruction of complexes within the Sanggye (Phase 1 and 2), Junggye, and Junggye 2 housing development districts in Nowon-gu, for which the district unit plan readjustment was completed in December last year, is expected to be promoted in earnest starting this year.

Choi Jinseok, Director-General for Housing at the Seoul Metropolitan Government, said, "The business feasibility adjustment coefficient system, which we devised after much consideration to resolve blind spots in urban renewal, is becoming a breakthrough for renewal projects in Gangbuk and the southwestern area," adding, "Along with improving business feasibility, we will carry out meticulous fairness and process management throughout the entire renewal project process and concentrate all administrative capacity to ensure that housing can be supplied to citizens in a timely manner."

Meanwhile, the city has enhanced project predictability this year by announcing the "average officially assessed land price for 2025," which serves as the basis for calculating the adjustment coefficient, at approximately 8.04 million won for reconstruction projects and approximately 6.3 million won for redevelopment projects.