The floor area ratio for reconstruction and redevelopment projects led by the institutional sector will be allowed up to 1.3 times the legal cap. For the next three years, this special exception on floor area ratios will apply, and even making the maintenance plan available for resident viewing will qualify the project for the higher ratio. The aim is for the public sector to take the lead in areas where maintenance projects were difficult to pursue with private resources due to weak profitability and to speed up the supply of dwellings.
According to the Land Infrastructure and Transport Committee and the maintenance industry on the 19th, the Democratic Party of Korea plans to put a bill to amend the Urban and Residential Environment Improvement Act (Dujeong Act) on the floor of the National Assembly as early as this month and pass it. The bill, introduced in April last year by 11 lawmakers including lawmaker Moon Jin-seok of the Democratic Party of Korea, contains provisions to expand special exceptions for floor area ratios limited to public redevelopment and reconstruction projects.
It passed the Land Legislation Review Subcommittee in Dec. last year and cleared the full meeting of the Land Infrastructure and Transport Committee on the 10th. A National Assembly official said, "If things move quickly, it will pass the plenary session around the end of this month," adding, "It is a bill that reflects the ruling and opposition parties' will to revitalize public-led maintenance projects."
The bill allows higher floor area ratios for public-led maintenance projects than for private-led ones. It plans to permit floor area ratios up to 1.3 times (130%) the legal cap for public maintenance projects (redevelopment and reconstruction) led by Korea Land & Housing Corporation (LH) and others. For example, although the legal maximum floor area ratio in quasi-industrial zones in Seoul is currently 400%, if implemented by the public sector it would be 520% (1.3 times 400%), effectively raising the ratio by 120 percentage points.
Currently, the Seoul Metropolitan Government allows floor area ratios for public reconstruction only up to the legal ceiling. In addition, starting in July 2025, it is implementing the "Regulatory Innovation Plan for Maintenance Promotion Projects," allowing up to 1.2 times the legal cap for floor area ratios limited to 110 project zones designated for maintenance promotion projects pursued as public redevelopment. If the amended Dujeong Act passes, the floor area ratios would be raised further than under the city's regulatory innovation plan.
This legal revision was promised as part of the "dwellings supply expansion plan" announced on Sept. 7 last year (the 9/7 supply plan) to promote public maintenance projects. In the 9/7 supply plan, the government said, "We will establish a maintenance project foundation that residents prefer and can trust," and added, "We will expand floor area ratios beyond the legal cap to the highest level and grant additional incentives while also further increasing public rental and public contributions."
The amendment allows the special exception on the floor area ratio cap for a limited period of three years. The idea is to raise ratios within a set time frame to spur development of many sites through public redevelopment or reconstruction. If the maintenance plan is made available for resident viewing within three years, the project will receive the floor area ratio benefit.
Park Hap-su, an adjunct professor at Konkuk University's Graduate School of Real Estate, said, "The aim is to raise the floor area ratio to improve profitability at sites where low profitability makes it difficult to proceed with private-led projects and to have the public sector take the lead to quickly carry out maintenance projects," adding, "Securing public rental dwellings in project sites pursued under public leadership is also a government goal."