Seoul pushed back to next year legislation for a "transfer of development rights" system that would allow unused floor area ratios, such as those restricted for cultural heritage preservation, to be shifted to sites with capacity to develop. Floor area ratio is the ratio of a building's total floor area to the land area; the higher the ratio, the more floors can be added. New York's One Vanderbilt (93 floors) and Tokyo's Shin-Marunouchi Building (38 floors) are landmark buildings created through transfer of development rights.
Seoul officials say the Ministry of Land, Infrastructure and Transport's lukewarm stance is slowing progress. As implementation drags, a cautious view of introducing a Seoul-style transfer system is emerging. Unlike the United States and Japan, Seoul has relatively few publicly owned land and buildings, and tangled interests among landowners raise concern that reaching agreement will not be easy.
On the 20th, Seoul said at an administrative audit by the Seoul Metropolitan Council's Urban Planning and Balance Committee on the 4th that it postponed legislation of the local government ordinance for the transfer system to the first half of next year. In a February work report, Seoul had said it would legislate in April and implement within the year. However, after one delay, it said it would give advance notice of legislation in the second half, and even that proved difficult, pushing it to next year.
The transfer system allows the sale of floor area ratios from areas under height restrictions because of cultural heritage to other places. For example, if the commercial district in Pungnap-dong has a 1,000% floor area ratio but can use only 400% due to height limits stemming from the Pungnap Earthen Fortress, a cultural property, the remaining 600% can be sold to another redevelopment area.
While lauded as a groundbreaking policy for efficiently managing urban development density, questions about feasibility are growing. Song Jai-hyuk, a member of the Democratic Party of Korea (Nowon District 6), noted at the audit that he had traveled to Tokyo in on the end of September on a standing committee trip to gather case studies of successful transfers, saying, "I thought there would be many cases in Tokyo, but there was only one, and even that was possible because all the land in Marunouchi was solely owned by Mitsubishi," and added, "What Seoul envisions inevitably becomes extremely complicated because countless stakeholders are entangled, creating a large gap with reality."
Seo Sang-yeol, a member of the People Power Party (Guro District 1), cited San Francisco in the United States, which limits transfer areas to public districts, saying, "Because Seoul does not own much land or many buildings, the arithmetic for transfers must be particularly thorough," and added, "Otherwise, there could be cases where it would be better not to proceed." He pointed out that unless the public owns the land outright, it will be difficult to mediate interests between buyers and sellers when valuing floor area ratios.
Likely transfer areas discussed for a Seoul-style system include zones around cultural properties such as Pungnap Earthen Fortress, Bukchon, and Gyeongbok Palace, as well as the Gimpo Airport area; these places tend to have complex land rights relationships. Seo Jin-hyung, a professor in the Real Estate Law and Administration Department at Kwangwoon University, said, "The transfer system is theoretically good, but there may be challenges at the execution stage, so the city needs to plan the details meticulously, including the scope, criteria, and limits for transfer of floor area ratios."