The government is promoting an increase in floor area ratios and financial support for public redevelopment projects, yet some candidate sites are being canceled due to disagreements among residents. Although there are benefits to expanding development, differing expectations and burdens among property owners are hindering participation.
According to information from the Seoul city maintenance project database, the Geumho 23 area in Seongdong-gu and the 305 area in Yeonkeun-dong, Jongno-gu, have had their selections as public redevelopment candidate sites canceled. These areas were designated as candidates in March 2021 and August 2022, respectively. The Seoul city government announced last December that it would cancel the projects due to high levels of resident opposition.
Public redevelopment involves public institutions like LH and SH participating in long-stalled maintenance projects. In exchange for ensuring public benefits such as the supply of rental housing, the government offers incentives like relaxed floor area ratios, loans for project and relocation costs, and support for permits. President Lee Jae-myung visited the Jangwi 9 area in Seongbuk-gu the day before, urging for enhanced incentives such as increased floor area ratios and financial support to expedite the projects.
In the Geumho 23 area, there were conflicting interests between residential property owners and commercial property owners along the main road. Residents aiming to improve their living environment and property values had different perspectives from owners prioritizing rental and business income from existing shops.
Lee Jae-guk, chair of the Geumho 23 private urban complex development preparation committee, stated, “When there are conflicts among owners, private construction companies try to mediate, but government officials have made relatively less effort.” He believes SH should have actively proposed alternatives to reconcile differing positions rather than merely explaining the project.
Judgments about development profits also influenced the choice of project methods. Lee noted that the benefits from the increased floor area ratio in public redevelopment are insufficient for residents, prompting a search for private urban complex development. However, actual benefits must be assessed by comparing project plans that reflect applicable floor area ratios, public contributions, and construction costs.
In the Yeonkeun-dong 305 area, concerns were raised about the burdens of relocation and resettlement. Some residents expressed that elderly owners would struggle to find housing during the project and could not afford the costs associated with re-entry. Conversely, supportive residents argued that improvements were necessary for aging homes, which frequently incur repair costs and have inadequate access for fire trucks.
Last August, Jongno-gu released a maintenance plan that proposed upgrading some general residential areas from type 2 to type 3. However, the process for canceling candidate sites was initiated due to ongoing resident opposition.
Increasing the floor area ratio does not automatically mean a reduction in resident contributions. There are requirements for the number of units to be supplied as rental housing, and additional construction costs may arise. Even if project viability improves, whether individual owners can bear the costs of relocation and re-entry remains a separate issue.
Kim In-man, director of the Kim In-man Real Estate Economic Research Institute, stated, “For projects to proceed smoothly, project viability is crucial. Excessive demands can slow down progress, and if conflicts arise, proactive mediation or coordination should begin at the early stages.”
* This article has been translated by AI.
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