The South Korean government and Seoul city are at odds over housing supply solutions. While they agree on the need to utilize industrial areas and transit zones, they differ on the supply entities and development methods.
According to reports from the government and Seoul city, President Lee Jae-myung expressed concerns during a national discussion on real estate policy on July 23, stating that it is difficult to find new land for housing in Seoul. He questioned the housing supply effects of redevelopment and reconstruction projects, noting, "While reconstruction can increase the number of households, it does not seem to significantly increase the total number of units, but rather the size of the units. In redevelopment, it seems common for the total number of households to decrease."
Seoul Mayor Oh Se-hoon countered the following day, acknowledging the reality that there is no more land to build homes in Seoul, but he rejected the notion that the supply effects of redevelopment and reconstruction are negligible. He claimed that through the city's ongoing redevelopment projects, more than 310,000 housing units are expected to break ground by 2031, with a net increase of about 87,000 units once all projects are completed.
The gap between the two sides was evident during a private meeting on July 24 between Minister of Land, Infrastructure and Transport Kim Yoon-deok and Mayor Oh. The ministry is discussing plans to increase housing in the Yongsan International Business District to around 10,000 units, while Seoul's current plan stands at 6,000 units. The city insists that considerations for international business functions and infrastructure such as schools and transportation must be taken into account, and they did not reach an agreement on the supply scale that day.
On the other hand, both sides align on increasing housing supply through the repurposing of industrial areas and the utilization of vacant land. During the discussion, it was suggested that underutilized industrial and commercial areas should be converted to mixed-use residential and industrial purposes, and that the conversion of non-residential land to residential use should be expanded based on public contributions. President Lee responded positively to a proposal to convert vacant knowledge industry centers and commercial spaces into residential facilities for public rental by the Korea Land and Housing Corporation, stating, "We will expedite this process."
Seoul is currently pursuing projects to increase the residential floor area ratio in industrial areas that have already been converted to residential use, allowing for up to 400% increases. The city is working on projects in 32 locations that could yield approximately 27,000 housing units. Areas that still retain industrial functions will be enhanced as high-tech industrial and business hubs, while residential areas will see increased supply through redevelopment and mixed-use development. However, since many of these projects involve redevelopment and reconstruction, Seoul views the utilization of industrial areas as part of a broader strategy for high-density urban development, contrasting with the government's focus on selective conversion of underutilized non-residential land.
Transit zones also represent common ground. President Lee announced plans to prioritize high-quality long-term rentals in transit areas for middle-class families, similar to public housing. Seoul is expanding transit-oriented development across the city, incentivizing private mixed-use development in exchange for securing long-term rental housing and infrastructure.
Based on the president's statements and discussions from the forum, the government appears to emphasize selective supply and public rentals, such as the conversion of underutilized non-residential facilities and long-term rentals in transit areas. In contrast, Seoul focuses on enhancing the viability of private redevelopment projects and mixed-use developments while securing a portion of the profits for long-term rental housing and infrastructure.
As concerns about housing shortages in Seoul grow, experts suggest that regular consultations between the government and the city are necessary to align on target sites, development density, and public contribution standards. Ko Jong-wan, from the Korea Asset Management Institute, stated, "Looking at Taereung, the Yongsan Maintenance Depot, and the Gwacheon Racecourse, a regular consultation body between the central government and local government is needed, especially for the Ministry of Land and Seoul to meet once a month."
* This article has been translated by AI.
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