The government will simplify the selection process for the maintenance projects for the first-generation new towns, including Bundang, Ilsan, Pyeongchon, Jungdong, and Sanbon, to accelerate the projects. The selection method will also be diversified. An additional method will be introduced, whereby residents propose ideas with majority consent, alongside the existing method of designating leading districts through public recruitment for reconstruction.
The government expects that this will accelerate the maintenance projects for aging complexes in the first-generation new towns, which have been stagnant due to the inability to meet the approval rate requirement for designation as reconstruction leading districts and other public contributions. However, there are concerns that the focus is solely on short-term housing supply, as there is no mention of expanding living infrastructure like transportation, sewage systems, and parking lots in line with the increase in residential facilities after reconstruction.
◇ Selection method for project sites, introduction of 'resident proposals' instead of leading district designations
On the 7th, the government announced that it will fully adopt the direct proposal method by residents as the selection method for project sites in the maintenance projects for the first-generation new towns during a meeting of real estate-related ministers. Under this structure, if the residents' representative group proposes a maintenance plan (draft) with majority consent from the residents to the local government (LG) head, the LG will review it and decide whether to accept it.
Currently, 15 places (including 2 multi-family housing) in the first-generation new towns, accommodating 37,000 dwellings, have been selected as project sites for maintenance projects, with plans to designate maintenance zones within this year. However, residents of complexes have struggled to secure the reconstruction approval rate in a short period to participate in the public recruitment.
The government believes that if residents can directly propose reconstruction through this measure, it will shorten the project duration by at least six months, as there will be no public recruitment preparation period.
Professor Ko Jun-seok of Yonsei University's Graduate School of Business noted, "In the past, many complexes experienced fierce competition and conflicts among residents to meet the conditions for designating leading districts. If residents can apply directly with a certain approval rate under this new measure, it could lead to a positive effect of increasing the volume of maintenance projects in the first-generation new towns over the mid to long term."
Ham Young-jin, head of the Big Data Research Lab at Woori Bank, said, "This could reduce the sense of deprivation for subsequent maintenance project sites that could not enter leading district projects and increase the willingness for reconstruction." He added, "Since we plan to control the volume of management disposal permits according to the total migration demand by region, competition for project superiority among maintenance sites may intensify. If the projects are delayed, related financial costs will inevitably be passed on to the project costs, making it crucial to obtain residents' consent."
◇ Preventive measures against speculative activities such as 'splitting commercial properties'
Additionally, improvements will be made to allow proposals for maintenance zone designations that exceed the annual maintenance volume established by each local government.
In the case of local governments that have sufficient capacity to accommodate migration demand, they will be allowed to exceed the planned maintenance volume for zoning. However, taking into consideration that Bundang does not have enough migration capacity, the designation of zones exceeding the planned volume will not be allowed. The planned maintenance volume for next year is 12,000 dwellings for Bundang, 5,000 for Ilsan, 3,000 for Pyeongchon, 4,000 for Jungdong, and 2,000 for Sanbon, totaling 26,000 dwellings.
The government plans to introduce a permit system for managing disposal quantities in consideration of the increase in migration demand due to the reconstruction of first-generation new towns. Local governments that do not implement migration management plans will face restrictions on future loans from the Korea Housing & Urban Guarantee Corporation (HUG) and will not receive support for the future urban fund project costs (construction costs).
The procedures for the maintenance projects in the first-generation new towns will also be simplified. It will be permitted to integrate special maintenance plans and project implementation plans. A special provision will be provided to finalize similar consent processes, such as establishing residents' representative groups, designating leading districts, deciding on implementation methods, and appointing project implementers, within one consent letter.
To accelerate the pace of urban maintenance projects with low project viability, the government plans to introduce a public trust system in the future. After preparing specific implementation plans regarding areas of work, promotion strategies, and financial structures, the relevant laws will be amended or enacted. Plans for rapid promotion of the next year are being pursued, with the goal of establishing foundational laws by 2027 and incorporating establishment by 2028.
To prevent speculative activities through splitting commercial properties and intentional delays in projects, the government plans to establish grounds for restricting such actions and to introduce a rights assessment standard date. If abnormal actions such as land division or conversion to multi-family housing occur after the rights assessment standard date, residency rights will be limited.
Professor Ko Jun-seok evaluated, "Proactively blocking the actions of purchasing small equity pieces that hinder reconstruction projects across the country will also be a good measure to enhance the speed of maintenance projects in the first-generation new towns and remove obstacles."
However, there were criticisms that the plans for living infrastructure such as parking facilities, sewage facilities, and roads have been completely lacking, focusing only on short-term supply due to the increase in dwellings.
Kwon Dae-jung, a professor at Hanseong University Graduate School of Economics and Real Estate, said, "Expanding zoning designations through the resident proposal method may increase the volume compared to before, but it will bring up the issue of needing to expand parking lots, roads, parks, and sewage facilities accordingly."
A real estate industry official, who wished to remain anonymous, stated, "It can be seen as a way to transfer the responsibility for designating leading districts, which was the government's share, back to the residents to reduce their burden, but ultimately, the reconstruction fees amounting to millions of won and conflicts among residents are still present, making it difficult to see significant effects from the increase in supply."