The reconstruction complex in Yeouido, where the project was virtually halted at one time, is expected to speed up the project along with the deregulation of the Seoul Metropolitan Government.
Recently, the city of Seoul met with officials from various reconstruction complexes such as the Yeouido Demonstration and Plaza, and expressed its intention to give incentives to limit the floor height if the provisions required by the city are accepted.
In the real estate industry, analysts say that such remarks are the start of Seoul Mayor Oh Se-hoon's real estate policy, which is based on deregulation and supply expansion.
In particular, in the case of Yeouido apartments, some complexes are running toward the 50th anniversary of completion, but the reconstruction project has been stalled due to various regulations.
As Seoul Mayor Oh Se-hoon promised to normalize the reconstruction, interest is growing as to whether the Yeouido reconstruction complex will gain momentum in earnest.
“I felt a will to supply housing in a hurry by loosening various restrictions such as ceiling height restrictions.”
This is the story of a representative of the Yeouido A Reconstruction Apartment Association.
According to related industries, the city of Seoul recently met with officials from the Yeouido reconstruction complex and announced that if they cooperate with the public contribution rate or social mix plan required by the city, they can provide incentives, such as easing restrictions on the ‘15th floor and below’. The Seoul Metropolitan Government said, “There are no complexes that have eased the ceiling height restrictions or have confirmed their application right now.”
Until now, the Seoul Metropolitan Government has restricted the floor height to less than 35 stories in type 3 general residential areas and 15 stories or less in areas adjacent to the Han River in accordance with the ‘Seoul City Skyline Management Principle’ announced in 2013. In addition, after including it in the ‘2030 Seoul Plan’, which is the basic urban plan, all reconstruction plans that exceed this standard have been rejected from deliberation.
At that time, the Seoul Metropolitan Government explained that the purpose was to prevent some complexes from monopolizing the right to sunlight and view, and to harmonize with the surrounding natural landscape.
However, in the market, it was a general reaction that there was an aspect that was used as a means to actually prevent reconstruction by lowering the business viability of the reconstruction apartment complex.
In order to ease the ceiling height restrictions, the Seoul Metropolitan Government is said to be considering a plan to delete or relax the existing floor height restrictions in the ‘2040 Seoul Plan’. Mayor Oh’s new urban planning initiative, the ‘2040 Seoul Plan’, will be announced at the end of this year. During his previous tenure, Mayor Oh insisted on the development of the Han River through the ‘Han River Renaissance Project’, and even made a promise to ease the ceiling height restrictions during the April 7 by-election. It is highly likely that such contents will be reflected in the Seoul Plan.
As the floor height restrictions are eased, the residents of Yeouido apartments, which are undergoing reconstruction, are buzzing with anticipation. If the ceiling height restrictions are relaxed, the reconstruction project in Yeouido is also expected to gain momentum.
Currently, there are 16 apartment complexes that can be reconstructed in Yeouido, with about 8,000 households.
The Yeouido Reconstruction Complex has several characteristics. First of all, most of the complexes are very old. Most of the complexes have already exceeded the standard of 30 years for reconstruction, and there are many that have exceeded the age of 40 years. The pilot apartment, built in 1971, is in its 50th year this year. There are many parks and green areas, so the residential environment is relatively good.
Considering the feasibility of reconstruction, there are also disadvantages. Compared to the adjacent Mok-dong new town complex, the land support is low. The low level of support for the site acts as a factor that lowers the feasibility of reconstruction.
Is it because of this? Among the 16 complexes in Yeouido, only pilot apartments and Gwangjang Apartments have completed the establishment of cooperatives. All other complexes are still in the promotion committee stage. In addition to this, several regulations overlapped, and the reconstruction efforts of several apartment complexes in Yeouido were not easy even when looking at 50 years of completion. In particular, the regulation of the number of floors is a problem directly related to the business performance of the reconstruction project. Experts expect that even if only the floor number regulation is abolished, the pace of the business of many reconstructed apartments will increase.
Currently, the whole area of Yeouido is tied up as a land transaction permission zone. As a result, there are not many items for sale and the trading volume has decreased significantly. However, the price of the Yeouido reconstruction complex is skyrocketing as the city of Seoul indirectly hints at deregulation.
The pilot apartment received a safety diagnosis grade of D in 2017, and the reconstruction project was confirmed, and it was decided to proceed with the reconstruction in a trust manner. There is even a plan to transform it into 1996 households with a maximum height of 35 stories through reconstruction. However, the project had been suspended for the past three years as the Seoul Metropolitan Government decided to suspend the ‘Yeoido Tong Development (Master Plan)’ in 2018.
However, after the election of Mayor Oh in April of this year, the image is once again shaken up. Last July, the exclusive 156 m2 was traded at 3 billion won, making a new record. It is the first time that the area has been traded in excess of 3 billion won. Most of the asking prices currently for sale are between 3.3 billion and 3.4 billion won, and only the lower floor of the first floor is priced below 3 billion won. The 105 m² dedicated to ‘Hanyang Apartment’ in Yeouido, Yeongdeungpo-gu, Seoul also recently traded at 1.96 billion won, breaking new records.
Another official in the industry said, “Even if there is no floor height restriction relaxed or confirmed right now, the price of the Yeouido reconstruction complex is skyrocketing as the deregulation signal itself is transmitted to the market.” Unlike other regulations, the relaxation of floor height restrictions is a problem that can be solved only with the authority of Mayor Oh Se-hoon.
The policy pursued by the Seoul Metropolitan Government is not only the abolition of the floor number regulation. It is also being considered for integrated reconstruction of the ‘Sambu·Mokhwa’ apartment complex and the ‘Hwarang·Jangmi·Daegyo’ apartment complex located on the Han River in Yeouido. In these complexes, we are thinking about raising the maximum to 50 floors or higher on condition that donations are accepted.
Several methods are being discussed to revitalize the reconstruction of Yeouido, but there are also obstacles.
First, there are concerns about rising house prices. Since the inauguration of Mayor Oh Se-hoon, house prices in Seoul have risen sharply, centering on reconstruction complexes. From a mid- to long-term perspective, we agree on the need to revitalize reconstruction to expand housing supply, but there are many voices that countermeasures that can compensate for some side effects should be prepared together.
The opposition of some apartment owners located close to the Han River in the process of integrated reconstruction is also a variable. Some apartment owners oppose the consolidation reconstruction on the grounds that they may be at a disadvantage in terms of the number of dongs during the consolidation reconstruction process.
The task is to resolve conflicts among residents that may arise in the process of increasing the floor area ratio of Yeouido and using the area as public land.