The Seoul Metropolitan Government will release operating guidelines for the private, residential-focused urban complex development project at the end of July. The guidelines will include standards that directly affect business feasibility, such as the public contribution ratio, the floor area ratio system, the scope of stationside area recognition, and the ratio of nonresidential facilities. Sixteen locations in Seoul are preparing to establish maintenance plans in line with these standards.
According to the maintenance industry on the 3rd, the Seoul Metropolitan Government's Public Housing Division and the Urban Public Housing Complex Team are in the final stages of establishing the operating guidelines for the residential-focused urban complex development project. The operating guidelines are expected to be released around the end of this month.
The operating guidelines will include: ▲ requirements for project sites ▲ standards for establishing complex development plans ▲ standards for changing zoning districts ▲ standards for calculating public contributions. A Seoul city official said, "We plan to comprehensively review issues such as public contribution standards, the floor area ratio system, and how many meters from a station to recognize as a stationside area, and include them in the operating guidelines," adding, "We plan to announce them around the end of this month."
The private urban complex development project is a system designed to accelerate the supply of dwellings by carrying out high-density mixed-use development in stationside areas, quasi-industrial zones, and older residential areas. Under the Act on Support for Urban Complex Development, which took effect on Feb. 7 last year, private operators such as trust companies and REITs (real estate investment trusts) can participate as implementers. The Seoul Metropolitan Government implemented the related local government ordinance in January this year.
The project is largely divided into "growth hub" and "residential-focused" types. The growth hub type primarily targets areas where commercial and business functions can be strengthened, such as near transfer stations. The residential-focused type is a project that reinforces the function of supplying dwellings, centered on stationside areas, quasi-industrial zones, and older residential areas.
At the end of May, the Seoul Metropolitan Government first established the operating guidelines for the growth hub type. In these guidelines, the public contribution ratio for the floor area ratio incentive arising from an upward zoning change was set at 50% of the increased floor area ratio. However, if a project is pursued in a district where the average officially assessed land price of standard lots is 60% or less of the citywide average for Seoul, the public contribution ratio can be reduced to 30% in consideration of local conditions and the need for balanced development.
For example, if the increased floor area ratio from an upward zoning change, when simply converted into rental housing, would allow for 100 additional units, then the amount equivalent to 50 of those units must be provided as a public contribution. In districts eligible for the eased standard due to lower land prices, the public contribution burden could be reduced to about 30 units.
In the residential-focused operating guidelines as well, the public contribution and floor area ratio system are expected to be the key variables affecting business feasibility. The maintenance industry believes that if the public contribution burden grows, feasibility declines, while relaxed standards could speed up projects, mainly in older stationside areas and quasi-industrial zones.
In the residential-focused urban complex development project, the Seoul Metropolitan Government plans to allow project implementers to set the ratio of nonresidential facilities, such as commercial and business facilities, according to the characteristics of the project site. The intent is not to set a uniform ratio between residential facilities such as apartments and nonresidential facilities, but to give the private sector room to decide based on location and demand.