In the metropolitan area, the number of complexes attempting "integrated reconstruction and redevelopment" by grouping several apartment complexes into one is increasing. Large complexes generally have business advantages and the speed of the project is fast. However, conflicts of interest among the complexes are also rising, causing the projects to go awry.
According to reports on the 16th, Jongno District is pursuing a plan to change the redevelopment management plan for the Changsin 1-4 districts from the existing small-scale method to an integrated development method. Changsin-dong has many alleys and irregular land divisions, making it difficult to secure roads with small-scale renovation, and it is easier to secure business viability with integrated redevelopment.
However, the residents of Changsin-dong, who were pushing for the existing management plan, must obtain resident consent again and are concerned that the addition of public contribution items due to integrated development will increase the member's share.
Especially, the landowners and developers who were pushing for redevelopment in accordance with the Seoul City announcement are resisting, noting that losses and project delays may occur due to the change in the management plan. Earlier, in April 2022, Seoul City announced the designation of the management zones and decisions on the management plans for Changsin 1-2 districts as a small-scale method and for Changsin 3-4 districts as a general management type, but Jongno District Office later pushed for a change to integrated redevelopment. The approval process for the redevelopment project has been on hold since then.
In February, the reconstruction management area and management plan for the Gaepo Kyungnam, Woosung 3rd Complex, and Hyundai 1st Complex in Gangnam District, Seoul, were amended and passed. When combined, the three complexes total 1,499 households (Gaepo Kyungnam 678 households, Woosung 3rd Complex 405 households, Hyundai 1st Apartment 416 households). With the change in the management plan, there are plans to newly construct 2,320 housing units (including 365 public housing units) and auxiliary welfare facilities, with coverage ratio below 50% and floor area ratio below 300%.
However, it is necessary to resolve conflicts among residents arising from the different land shares per complex. Last year, as the estimated share for each complex and type was disclosed, friction arose among owners. The Kyungnam 1st Reconstruction Preparatory Committee held an emergency briefing in November last year to discuss conflict resolution methods. It is known that residents of Kyungnam 1st are advocating for an independent settlement system proportional to the floor area ratio and land share. The independent settlement system is a method for adjusting interests arising from differences in the floor area ratio applied to each apartment by separately settling revenues (income) and expenses for each complex.
In Bundang Yangji Village, Seongnam City, Gyeonggi Province, the integrated reconstruction is being pursued for 4,392 households across five apartment complexes and a mixed-use complex. However, since the scale of the five complexes is large, some complex owners have claimed "reconstruction in place" to be prioritized based on the distance to subway stations, resulting in conflicts.
The Mokhwa Apartment and Samba Apartment in Yeouido, Yeongdeungpo District, Seoul, also attempted integrated reconstruction; however, due to disagreements among residents regarding the Han River view, they switched to individual reconstructions.
The industry believes that while large complexes can secure business viability, prolonged conflicts could eventually slow down project progress, leading to differences in business viability based on floor area ratio and location among complexes. A representative from a construction company noted, "Though the attempts for integrated reconstruction are increasing, and large business sites are emerging, the larger the business site, the more conflicts tend to occur," adding, "Especially in cases where residences near subway stations or those with a Han River view demand reconstruction in place, conflicts are unavoidable due to significant financial stakes regarding costs such as share divisions."
A representative from a reconstruction promotion complex stated, "Even combining two complexes makes it difficult to obtain resident consent," and added, "While no one wants to revert to individual reconstruction, compromises are not easily reached, which can slow project progress."
However, due to the rising preference for large complexes, there are ongoing efforts for integrated reconstruction to leverage the advantages of large complexes. A representative from a major construction company stated, "Even with conflicts, those who ultimately resolve them and proceed with the project gain benefits in terms of business viability," adding, "Particularly, due to the high preference for large complexes in the recent subscription market, demand for reconstruction into complexes with more than 1,000 to 2,000 households will continue to increase."