President Stresses "Speeding Up Maintenance Projects"... Seoul Proposes "10 Key Legislative Amendments" to Central Government

Proposal to Amend Urban Maintenance Act Submitted to Ministry of Land

City Recommends Easing Regulations Again, Including 70% LTV for Relocation Loans

Measures Proposed to Ease Floor Area Ratio for Private Maintenance Projects

Consent Rate for Redevelopment Association Formation Lowered to 70%

Proposal to Shorten Project Timelines by Reducing Notification Period

The Seoul Metropolitan Government announced on June 15 that it has submitted 10 proposed amendments to laws and regulations to the central government in order to accelerate redevelopment and reconstruction projects and expand urban housing supply. This move comes after President Lee Jaemyung recently emphasized the need to "expand supply and speed up maintenance projects to stabilize real estate prices." The city government has identified obstacles and improvement measures based on field observations and submitted its proposals accordingly.

Seoul Mayor Oh Sehoon visited the Ahyeon 1 District site in Mapo-gu, where public redevelopment is being promoted, on April 13th and announced plans to advance the "Seoul-style Public Participation Housing Project." The Seoul Metropolitan Government

According to the city, the proposals include both regulatory easing measures previously conveyed by the Seoul Mayor in meetings with the Minister of Land, Infrastructure and Transport, as well as additional system improvement measures identified through field feedback. The 10 proposals are categorized into four areas: regulatory relaxation, improvement of business profitability, reduction of project timelines, and protection of resident rights.

"For Redevelopment Projects Restricted by Lending Regulations, Increase Relocation Loan LTV to 70%"

The city argues that the financial burden on residents during the relocation phase—which directly affects construction schedules—must be alleviated. Therefore, it has proposed raising the loan-to-value (LTV) ratio for relocation loans from the current 40% applied in speculation-prone districts (the same as general mortgage loans) to 70%. Since relocation loans are not for purchasing new homes, but essential operational funds needed for smooth relocation during construction, the city believes these loans should be regulated separately to ensure project momentum.

The city has also proposed easing the "restriction on transfer of association membership status," which currently limits property rights and disrupts transactions. Specifically, it proposes temporarily relaxing the restriction for three years and, for small-scale maintenance projects, adjusting the restriction's effective date to after project plan approval. This would help secure the necessary rate of resident consent more quickly, thereby facilitating smoother project progress.

Proposal to Ease Floor Area Ratio and Green Space Requirements for Private Maintenance Projects

To improve the business feasibility of redevelopment and reconstruction, the city has proposed several measures: relaxing the required proportion of rental housing for private maintenance projects and increasing the legal maximum floor area ratio (FAR) to 1.2 times the current limit; easing duplicate counting of rental housing in small-scale housing maintenance projects; and establishing new legal grounds for exempting or relaxing park and green space requirements in land development districts and similar areas.

The city aims to extend the legal maximum FAR relaxation benefits, currently available only for public maintenance projects, to private projects as well—allowing application of up to 120% of the legal maximum FAR. Additionally, to ensure fairness, the required proportion of rental housing for redevelopment projects (built to qualify for FAR relaxation) should be lowered to match the reconstruction standard of 30% of the relaxed FAR.

The amendment to the Urban and Residential Environment Improvement Act, which passed the National Assembly’s standing committee in February, allows public maintenance projects to increase the legal maximum FAR by up to 1.3 times. Under current law, to obtain FAR relaxation, redevelopment projects must build rental housing of at least 50% of the increased FAR at the national housing scale, whereas for reconstruction projects, the minimum is 30%.

View of apartments seen from Lotte World Tower in Songpa-gu, Seoul. Photo by Yonhap News

The city also proposed revising standards under the Act on Urban Parks and Green Areas to allow apartment complexes in land development districts—with already sufficient green space—to be exempt from, or subject to eased, park and green space requirements during reconstruction.

Additionally, under current rules, to build up to the legal maximum FAR in small-scale housing maintenance projects, 20% of all units must be rental housing. To prevent double-counting of rental housing provided as a public contribution when upgrading zoning, the city is requesting an amendment to the Special Act on Vacant Houses and Small-Scale Housing Maintenance. By revising the method for counting rental housing—which has been unnecessarily duplicated—the city aims to improve business conditions for small-scale maintenance projects, which already face challenging circumstances.

For redevelopment projects under the Urban and Residential Environment Improvement Act, required rental housing and national housing-scale rental units are calculated separately, not duplicated.

Proposal to Lower Association Formation Consent Rate to 70%... and Shorten Timeline to Construction Start

To streamline administrative procedures and reduce project timelines, the city has proposed: lowering the consent rate required to establish a redevelopment association; shortening the notification period to landowners before applying for association establishment approval; conducting integrated reviews in advance for minor changes to maintenance plans; and improving procedures for selecting contractors and other key partners.

Following policy measures announced last September 7, the government has lowered the consent rate for reconstruction association establishment approvals from 75% to 70% through subsequent legislation. The Seoul Metropolitan Government recommends applying this reduced consent rate (from 75% to 70%), currently applicable only to reconstruction, to redevelopment projects as well, in order to shorten the time required to form associations and bolster project momentum.

The city suggests cutting in half the pre-notification period to residents before applying for association establishment approval—from 60 days to 30 days prior to the application date.

The proposals also include improving contract standards so that associations can award contracts to key firms by private negotiation after a single failed competitive bid, rather than requiring two failed tenders as is currently the case. This reflects the reality that, due to rising construction costs and other challenges, competitive bidding for contractors is often not feasible for many maintenance projects.

Pursuing Resident Rights Protection and Rationalization of Project Operations

The city has also called on the government to introduce measures to protect residents’ rights and prevent conflicts after project completion. Even if the association is required by law to disclose its member list, the city proposes that members’ personal phone numbers only be disclosed with prior consent, thereby preventing privacy violations.

Furthermore, the city requested amendments to the Multi-Family Housing Management Act to ensure that public walkways and shared community facilities, agreed upon during project approval, are reliably managed and maintained even after apartment complexes are fully constructed.

Choi Jinseok, Head of Housing Policy at the Seoul Metropolitan Government, stated, "Redevelopment and reconstruction are the most effective means to expand housing supply in urban areas. We will continue to work with the central government to improve unreasonable regulations and rationalize procedures that hinder project advancement in the field, so that housing can be supplied more quickly."

This content was produced with the assistance of AI translation services.