Personally, among Korea's urban renewal projects, I think the urban public housing composite project is the best in terms of speed and profitability. It enables projects even in places where profitability does not pencil out, and ultimately allows residents to pay lower contributions and receive new dwellings.
At a background briefing on Mar. 10 at the Government Complex Sejong regarding the call for new candidate sites for the urban public housing composite project, Lee Kyung-ho, head of the Urban Housing Policy Division at the Housing Supply Promotion Headquarters of the Ministry of Land, Infrastructure and Transport (MOLIT), stated accordingly in a meeting with reporters.
The Ministry of Land, Infrastructure and Transport (MOLIT) will conduct a call for new candidate sites for the urban public housing composite project (urban composite project), which supplies new apartments in aging urban areas, from Mar. 11 to May 8. The call targets Seoul, and final candidates will be selected in June. Other regions are scheduled for an additional call in the second half of this year.
The urban composite project is a method in which the public sector leads to supplement profitability in aging urban areas where it is difficult to promote private redevelopment and other private renewal projects, and quickly supplies dwellings along with living social overhead capital (SOC). Compared with private renewal projects, it grants additional incentives such as higher floor area ratios, and it omits procedures such as establishing associations and management disposition plans to push the project forward quickly, which is its biggest feature.
In addition, profits arising from added incentives are used to, among other things, give priority supply of newly built dwellings at prices lower than general pre-sale prices to existing residents who had owned land and the like from before the candidate site announcement date.
From 2021 to 2023, the Ministry of Land, Infrastructure and Transport (MOLIT) announced and has managed a total of 49 existing candidate sites (87,000 homes) over 10 rounds. To date, 29 sites (48,000 homes) have been designated as composite districts, and among them, 9 sites (13,000 homes) have obtained project approval. This year, for the first time in five years since the candidate announcements, construction is set to begin near Jemulpo Station in Incheon, and MOLIT aims to break ground on 50,000 homes in the capital region by 2030.
For this candidate selection process, being pursued for the first time in three years since 2023, the Ministry of Land, Infrastructure and Transport (MOLIT) introduced an open call method that allows residents to submit proposals directly. Unlike the existing candidate sites selected in Seoul from 2021 to 2023, residents' opinions will be reflected from the candidate selection stage. Residents in areas that meet the designation criteria by project type listed below, such as aging level and area, can participate by submitting the application documents posted on MOLIT's website to the district office governing the project area.
By type, the residential-commercial high-density district (station areas) requires an area of at least 5,000㎡, within a 350-meter radius from the station platform boundary, and a ratio of buildings aged 20 years or more of at least 60%. The residential-industrial convergence district (quasi-industrial area) requires an area of at least 5,000㎡ and a ratio of old buildings within the quasi-industrial area of at least 60%, while the housing supply activation district (low-rise residential area) requires an area of at least 10,000㎡ and a ratio of buildings aged 20 years or more of at least 60%. As a common rule, areas where resident conflict over support or opposition is anticipated, or where multiple projects are mixed, can be excluded at the time of selection.
District offices must conduct a primary review of candidate sites submitted by residents and those identified by the offices themselves as needing the urban composite project, considering factors such as the rate of residents willing to participate and the development status of surrounding areas, and then recommend candidate sites to the Ministry of Land, Infrastructure and Transport (MOLIT).
The Ministry of Land, Infrastructure and Transport (MOLIT) will conduct profitability analyses of the recommended candidate sites and decide on final selections through the candidate site selection committee, taking into comprehensive account the feasibility of project implementation and expected effects. MOLIT also plans to hold on-site regional briefings twice, on Mar. 24 and Mar. 31, to provide detailed guidance on the candidate site call to residents and district offices.
In response to a question about the minimum rate of resident willingness to participate required for a proposal, Kim Young-guk, head of the Housing Supply Promotion Headquarters at the Ministry of Land, Infrastructure and Transport (MOLIT), said, "We award extra points starting from a 10% resident participation intention rate, and a full score for extra points is given at 30% or higher," adding, "As a rule of thumb, in redevelopment or reconstruction, the number of households is generally expected to increase by about 30% to 50% compared with existing dwellings."
In addition, along with the call for new candidate sites, the Ministry of Land, Infrastructure and Transport (MOLIT) is concurrently pursuing institutional improvements announced through the Sept. 7 housing supply expansion plan to ensure stable implementation and improve project profitability. The enforcement decree of the Special Act on Public Housing, which eases the floor area ratio to up to 1.4 times the legal cap, is slated for revision within this month, and MOLIT will make every effort to ensure swift passage of the amendment to the Special Act on Public Housing by the end of this year, including the abolition of the sunset clause.