"Talks with financial authorities yielded no response"
Both single-home and multiple-home owners eligible for support
As discussions with financial authorities on easing regulations for relocation loans failed to make progress, the Seoul Metropolitan Government has stepped in with direct support. On the 26th, the city announced a plan to accelerate the start of construction for redevelopment and reconstruction projects totaling 85,000 housing units over the next three years, and said it will provide relocation support worth 50 billion won this year.
On this day, Choi Jinseok, Director General for Housing Policy at the Seoul Metropolitan Government, met with reporters after the "Announcement on the Rapid Start of Construction for 85,000 Housing Units to Resolve the Supply Drought and Overcome the Impact of Regulations" held at Seoul City Hall and said, "We have repeatedly urged the central government to ease regulations related to relocation loans, but have not received a concrete response," adding, "We decided to push ahead based on the judgment that the Seoul Metropolitan Government should directly support at least the most urgent parts."
The Seoul Metropolitan Government will provide relocation loan support by allocating 50 billion won from the Housing Promotion Fund this year for project sites that face difficulties in raising funds at the final stage of redevelopment projects, namely the "relocation phase." Applications will be accepted in March, three project sites will be selected in April, and the funds will be executed by May.
Until now, the Seoul Metropolitan Government has been requesting cooperation from financial authorities, arguing that project schedules are being delayed due to regulations on relocation loans. Visiting a redevelopment site last month, Seoul Mayor Oh Sehoon said, "A survey of 43 areas scheduled for relocation found that 39 areas (about 31,000 households) are experiencing setbacks in securing relocation funds due to loan regulations," and called for regulatory adjustments, including raising the loan-to-value (LTV) ratio for relocation loans to 70%. In contrast, financial authorities are said to be maintaining the position that, when viewed comprehensively, including jeonse loans, the burden is not excessive.
The relocation support will cover all categories of residents, including owners of multiple homes, owners of a single home, and those without a home. Director General Choi explained, "Given the limited budget, this will serve as a way to reduce the burden of relying on high-interest support from construction companies," adding, "We will also review ways to secure additional budget going forward."
Together with relocation support, the Seoul Metropolitan Government will also push ahead with six additional support measures: the introduction of electronic general meetings for swift decision-making; advisory support for drafting demolition plans; integrated reviews of structural and excavation plans just before construction begins; clarification of the timing of relocation, demolition, and commencement of construction; consulting on construction change contracts; and automatic notifications of project implementation schedules. Through this, the city plans to expand the three-year construction-start target under its original plan to supply 310,000 housing units by 2031, increasing the number from 79,000 to 85,000 units, an additional 6,000 units.
Mayor Oh Sehoon, who attended the announcement, stressed, "Under the clear goal of expanding supply, we will strongly call for regulatory easing so that the voices from the field can be reflected in policy," adding, "If necessary, we will boldly readjust the budget to further expand relocation support."
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