Jangwi 9 District in Seoul's Seongbuk-gu was selected as a candidate for public redevelopment in 2021, but the target for residents to move in is set for 2033. Even if the project proceeds as planned, it will take 12 years before new residents can occupy their homes. To accelerate the pace of public redevelopment, experts emphasize the need to address issues such as shortening approval processes, adjusting resident rights, coordinating construction costs, and securing relocation funds.
According to data from the Ministry of Land, Infrastructure and Transport, Jangwi 9 District will provide 2,270 housing units. The area was designated as a redevelopment zone at the end of 2023, with the Korea Land and Housing Corporation (LH) appointed as the project implementer in 2024. After selecting a construction company last year, an integrated review was submitted in September. The timeline includes receiving project approval in April 2024, management disposition approval in April 2028, and starting construction in June 2029, with completion and occupancy expected by March 2033.
Even after receiving project approval, residents must determine the housing units they will purchase and the costs they will incur, followed by relocation and demolition processes. This highlights the necessity for a project plan that residents can accept and implement, alongside administrative procedure reductions.
A comparison of public redevelopment plans across Seoul, conducted by Aju Economy using data from the Seoul City Maintenance Project Information and Seoul Plan+, revealed that the total supply plan for 27 public redevelopment sites amounts to 34,941 units. Among these, 24 sites, accounting for 32,407 units, are still in the pre-approval stage, representing 92.7% of the planned units. The analysis focused on sites where the number of planned units and project stages could be verified, excluding areas where selections were canceled.
The need for resident interest alignment is evident in the Ahyeon 1 District, where many owners faced cash settlements instead of receiving new apartments due to fragmented ownership. To reduce the number of cash settlement cases, the Seoul City government has developed a plan to provide minimum-sized housing units to small-scale owners, thus facilitating resident agreement on who can move into new homes.
Coordinating construction costs and resident contributions also presents challenges. If rising material and labor costs are not adequately reflected, construction companies may withdraw from projects, while increasing construction costs can lead to higher burdens for residents. In the Cheonho A1-1 District of Gangdong-gu, the bidding for a construction company failed twice last year, prompting an increase in the construction cost from 840,000 won to 860,000 won per 3.3 square meters this year. Subsequently, Daewoo Engineering & Construction was selected as the contractor in May.
A representative from a mid-sized construction firm noted, “If material and labor costs rise significantly during project delays and are not properly reflected, the losses will increase as construction progresses. However, if we raise construction costs to reflect these increases, residents will strongly oppose the additional contributions.”
Securing relocation funds is another variable. Last month, the government expanded interest support for public redevelopment project costs to include relocation expenses for residents. However, reducing interest rates and securing loans sufficient for housing deposits are separate challenges.
A construction industry representative stated, “Some sites are unable to secure relocation funds due to loan regulations. Mid-sized and small construction firms often struggle to guarantee additional relocation loans for residents, which could halt projects during the relocation phase.”
Yang Ji-young, a specialist at Shinhan Premier Pathfinder, remarked, “Seoul lacks new land for housing, so revitalizing redevelopment projects is essential to increase supply. For public redevelopment projects to progress to actual construction, improvements in project viability and concrete financial support for relocation costs are necessary.”
* This article has been translated by AI.
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