Seoul city hall blames Park Won-soon era policies for loss of 430,000 housing units

The Seoul Metropolitan Government on Friday sharply criticized housing policies pursued under former Mayor Park Won-soon, saying the cancellation of redevelopment zone designations wiped out the supply base for about 430,000 housing units and that "the shock from 10 years ago is now materializing as a supply cliff." The city said it will focus its efforts on translating the supply-base recovery work undertaken since Mayor Oh Se-hoon took office into concrete ground-breaking and completion results.

The city made the assessment in a white paper titled "A 20-year assessment and reflection on Seoul's housing supply policy," concluding that losing housing supply opportunities through redevelopment zone cancellations, combined with the massive public funds poured into urban renewal projects, led to a shrinking supply base and a sharp drop in ground-breakings.

The white paper said the housing supply base that had expanded through the New Town projects of the 2000s was significantly rolled back under the Park administration. According to the city, large-scale area development was introduced starting with the designation of three pilot New Town sites in 2002, and during Oh's first term the city drew up supply plans covering 35 New Town and balanced-development promotion districts, 297 redevelopment zones and a total of 309,000 units.

Under Park, 389 of the city's 683 redevelopment zones — about 57 percent of the total — were removed from the redevelopment program between 2012 and 2020. The white paper noted that redevelopment work has since resumed in 177 of those 389 canceled zones, adding that "the fact that a significant number of areas are again pursuing redevelopment shows that the cancellation decisions did not provide a solution for improving residential environments or housing supply."

The city also said the cancellation process failed to adequately secure residents' consent or procedural legitimacy. Of the 389 canceled zones, 66 (17 percent) fell into Type A — canceled by administrative authority based on ordinance revisions without any resident survey — while 264 (68 percent) were Type B, where resident surveys or opinion-gathering processes were conducted but found to be procedurally deficient. The remaining 59 zones (15 percent) were Type C cancellations carried out under sunset provisions.

Among Type A cases, the white paper cited seven zones within the Changsin-Sungin redevelopment promotion district that were canceled on the grounds of low project feasibility. The Sajik District 2 zone was unilaterally canceled by the authorities without conducting a resident survey, on the basis of preserving historical and cultural value — a decision the Supreme Court later ruled unlawful. The city said the ordinance that had served as the legal basis for that cancellation was subsequently deleted. A Type B case was also cited involving Jangwi District 15, where official notices were processed as public announcements rather than direct mail, without verifying the correct addresses or contact information of absent residents.

The city said this contraction of the supply base caused annual ground-breakings from redevelopment projects to fall from an average of 29,000 units per year in 2016–2020 to about 15,000 units per year in 2021–2025.

The white paper said a total of 1.1 trillion won ($819 million) in public funds was spent on urban renewal projects that Park had promoted as an alternative to redevelopment — about 911 billion won on urban renewal activation projects and about 185 billion won on residential environment improvement projects. The city said a significant portion of that spending went to areas converted from canceled redevelopment zones to urban renewal projects, only to later resume redevelopment, effectively becoming sunk costs. "The result was pouring tax money into the same land twice," the city said.

The city noted that while Seoul's resident population has fallen by about 18 percent over the past 15 years, the number of households has risen by about 14 percent. It added that about 1.93 million aging homes will require redevelopment within the next decade, yet acquiring new residential land is virtually impossible, meaning residents are paying the price for the shrinking supply base.

The city said that since Oh took office, it has continued to improve project viability, shorten permit timelines and manage on-site progress across his seventh and eighth terms. During the seventh term, the city narrowed regional disparities in project viability by introducing a profitability adjustment coefficient, recognizing existing floor-area ratios and easing public-contribution requirements. In 2022, it also introduced the Moa Housing and Moa Town schemes to allow aging low-rise residential neighborhoods unsuitable for large-scale redevelopment to undergo renewal.

The city said the number of newly designated redevelopment zones rose to 172 between 2021 and 2025, more than double the 77 designated in the preceding five years from 2016 to 2020. "To meet our target of supplying 310,000 units by 2031, we will mobilize all available administrative resources to remove bottlenecks at each project stage and ensure a seamless path through to ground-breaking and completion," it said.