Overlapping regulations stall 150,000 Seoul redevelopment units

About 153,000 homes in Seoul’s redevelopment and reconstruction projects remain stalled due to overlapping regulations, according to new data. Seoul’s main housing supply channels, redevelopment and reconstruction, have struggled to gain momentum. Experts say the government’s Oct. 15 real estate plan, which designated 12 Seoul and Gyeonggi areas as land transaction permit zones, will stabilize prices only if overlapping regulations are reviewed. They also urge more aggressive land acquisition for new urban housing.

Among the slowest projects, the bottom 25 percent took an average of eight years and seven months to complete safety inspections and form promotion committees, which mark the start of redevelopment. The fastest 25 percent finished the same steps in about three months.

Experts attribute the delays to overlapping regulations and rising construction costs, which have increased financial burdens on homeowners. The reconstruction profit recapture system, which limits gains from post-redevelopment home value increases, is a major obstacle.

The Korea Institute of Civil Engineering and Building Technology reported that the construction cost index exceeded 131 in July, more than 30 percent higher than in 2020. Although the government said last year it would abolish the profit recapture system, it has since decided to enforce it. The Oct. 15 real estate measures have also made it harder for homeowners who cannot afford rising costs to sell their properties and exit redevelopment zones.

Critics say the government’s plans to use idle urban land and new development sites are insufficient to meaningfully boost housing supply. "Rising construction costs have changed the redevelopment environment and called for a review of how public contributions are managed to expand supply," said Kim Deok-rae, head of housing policy research at the Housing Industry Research Institute.

Amid concerns over housing shortages, the Democratic Party announced Oct. 20 it will form a Housing Market Stabilization Task Force to support the government’s real estate measures. The party also plans to release a detailed Seoul metropolitan housing supply map by year-end and pass legislation in November to allow simultaneous processing of redevelopment and reconstruction permits.


윤명진 기자 mjlight@donga.com