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Invest1 publisher3 min readPublished

Seoul designated more redevelopment zones in five years than in the ten before

Mayor Oh Se-hoon put Seoul's five-year average at 35 newly designated redevelopment zones a year against 17 for the previous decade, and he is asking the land ministry for a fifth more floor area on private sites.

The Investor · Invest desk

Photograph accompanying Seoul designated more redevelopment zones in five years than in the ten before
Photo: en.sedaily.com

What happened

  • Mayor Oh Se-hoon told a Seoul City Hall briefing that newly designated redevelopment zones in the capital averaged 35 a year over the past five years, double the 17 a year of the preceding decade.
  • Oh restated his opposition to housing at Yongsan Park and to lifting the greenbelt, offering the Tancheon Water Recycling Center site and its 13,000 homes as the alternative.
  • The city put public supply at 131,000 homes since 2021, from redevelopment contributions, SH direct supply and purchase-based rentals, with 130,000 more planned by 2031.

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Why it matters

  • constraint Public contributions from redevelopment sit inside the city's 131,000 public homes, so the rental-share cut that improves project economics thins the channel feeding the next 130,000.
  • contradiction Seoul is refusing the ministry's two land sources while asking it for three rule changes, leaving each side's supply number dependent on the other conceding.
  • precedent With city review at 2.7% of the project period, devolving small projects to districts sets a template that can save weeks at most.

Five years at 35 designations a year is 175 zones. Ten years at 17 is 170 [1][1]. Seoul's last five years therefore put slightly more redevelopment zones on the map than the whole decade before them.

The 214 zones moving since fast-track planning began in 2021 cover 307,000 homes, roughly 1,435 homes a zone [3][2]. Seoul wants construction started on 310,000 homes through redevelopment by 2031 [4]. That target is the designated pipeline plus about 1 percent [3]. The city said this year's construction starts have reached 50% of the target [4].

Oh's case for pushing further rests on a share. "Over the past 20 years, 87.5% of Seoul's housing supply has come from the private sector," he said [5]. Three requests to the central government remain open: a three-year temporary easing of restrictions on transferring association membership status, a cut in the rental housing ratio for redevelopment from 50-75% to 30-50%, and a 1.2-fold easing of the legal floor area ratio ceiling for private projects [8]. The ceiling change is 20% more floor area on land already assembled [4]. The rental cut takes 25 points off the top of the range and 20 off the bottom [5].

The ministry has already moved on two other fronts. "Easing the consent threshold for forming redevelopment associations and reducing land contribution requirements are very meaningful, but we must not stop, because conditions surrounding redevelopment projects are becoming more difficult," Oh said of the government's Aug. 13 housing measures [7].

Where the city and the ministry part is land. Oh restated his opposition to housing at Yongsan Park and to lifting greenbelt restrictions [12], and offered the Tancheon Water Recycling Center instead, as a "Southeastern Youth Specialized Industrial Complex" of 13,000 homes with parkland and research facilities [13]. "Even combining the Defense Acquisition Program Administration site, the military apartments and the officers' quarters that the nominee for land minister has in mind would amount to only half," Oh said [15]. By his own comparison that is about 6,500 homes [8]; he did not give a count for those sites.

The public programme is not separate from the private one. Seoul counted public contributions from redevelopment projects, direct supply by Seoul Housing & Urban Development Corporation and purchase-based rentals in the 131,000 public homes it says it supplied since 2021, and plans 130,000 more by 2031 [16]. The first works out at about 26,200 a year, the second at about 21,700 [7]. A lower required rental share reduces what each redevelopment project hands over, so the next 130,000 needs more projects to produce the same units.

On moving authority over projects of 500 homes or fewer to district governments, Oh said what matters is how much the project period can be shortened, not which level of government holds the power [9]. "Of the entire redevelopment project period, the portion handled by the city accounts for only about 2.7%, and the city's review period has been shortened from six months to a year in the past to one to three months now," Oh said [10]. The other 97.3% of the clock sits elsewhere [6].

I'd expect the floor area ceiling to be the request that moves, because it costs the ministry no land and no budget and it adds saleable area on plots where associations already exist [8][4]. The counter is plain: the nominee for land minister is working on Yongsan-area sites [15], and a ministry that can build on public land has no need for Seoul's consent thresholds to fall. If the ministry grants the rental-share reduction and leaves the ceiling untouched, I have the ranking backwards.

What to watch

  • Whether the land ministry grants the 1.2-fold floor area ratio easing or the rental-share reduction after its Aug. 13 package.
  • Whether Seoul's construction starts hold this year's reported 50%-of-target pace as the city aims at 310,000 homes by 2031.
  • Whether authority over redevelopment projects of 500 homes or fewer moves to district governments, and what happens to review times.
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