Starting this year, Seoul Housing and Urban Development Corporation (SH) will carry out feasibility reviews of management disposition plans for redevelopment and reconstruction projects. A pilot program is underway for two apartment complexes currently pursuing reconstruction—Yeouido Daekyo and Songpa Hanyang Phase 3—and the project will move into full swing starting in July.
According to a Seoul Metropolitan Government work report on the 16th, the city has drawn up a plan to expedite such redevelopment projects. This is a preemptive response as more districts are expected to seek approval of management disposition plans within two to three years. The city projected that the total number of households in districts publicly designated as redevelopment zones would rise 64%, from 199,000 as of last August to 327,000 as of June this year.
A management disposition plan is the "final plan" of a redevelopment project, and a feasibility review is a system that examines the appropriateness of calculating project costs and member contributions, as well as the legality of sales eligibility and application procedures. Under Article 78 of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents, if project costs rise by 10% or more, member contributions increase by 20% or more, or 20% or more of members request it, the head of the local government must request a feasibility review. With a recent legal revision, associations can also request a feasibility review directly.
Requests for feasibility reviews of management disposition plans are on the rise. Redevelopment districts in the Seoul metropolitan area are expanding rapidly, and construction costs have surged in recent years, pushing up member contributions. The problem is that, due to staffing shortages at review institutions, the review alone takes an average of six months. Institutions designated by presidential decree are the Korea Real Estate Board (REB) and the Korea Land & Housing Corporation (LH), but LH is not performing this function. At REB, there are only 11 feasibility review specialists at headquarters in Daegu and two at the Seoul branch.
Because of this, the city set up a dedicated unit at SH last year and launched a parallel review pilot program in January. SH has improved procedures to shorten review times, beginning the preparatory work needed for feasibility reviews from the stage when an association drafts its management disposition plan. Preparations for preliminary review, such as collecting documents to confirm sales eligibility, typically take five months. After "public inspection and opinion gathering→association general meeting resolution," once the association applies for approval, SH plans to complete the main review within a month.
The first complex to undergo SH's feasibility review is expected to be the Yeouido Daekyo Apartments. The Daekyo Apartments reconstruction association filed for approval of its management disposition plan with the Yeongdeungpo District Office on the 3rd. A Seoul Metropolitan Government reconstruction policy team official said, "SH has completed all preliminary preparations for the feasibility review of the management disposition plan and began the main review after the Daekyo Apartments reconstruction association filed for approval," adding, "To help the project gain speed, SH plans to finish the review within a month."