[아주 쉬운 뉴스 Q&A] What is a public maintenance project?

As the government recently announced candidate sites for public redevelopment in Seoul and the results of pre-consulting for public reconstruction, interest in public maintenance projects is growing. The main content of the public maintenance project is to expand the supply of housing in the metropolitan area, including Seoul, by revitalizing maintenance projects involving the public in the city center.

Public institutions, such as LH and SH Corporation, participate in the urban maintenance project where project promotion is sluggish, and a part of the public housing is secured instead of borne by the public for the insufficient project cost. From the perspective of the owners, the uncertainty that has been pointed out as an obstacle to the redevelopment project can be removed to activate the project, and the government can increase the supply.

Q. How is the public redevelopment project progressing?

A. Eight locations were selected as candidates for public redevelopment, including Heukseok 2 district in Dongjak-gu, Seoul and 13-14 districts in Yangpyeong, Yeongdeungpo-gu. Although all candidate sites are located in the station area, the business is drifting for an average of 10 years or more due to lack of business or conflict with residents.

When public redevelopment is carried out in all eight locations, the supply to these areas will total 4700 households. The government plans to provide various support such as raising the floor area ratio, easing urban regulations, excluding the application of the pre-sale price limit, financing project expenses, and simplifying the licensing process to help the business in these regions.

Q. Are there any problems in the process of the public redevelopment project?

A. What is worrisome is that due to the nature of the maintenance project, there is still a possibility that there is a conflict among members, and housing supply will not be as fast as the government intended.

Earlier, Dapsimni District 17, Dongdaemun-gu, Seoul, saw the advantage of avoiding the pre-sale price ceiling, and applied for a public redevelopment project, but eventually withdrew the application due to concerns about deterioration in profitability and value decline due to the high rental housing ratio requirement. This means that even among the owners, judgments about whether or not they are good or bad may be different.

There is also a risk of stimulating house prices as the maintenance business is underway.

The government plans to designate the area of ​​these maintenance zones as land transaction permission zones to prevent the inflow of speculative forces. In order to prevent’split the stake’, the date of the calculation of rights is scheduled to be announced on September 21, last year, the date of the business competition. It means that if you have split your stake in order to increase the number of targets for sale, such as building a new villa after this day, it means that it will not be recognized.

Q. How about public reconstruction?

A. Korea Land and Housing Corporation (LH) and the Korea Real Estate Agency participated in a preliminary consulting analysis on 7 complexes including Shinbanpo 19, Mangwoo 1, Junggok, Shingil 13, Miseong Kunyeong, and Gangbyeon Gangseo on the 15th. After completing the program, the results were informed to the union, and the floor area ratio was found to increase by 96% points on average compared to private reconstruction projects.

However, the opinion that public reconstruction will be difficult to succeed in the current situation prevail.

As a result of preliminary consulting, only small apartments with 500 or less households, such as single-person apartments, are showing interest in public reconstruction, which is currently under the goal of supplying 50,000 households. Even in this case, 2771 households can be supplied only if all of them show willingness to do public reconstruction. It is 5% of the original target amount.

There were a total of 15 complexes that applied for pre-consulting last year, and some of them withdrew from their participation, and some were not eligible for pre-consulting because they did not pass the reconstruction safety examination. In particular, all complexes with more than 1,000 households, including Eunma Apartment in Gangnam-gu (4424 households), Jamsil Jugong 5 complex (3930 households) in Songpa-gu, and Cheongnyangri Miju (1089 households) in Dongdaemun-gu, have withdrawn their application for preliminary consulting.

Q. Are there any challenges to be solved in order for the public maintenance project to succeed?

A. As the government discloses public redevelopment and public redevelopment plans, expectations for the expansion of urban housing supply are rising. However, as there is still a feeling of rejection against public-based projects, there are still concerns that there may be difficulties in pursuing the project.

For this reason, the government was concentrating on breaking the prejudice that’public reconstruction is bad business performance’ by presenting’additional simulation analysis results’ with over 1000 households in mind.

However, it is known that the additional incentives required by the market are not yet considered, and it remains to be seen whether a meaningful result will come out of the second outcome.