Nowon-gu in Seoul said it is moving to accelerate improvements in reconstruction project viability, building on recent regulatory reform gains.
A partial amendment to the Urban and Residential Environment Improvement Act, currently awaiting a full National Assembly vote, includes a provision to bring the supply prices of public rental housing — built as a condition of receiving floor-area-ratio relaxations in reconstruction and redevelopment projects — in line with actual costs.
Under the current regime, developers who receive floor-area-ratio relaxations must supply housing units at prices calculated using the "standard construction cost" index. The amendment's key change is to base that calculation instead on the "basic construction cost" index, which more quickly reflects fluctuations in construction expenses and is set at a higher level than the existing standard.
Particularly significant is that the amendment incorporates proposals Nowon-gu had repeatedly submitted to the central government to address obstacles facing local reconstruction projects. The district had long argued that artificially low public rental housing supply prices were undermining the financial benefits of floor-area-ratio relaxations and shifting the resulting burden onto association members.
The district estimates that if the new rate of 80 percent of the basic construction cost is applied, the supply price per public rental unit will rise by about 60 million won ($42,400) — roughly 1.5 times the current level. Bringing supply prices closer to actual construction costs is expected to reduce the additional contributions association members must pay and improve the overall viability of reconstruction projects.
Once the relevant legislation and enforcement ordinances are finalized, the district plans to run project-by-project simulations of the improved viability and share the specific figures with residents. The aim is to help residents understand how the regulatory changes affect actual project economics and to enable each development site to respond quickly.
Under the banner of "A New Leap — Nowon, the Future Economic City of Tomorrow," the district's ninth elected administration has concentrated its efforts on building a premium residential city. District Mayor Seo Jun-o's first official act in office was signing an order to establish a dedicated task force for accelerating reconstruction and redevelopment.
The district's three core strategies are reforming unreasonable regulations, providing tailored support at each stage of a project, and managing communication and conflict through on-site engagement — all aimed at simultaneously improving project viability and pace.
With the district's proposals now reflected in the public rental housing pricing reform, momentum is expected to carry over into further regulatory improvements. Seo spent four years as a Seoul Metropolitan Council member working on urban planning and housing issues, during which he led efforts to reform the "project viability correction coefficient" system to improve reconstruction economics.
Drawing on that experience, the district is now working through a dedicated regulatory reform team within its reconstruction task force to identify additional priorities — including revising mandatory ratios for urban parks and green space — and is actively consulting with the central government, the Seoul Metropolitan Government and other relevant agencies.
"Reconstruction is more than improving the living environment of individual complexes — it is a process of redesigning Nowon's urban fabric and infrastructure for the future," District Mayor Seo said. "We will actively reform unreasonable on-the-ground regulations, provide swift support for project progress, and build a 'future economic city of Nowon' where reconstruction revitalization creates synergy with economic growth projects including S-DBC."
seouldream01@heraldcorp.com
