Participation by first-tier builders in the urban public housing complex project (urban complex project) is increasing. As recently as last year, the urban complex project often failed because it could not find a builder. But with the new administration's push to expand public housing, the urban complex project's business viability has improved, and as the construction market slumps, the stability of public projects has drawn attention, prompting even first-tier builders to jump in.
The urban complex project is a program in which the public sector takes the lead to swiftly supply dwellings in areas such as station zones, quasi-industrial districts, and low-rise residential neighborhoods that have become underused and aged and are difficult to develop with existing private projects. Because public institutions participate, permits and approvals can proceed quickly.
According to Korea Land & Housing Corporation (LH) on the 18th, POSCO E&C was selected as the preferred bidder in the call for participants in the urban public housing complex district project for Singil 2 in Seoul. The step of selecting the builder through a residents' council remains, but it is common for the preferred bidder to be chosen as the project operator.
The Singil 2 district urban complex project will develop 60,000 square meters of low-rise residential area, more than 30 years old, in Singil-dong, Seoul, into public housing and supply 1,332 households. It is one of the pilot districts selected by the Ministry of Land, Infrastructure and Transport for the urban complex project. Groundbreaking is targeted for 2026, with completion in 2030.
The urban complex project to develop aging urban areas and supply dwellings was introduced in 2021. However, builders were reluctant to participate due to low business viability, making it difficult to find operators. Even when operators were found, mid-sized builders often participated alone or as part of a consortium.
Recently, however, the mood around the urban complex project has changed. Even first-tier builders have begun to jump into the urban complex project. With the new administration rolling out measures to improve business viability, the structure now allows for stable revenue generation. For the Eunpyeong-gu, Seoul, Jeungsan 4 district urban complex project, Samsung C&T and DL E&C formed a consortium to participate, while GS Engineering and Construction is participating on the west side of Ssaengmun Station.
When announcing the Sept. 7 supply measures, the government set a goal of breaking ground on 50,000 households in the capital region by 2030 through the urban complex project. To that end, the government announced measures to improve business viability for the urban complex project, including easing mandatory park and green space requirements and reducing school site charges. It will also provide an incentive to relax the floor area ratio by 1.4 times for low-rise residential types.
In particular, as the new administration's dwellings supply stance focuses on public interest, the fact that private builders are seeking opportunities in the public housing institutional sector has also helped activate the urban complex project.
An LH official said, "In the past, when an urban complex project failed, there were no participants, but now a builder bids alone and it fails, and upon re-bidding, the same builder participates again and signs a private contract," adding, "Recently, participation by large builders in the urban complex project has increased."