Old complexes in Seoul are abandoning remodeling, which had been relatively advantageous with a project period of only about half as long, and are recently turning one after another to reconstruction. Expectations for easing reconstruction regulations, along with weaker profitability and internal conflict, have converged to drive the change.
According to the maintenance industry on the 13th, the remodeling project for Ichon Woosung Apartment in Dongbu Ichon-dong, Yongsan District, Seoul, was halted last month. The union, which failed to obtain project plan approval within three years of its establishment, held a general meeting to ask whether to continue the project, and more votes were cast against it. As a result, the union began the process of dissolution. Completed in 1995, Ichon Woosung Apartment is a complex with two buildings, 2 underground floors to 20 above-ground floors, and 243 households.
Dongbu Ichon-dong, where Ichon Woosung Apartment is located, has many complexes with floor area ratios above 300%, so most have pursued remodeling. Ichon Woosung Apartment also chose remodeling from a profitability standpoint because its complex floor area ratio is 322%. However, construction costs have surged in recent years, undermining remodeling profitability, and it is said that opinion spread within the union that the apartments would be of lower quality than reconstruction in terms of layouts, community facilities, and floor heights. Nearby Hangang Daewoo Apartment is also reportedly toying with a shift from remodeling to reconstruction.
Eungbong Daerim Phase 1 in Seongdong District, Seoul, completed in 1986, pursued remodeling after forming a union in 2006 but switched to reconstruction. As the project stalled for 10 years after the union's establishment, residents' dissatisfaction grew, and the process to cancel remodeling union appointments began recently. Seongwon Daechi Complex 2 in Gaepo-dong, Gangnam District, which had focused on vertical extension remodeling for 15 years, is also in the process of dissolving its remodeling union.
Unlike reconstruction, which demolishes existing apartments, remodeling expands while keeping the structural frame intact, offering the advantage of relatively lower construction costs. For that reason, during the Moon Jae-in administration, which strictly regulated reconstruction, many complexes that were structurally sound and unlikely to pass the reconstruction safety assessment, or had high floor area ratios and poor profitability, pushed remodeling.
But the situation changed as the Yoon Suk-yeol administration and Seoul Mayor Oh Se-hoon actively promoted reconstruction. In 2023, the Yoon administration eased safety assessments, abolished the price ceiling on new units in areas other than the three Gangnam districts and Yongsan District in Seoul, and relaxed the reconstruction excess profit recapture system. In 2024, it introduced a "fast track" allowing reconstruction to begin without undergoing a safety assessment.
Early this year, the Seoul city government set "abolishing regulations" as a key policy theme and in May revised a local government ordinance to greatly expand exemptions from environmental impact assessments. If the consultation process for the environmental impact assessment is exempted, the step of main plan consultation in the sequence of "draft report (20 days) → main plan consultation (28 days)" is skipped, effectively shortening the consultation period by about 28 days. The city is also pushing to ease public contributions in regulated areas with height limits and to improve floor area ratio incentives for contributed acceptance of public facilities, among other measures.
A maintenance industry official said, "As remodeling construction costs have risen to the level of reconstruction, the advantage on the expense side is disappearing," adding, "If a complex joins Seoul's expedited integrated planning, it can raise its floor area ratio through an upgrade in use class, making reconstruction possible in some cases, which will weigh on residents of complexes pursuing remodeling."