"It Costs as Much as a New Home to Renovate?"... Regional Apartments Left Helpless Despite Burst Pipes and Leaks [Boomerang of High-Density Apartments ③]

Floor Area Ratio Nears 300% in Non-Capital Complexes

Shortage of General Sale Units Hampers Redevelopment

Remodeling Stymied by High Contribution Fees and Consent Rates

Eased Floor Area Ratio Becomes Key to Project Viability

While Seoul faces its own challenges, the situation for high-density apartment complexes in regional cities is even more dire. The construction costs of building apartments are similar in both the capital region and local areas, but there is a vast disparity in housing prices. Even if old complexes with floor area ratios approaching 300% are demolished and replaced with new apartments, there simply is not enough general-sale inventory. The basic formula for reconstruction—offsetting high construction costs with profits from general sales—simply does not work in these areas. The calculation for reconstruction and remodeling becomes even more challenging, as one must also contend with elderly owners who do not wish for changes to their residences and the looming threat of population decline.

On the 11th, I visited Apartment Complex A in a large regional city. Having been completed over 20 years ago, this complex now faces daily inconveniences due to aging infrastructure. The apartment manager explained, "The roots of the landscaping trees in the complex have burrowed deep into the ground and are damaging the old pipes, causing over 130 incidents of pipe bursts or water leaks each year. We have to carry out repairs every time this happens." While a comprehensive replacement of the infrastructure is urgently needed, residents are left frustrated and unable to take action. This is because the option of improving their living environment through a maintenance project is entangled in layers of regulations and cost issues.

Reconstruction, which would typically be the first option considered, was ruled out early on. Having already pushed the floor area ratio to its legal limit, the project is not viable under current laws. Even remodeling, which involves retaining the building's structure and upgrading it, is out of reach due to the prohibitively high contribution fees. A representative from Apartment A’s remodeling committee remarked, "If my home is worth just over 10 million won per pyeong in this neighborhood, and I am asked to pay the same 10 million won per pyeong just to renovate, which resident would willingly sign off on such a plan?"

Unlike reconstruction, where regulations have been relaxed, remodeling still maintains the previous consent requirements, making it difficult to even get started. For reconstruction, the threshold for establishing a union has been lowered from 75% to 70%, but for remodeling, 66.7% consent is required to form a union, and 75% of residents must approve at the construction permit stage. Even if residents consider large-scale repairs to essential facilities without relocating, they are still held back by complex administrative procedures such as obtaining permits and updating property registrations.

Regional maintenance projects are also closely linked to population issues. Major regional cities such as Busan, Daegu, Gwangju, and Ulsan have already passed their population peaks and are now in decline. For example, Busan's population dropped from about 3.89 million in 1995 to about 3.26 million in 2024, a decrease of more than 600,000 over 30 years. Daegu’s population has also been decreasing since its peak in 2011. There are concerns that if aging apartment complexes in regional areas are not refurbished while demand still exists, the number of vacant homes and the collapse of management will accelerate much faster than in the capital region. A resident of one such aging complex in a regional city expressed concern: "If things continue like this for another 10 or 20 years, the city will inevitably become a slum."

While many aging regional complexes have come to a standstill due to various obstacles, some are seeking their own solutions. The Haeundae Sangnok Apartment complex in Jwa-dong, Haeundae District, Busan, which established the first remodeling union in the city (completed in 1998), is a notable example. The construction is being handled by POSCO E&C.

At the end of last year, the union decided at its general meeting to reduce the allocated area for union members from the original 30 pyeong to 29 pyeong after remodeling. By slightly reducing the union members' share, the space secured allowed the number of general-sale units to increase from 104 to 144, thereby boosting sales revenue and reducing the financial burden on union members. As a result, the contribution fee per household was lowered by about 40 million won compared to before. The fact that this apartment complex was able to make such a swift decision, unlike others, is largely due to the condition that all 1,000 units are of a single 59㎡ exclusive size.

Inside the 'Haeundae Sangrok' apartment complex in Jwadong, Haeundae-gu, Busan, on the 11th. This complex is the first remodeling project in Busan, aiming to reduce the area allocated to union members and increase the number of units for general sale to lower the contribution burden. Photo by Seo Yoon Choi

The recent easing of floor area ratio restrictions through special legislation has highlighted just how urgent the need is to improve the living environments of aging high-density complexes in regional areas. In line with the Special Act on Maintenance and Support of Aging Planned Cities, when Busan announced a call for applications for reconstruction pilot districts targeting about 50,000 households in Haeundae and Hwamyeong new towns, both of which are around 30 years old, the market responded enthusiastically. As a result, a total of 32,000 households—5.7 times the number of available spots—applied from the two new towns: over 18,000 households in Haeundae and over 14,000 in Hwamyeong and Geumgok.

After intense competition, a total of 7,318 households were ultimately selected as pilot districts in December of last year. This marked the first time that large-scale reconstruction of aging regional new towns has properly begun. With the application of this law, the maximum allowable floor area ratio for these two new towns will be increased from the existing 235–250% to as high as 360%. The additional floor area ratio secured more general-sale inventory, breathing new life into previously unviable projects.

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