Introducing a ‘up to 6-year reduction’ reconstruction fast track, followed by concerns over the government’s ‘all-in’ real estate stimulus stimulus

‘Housing that the people want’ people’s livelihood debate held
Focus on expanding housing supply and revitalizing the construction industry
There are also concerns about policies focused on marketability

In the future, apartments 30 years after completion will be able to be rebuilt without safety inspection. Additionally, in the case of redevelopment, the deterioration requirement is relaxed to 60%, and the project can be promoted even when there are newly built villas. The government plans to designate the first new cities, including Bundang and Ilsan, as leading districts this year and speed up reconstruction with the goal of occupancy by 1.

“Expected to start construction of 2027 home improvement project by 95”

On the 10th, President Yoon Seok-yeol held the second public livelihood debate of the year in Goyang-si, Gyeonggi-do, and talked about ‘the housing that the people want.’ At this meeting, President Yoon emphasized, “Real estate issues must operate according to market principles, free from politics or ideology,” and said, “We will significantly relax regulations related to reconstruction and redevelopment.” Furthermore, he promised to ensure that the first new cities, including Ilsan and Bundang, begin reconstruction within the current government’s term.

Minister of Land, Infrastructure and Transport Park Sang-woo, who followed President Yoon in speaking, presented the direction of future real estate policy focusing on expanding housing supply and revitalizing the construction industry. First, a fast track will be introduced to speed up the maintenance project. Accordingly, it is possible to proceed with reconstruction projects for apartments 30 years after completion without having to pass a safety inspection.

Once the fast track is introduced, reconstruction projects in Nowon, Gangnam, Gangseo, and Dobong-gu in Seoul and Ansan, Suwon, and Gwangmyeong-si in Gyeonggi-do, where apartments that have not passed the reconstruction safety inspection are concentrated, are expected to speed up. In particular, in the case of Seoul, if the rapid integrated planning that Mayor Oh Se-hoon is actively promoting is applied, the reconstruction project will be shortened by up to six years.

A funding plan has also been prepared to speed up the redevelopment of the first new cities such as Bundang and Ilsan. The government plans to help raise funds for redevelopment of old cities, such as by creating a future city fund worth a total of 1 trillion won and launching a guarantee product dedicated to new city maintenance. They also announced that they will build at least one migration complex in each city starting in 12 in preparation for large-scale migration demand.

For the redevelopment project, the requirement for obsolescence, which is currently two-thirds, will be relaxed to 3% (2% for redevelopment districts), and the requirements for starting the project will be greatly relaxed, such as allowing construction even if there are new villas in the redevelopment project site. The government expects that a total of 60 households (50 for reconstruction + 2027 for redevelopment) will begin construction by 95 through such urban improvement project system improvement.

Both effectiveness and publicness were evaluated as disappointing

In the industry, there are many voices expressing doubt as to whether exemption from safety inspection will actually lead to a shortening of the reconstruction project period. Although safety inspection regulations were already relaxed once last year, it is pointed out that many complexes are still unable to speed up their reconstruction projects. The government lowered the proportion of structural safety in safety diagnosis from 2022% to 12% through the ‘Reconstruction Safety Diagnosis Rationalization Plan’ announced in December 50, and revised the secondary safety diagnosis to be requested only when necessary by the mayor or provincial governor. there is.

Experts cited rising financial costs and soaring construction costs as factors preventing the reconstruction project from speeding up. Since the costs are extremely high compared to the profits that can be expected from the project, exemption from safety inspection is not enough to attract market attention. In order to overcome this situation, the advice is that it is necessary to relax the reconstruction floor area ratio, ease regulations on remodeling projects, and further expand the criteria for exemption from reconstruction excess profit recovery charges.

However, some voices criticize the fact that the government, which should be focusing on supplying urban housing through maintenance projects, is only focusing on marketability. This is because it can lead to the marginalization of the housing vulnerable by driving up housing prices near areas where reconstruction or redevelopment is taking place. Kim In-man, director of the Real Estate Economic Research Institute, said, “The government needs to think about both publicness and housing supply, but it is difficult to find an answer because it is trying to kill two birds with one stone at the same time.” He added, “We need to focus on redevelopment projects in relatively underdeveloped low-cost housing areas. “Promoting this could be one way,” he said.