Seoul will accelerate the expansion of housing supply through private redevelopment projects.
On the 7th, the city said Mayor Oh Se-hoon disclosed the main points of the "second redevelopment report," which he delivered to Kim Yong-beom, the presidential chief of staff for policy, on the 5th, and said the city will focus its capacity on shortening administrative procedures and improving systems to break ground on 310,000 units by 2031.
The report assessed that Seoul's shortage of dwellings is a structural supply gap caused not by a short-term increase in demand but by the accumulation of mass cancellations of redevelopment zones in the past, curbs on new designations, and successive regulations on redevelopment projects.
It also analyzed that the burden of the shortage is being passed on to residents. It said the lack of dwellings is affecting residents' housing stability, as some choose monthly rent after failing to find a jeonse lease in their desired area, and young people and people without dwellings put off buying homes because of higher housing costs.
The report is a follow-up measure after the president ordered a status report on the causes of the housing supply shortage at the Cabinet meeting on the 14th. On the 5th, Mayor Oh met with Kim Yong-beom, the presidential chief of staff for policy, explained the status of Seoul's redevelopment and reconstruction efforts, the causes of the supply shortage, and system-improvement tasks to vitalize redevelopment, and delivered the report.
Pointing out that private redevelopment accounted for more than 90% of Seoul's housing supply over the past three years, the report analyzed that, in Seoul, where developable land is scarce, redevelopment and reconstruction are effectively the only means of large-scale housing supply.
An analysis of 59 redevelopment sites completed over the past three years found that the number of dwellings increased 36.4% from before the projects. Redevelopment rose 27.4% and reconstruction 44.2%, respectively. The city also said that in the 253 redevelopment zones it is managing with a goal of groundbreaking by 2031, a net increase in supply of 39.2% over existing levels is expected.
The report analyzed that supply-suppression policies in place from 2012 to 2020 are the main cause of the current shortage. It said the supply base was weakened as 389 redevelopment zones were lifted, a residential redevelopment index was introduced, and requirements for new designations were tightened, and that from 2016 to 2020 there was not a single new redevelopment designation.
It also analyzed that the designation of speculative overheat zones, stricter safety assessments for reconstruction, the revival of the reconstruction excess-profit recovery system, as well as recent lending curbs and conflicts arising from higher construction costs, are working to dampen private redevelopment efforts.
Since 2021, the city has moved to restore the supply base by abolishing the residential redevelopment index, introducing the fast-track integrated planning program, and reassigning lifted areas, and it plans to shorten redevelopment timelines by expanding standard processing deadlines and parallel processing of procedures.
The city also again asked the government to amend laws and regulations to: ▲ ease the ratio of rental dwellings in redevelopment and raise floor area ratios for private redevelopment ▲ grant a three-year temporary suspension of the ban on transferring union member status ▲ ease relocation loan regulations (LTV 40%→70%) ▲ ease the consent rate for establishing a redevelopment association (75%→70%).
Myung No-jun, Seoul's housing bureau chief, said, "Seoul will shorten administrative procedures as much as possible and actively mediate on-the-ground conflicts to prevent disruptions in private supply as we aim to break ground on 310,000 units by 2031," adding, "We will proactively pursue regulatory improvements within the city's authority and work closely with the government to move up a housing supply that residents can feel."