The Seoul city government will raise floor area ratios and lower public contributions to boost the profitability of redevelopment in outer districts such as the northeastern and southwestern areas. Association members in redevelopment projects are expected to face lower costs.
The Seoul city government said on the 27th that it had conditionally approved revisions to management plans reflecting profitability adjustment coefficients for 60 Moa Town initiative sites undergoing redevelopment, and conditionally approved changes to implementation plans for eight street housing maintenance projects. Costs for association members and overall business conditions are expected to improve across Gangbuk District's Suyu-dong 52-1 Moa Town initiative and the broader Gangbuk and SuNAM areas' Moa Housing projects.
The profitability adjustment coefficient is a system that adjusts the share of rental housing supply and the extent of floor area ratio relaxation based on the level of officially assessed land prices in the project area. The coefficient (range 1.0–1.5) is calculated by reflecting the assessed price level of the project zone relative to the city's average assessed land price, and lower land prices receive higher coefficients, reducing public contribution burdens.
In general, sales prices are formed in proportion to land prices, so areas with higher land prices have stronger profitability. However, areas with lower land prices showed profitability gaps even under the same maintenance conditions. The fact that most Moa Town initiative sites are concentrated in Gangbuk and the SuNAM area also posed difficulties when pushing projects forward.
To solve these issues, the Seoul city government introduced a profitability adjustment coefficient that reflects assessed land price levels, allowing application of public contribution requirements suited to local conditions.
In this review, the city expected business conditions for Moa Housing to improve by uniformly revising management plans for 60 previously designated Moa Town initiative sites. When applying for integrated review of Moa Housing project plans later, the related criteria will be applied on the condition that the adjustment coefficient is used if a tenant housing stability plan has been established.
The Moa Town initiative sites receiving profitability adjustment coefficients this time are 26 in the northeastern area, 23 in the SuNAM area, and 6 in the northwestern area.
Beyond Moa Town initiative sites, the coefficient was also applied to eight street housing maintenance projects that passed Moa Housing reviews. The Seoul city government expected that small business sites that had not proceeded to relocation or groundbreaking despite passing integrated reviews due to heavy association member burdens would see public contribution burdens eased by this review, improving conditions to move projects forward.
Along with improving profitability, the Seoul city government will maintain standards to secure public interest. It plans to ensure both public interest and profitability by applying the profitability adjustment coefficient when the following are met: ▲ securing at least 10% rental housing ▲ applying mandatory tenant loss compensation (within Moa Town initiative) ▲ establishing a tenant housing stability plan ▲ a social-mix plan with no discrimination from for-sale housing ▲ public lotteries disclosing building and unit numbers for rental housing.
Separately, the Seoul city government plans to supply a total of 1,900 homes (including 329 rental units) through four Moa Housing sites in the 79,362.1-square-meter area of Jayang 1-dong 799 in Gwangjin District under the Moa Town initiative. The target area is near Jayang Traditional Market and Jayang Elementary School. With 73% of buildings old or substandard, deterioration is high. Under the Moa Town initiative plan, the city will widen Achasan-ro 44-gil in front of the main gate of Jayang Elementary from the current 5 meters to 8 meters, installing a roadway and sidewalks on a street that previously did not separate vehicles and pedestrians to create a safer school route. It will also expand Jangdokgol Park from 997.4 square meters to 1,502 square meters to increase residents' rest space.
Buildings to remain along Jayangbeonyeong-ro and those facing Jayang Traditional Market on Jayangbeonyeong-ro will have their heights reduced to harmonize with nearby residential areas, and a view corridor will be secured by arranging the site with the Han River to the south in mind.
With this review's approval, the city raised the zoning from Type 2 general residential to Type 3 general residential for the integrated project, increasing profitability.