[Boomerang Effect of High-Density Apartments ⑧] "Expanding Floor Area Ratio Has Limits... Urban Planning Needs Complete Overhaul"

'Aging High-Density Apartment Maintenance' Expert Roundtable
Refining Customized Remodeling, Expanding Affordable Housing Supply
"Intent to Increase Asset Value Outweighs Residential Environment Improvement"
Consider Opportunity Costs and Benefit

Real estate experts agree that the issue of aging, high-density apartments in central cities such as Seoul is no longer a distant concern. On June 11, a roundtable discussion was held at the headquarters of The Asia Business Daily in Jung-gu, Seoul, with the participation of Changheum Byun, Professor of Public Administration at Sejong University, Changmoo Lee, Professor of Urban Engineering at Hanyang University, Jo Jeongheun, Chair of the Land and Housing Committee at the Citizens' Coalition for Economic Justice, and Taehee Lee, Senior Research Fellow at the Korea Research Institute for Construction Industry.

They advised that for already built high-density apartments, it is better to maintain the lifespan of the buildings through ongoing management rather than redevelopment, and that relevant authorities should re-examine overall urban planning, including assessing housing densities in both central and outlying areas. In particular, they noted that as demand for high-rise, high-density apartments in city centers remains strong, solutions to lower entry barriers are necessary.

Changmoo Lee, Professor at Hanyang University (clockwise from top left), Changhum Byun, Professor at Sejong University, Jeongheun Cho, Chair of Land and Housing Committee at Citizens' Coalition for Economic Justice, and Taehee Lee, Research Fellow at Korea Research Institute for Human Settlements, are speaking at an expert roundtable held at The Asia Business Daily on the 11th. Photo by Huh Younghan

Q. What is the appropriate way to manage and renovate old high-density, high-rise apartment buildings?

▶Taehee Lee, Senior Research Fellow: Remodeling to increase the number of units, as seen recently in a case in Yongsan-gu, Seoul, is not the answer. Construction costs are not low, and the market appeal of the apartments does not improve. There is also no notable improvement in living environments or urban landscapes. With very few exceptions, most sites have low profitability, making redevelopment difficult. Therefore, there is a need to refine business models such as customized remodeling.

This approach should focus on improving living environments only as needed and within affordable limits, without requiring risky and costly relocations. Policy support is needed, such as easing urban planning or building regulations, as well as financial and tax support that allows for long-term installment payments.

▶Jo Jeongheun, Chair: The Seoul Metropolitan Government has been consistently proposing measures to enhance project profitability, but it seems that these are more focused on increasing asset values than meeting the social need for improved living environments. During the period of rapid growth, private capital could be used to generate profits in central city areas. However, such development models are no longer viable. Apartment prices in Seoul have far exceeded what ordinary citizens can afford, yet measures such as increasing floor area ratios are still being implemented to keep the system running. This will inevitably become a heavy burden for future generations.

▶Changmoo Lee, Professor: It is necessary to approach the issue from the perspective of opportunity costs and the social costs and benefits for the city as a whole and its residents. If high-density development is not permitted in areas facing development pressure, people will be pushed to the outskirts. Living in outlying areas results in significant social costs due to longer commutes. If the goal is to optimize costs while enjoying the benefits of urban aggregation, the costs of not accepting high-density development—such as inconvenience from long-distance travel and environmental pollution—must also be considered.

An apartment complex in Gangnam-gu, Seoul. Photo by Yonhap News

Q. What are the problems associated with high-density apartments?

▶Changheum Byun, Professor: The real issue is not whether apartments are high- or low-density, but rather the trend of creating excessively large and expensive complexes through redevelopment projects. As complexes grow, they become isolated like islands within the city, fragmenting urban functions. Extended project timelines also lead to higher construction costs, which are then recouped by building more expensive apartments.

In response to high housing prices, the government pursues supply-boosting policies, but paradoxically, new complexes end up driving up surrounding prices even further. I believe further high-density development is acceptable. The real concern is how to provide affordable housing or homes where current residents are not displaced, and how to create better neighborhoods rather than just focusing on investment projects. The current discourse, which emphasizes rapidly building more units or launching large corporate-branded apartment complexes, is not desirable.

▶Jo Jeongheun: The intention behind increasing the floor area ratio is to facilitate the return of original residents through high-density development, but this risks distorting the process of resource allocation. Existing residents may be content with gradually upgrading their 200 million or 300 million won homes, but the promise is to replace them with apartments worth 1 billion won without significant personal investment. Projects proceed, but sales prices rise and policies are designed to encourage investment. If housing prices increase in this way, it is questionable whether residents can truly return. Expanding policy tools like floor area ratios could also fuel speculation.

▶Changmoo Lee: The creation of new apartments leads to a chain reaction of residential mobility and upgrades in residential consumption. This is not just a matter of adjusting local housing consumption, but rather there is a clear, broad chain of residential migration and consumption upgrades across wider areas.

Apartment complexes in the Bundang district of Seongnam City, the first new town development area. Yonhap News

Q. Is it possible to redevelop the first-generation new towns and aging planned cities? Are there ways to improve project profitability other than increasing the floor area ratio?

▶Changmoo Lee: In Bundang, the emergence of the employment hub in Pangyo has created market pressure for high-density development. As a result, there is a need to encourage redevelopment around station areas by increasing the floor area ratio. On the other hand, will redevelopment happen in Ilsan simply by raising the floor area ratio to 500%? There is no development pressure, and implementing such urban regeneration projects itself becomes a social burden.

▶Changheum Byun: Planned cities have infrastructure scaled to their populations and number of households. Renovating these areas requires an overall approach, not the current practice of pilot projects in select complexes. A pilot model cannot be applied to every complex. The same goes for programs like New Towns or Seoul's small-scale residential renovation model, Moa Town, which are currently being promoted. These are attempts to enhance project profitability on an individual basis, but they ignore the burden of infrastructure. A system is needed to allocate roles and provide infrastructure support under a comprehensive plan.

▶Taehee Lee: There needs to be a system for cross-subsidization, where cash generated from profitable areas is used to support less profitable ones. Local governments also prefer in-kind contributions over cash, but even partial monetization can help secure resources for minimum viability in less profitable areas—what is known as gap funding. Rather than matching specific sites through combined renovation, it would be less controversial to use a city-wide urban regeneration fund as a framework for cross-subsidization.

▶Jo Jeongheun: Mechanisms to capture development gains are weak. Public involvement or floor area ratio incentives in less profitable areas should aim to promote the public good, but if the sole objective is maximizing profit, there are limitations. In many areas, it is virtually impossible to generate development profits, so, departing from the conventional profit-driven approach, it is time for society to consider ways to secure public benefit through public intervention and targeted fiscal investment, even if profitability is low.

A roundtable discussion on high-density apartment redevelopment was held at The Asia Business Daily headquarters. Jo Jeongheun, Chairman of the Land and Housing Committee at the Citizens' Coalition for Economic Justice (from left), Professor Byun Changheum of Sejong University, Professor Lee Changmoo of Hanyang University, and Research Fellow Lee Taehee of the Korea Research Institute for Construction Industry are engaged in discussion. Photo by Huh Younghan

Q. Is high-rise, high-density development sustainable?

▶Changmoo Lee: In the case of the Apgujeong redevelopment, there was considerable debate during the planning phase. The resolution was to build taller but slimmer buildings, thereby increasing sunlight and securing open spaces such as parks, green areas, and plazas. From an urban planning perspective, it is possible to design layouts where multiple people can enjoy these open spaces.

▶Changheum Byun, Professor: In foreign cities, each city establishes its own planning benchmarks. For example, in Cologne, Germany, all buildings must be lower than the Cologne Cathedral. Similarly, along the Han River, there should be view corridors to maintain openness, but in reality, these are often blocked by buildings, forming high walls. Urban planning should ensure that view corridors are strictly maintained from designated points.

If principles are strictly followed, high-rise buildings themselves should not be dismissed as inherently negative. In Seoul, the housing model is essentially limited to high-rise apartments or low-rise (four stories or less) multi-family dwellings. There is a need for intermediate low-rise housing models. Since replacing all existing low-rise neighborhoods with high-rises is not feasible, comprehensive reconsideration of existing urban planning regulations such as the Building Act and Parking Act is necessary to develop models that can provide affordable housing.

Discussion: Choi Ilkwon, Editor for Economics and Finance and Head of Construction and Real Estate, Organized by: Choi Daeyeol, Reporter

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