Nowon-gu in Seoul said the government's Aug. 13 real estate package is expected to significantly improve the viability and conditions of reconstruction and redevelopment projects in the district, district mayor Seo Jun-o said.
The package includes several measures that Nowon-gu had identified at project sites and repeatedly proposed to the central government, including relaxed standards for park and green-space donation requirements, a more realistic acquisition price for rental housing, and rationalized relocation loan rules.
The district said the reforms are expected to have an outsized impact given the high proportion of aging apartment complexes and the concentration of reconstruction projects in the area. Its analysis found that 14 project sites would be directly affected by the measures.
The most notable change involves easing the standards for securing parks and green space. Under the existing rules, projects with a high share of smaller units faced larger mandatory park area requirements based on unit count, which weighed on project viability. Nowon-gu had repeatedly urged the government to revise the uniform standards, noting that the district is already well-served by parks and green space — including areas adjacent to Buramsan and Suraksan — and that many apartment complexes border existing green zones.
If the mandatory park and green-space burden is eased under the new package, the district estimates that about 500 additional units could be supplied across five project sites in Nowon-gu. Because the additional supply would require no new land acquisition, the measure is expected to both expand housing supply and improve the financial viability of reconstruction associations.
The reform to the acquisition price of rental housing built through reconstruction projects is also expected to provide direct relief to Nowon-gu's redevelopment pipeline.
Under the previous system, rental housing built through redevelopment projects was acquired at relatively low prices despite rising construction and project costs, placing a financial burden on reconstruction associations. The government's move to bring acquisition prices in line with actual costs is expected to improve association profitability and reduce the contribution burden on individual members.
The Sanggye Jugong 5 complex, which is approaching approval of its management and disposal plan, is a prime example. The complex has 55 rental units planned, and if the reform is applied, the average acquisition price per unit for rental housing with an exclusive use area of less than 85 square meters is expected to rise by about 100 million won ($72,300). The district estimates that the resulting improvement in project finances would reduce each association member's contribution by about 6 million won.
Conditions for securing relocation funds — which residents consistently cite as one of their biggest challenges during reconstruction and redevelopment — will also improve. Previously, relocation loan limits were calculated primarily based on the pre-project assessed value of existing housing. Going forward, the post-project assessed value of the newly built housing will also be factored in.
As a result, association members facing relocation at sites such as the Sanggye District 2 redevelopment promotion zone are expected to have greater capacity to secure relocation funds. In addition, a new loan guarantee product will be introduced to allow contractors and associations to borrow from financial institutions and on-lend additional relocation funds to members.
Nowon-gu said it will also pursue its own measures to shorten project timelines, so that the benefits of the government's reforms are felt at actual project sites as quickly as possible.
Following the launch of a rapid reconstruction and redevelopment task force — the first official act signed by District Mayor Seo upon taking office in the ninth directly elected term — the district is now preparing a project timeline reduction plan that includes a preliminary consent document review system, parallel processing of administrative procedures, and standardized inter-department consultation guidelines.
The core of the approach is to move away from sequential administrative processing and expand preliminary review and parallel handling to eliminate unnecessary waiting time during the permitting process. The district also plans to offer tailored consulting sessions for associations and preparatory committees on the Aug. 13 package, analyzing the stage and conditions of each project site and advising on applicable measures — including the eased park and green-space standards, higher rental housing acquisition prices, and improved relocation loan rules — to help incorporate them into actual project plans.
"The Aug. 13 package carries great significance in that the reform proposals Nowon-gu identified at project sites and consistently put forward have now become actual policy," District Mayor Seo said. "We will ensure that the effects — expanding supply capacity through eased park and green-space standards, and reducing resident burdens through rental housing acquisition price and relocation loan reforms — are genuinely felt at project sites." He added, "We will combine the government's regulatory improvements with Nowon-gu's swift administrative support to raise both the viability and the pace of reconstruction and redevelopment, and focus our full administrative capacity on delivering the comfortable residential environment our residents want as soon as possible."
seouldream01@heraldcorp.com
