"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

Seoul faces challenges, but the situation is even worse for high-density apartments in regional cities. This is because construction costs for apartments are similar in both the capital region and the provinces, while housing prices differ dramatically. Even if old complexes are demolished and new apartments are built on sites with floor area ratios already approaching 300%, the number of units available for general sale remains insufficient. The basic redevelopment formula—covering high construction costs with sales revenue—simply does not work in these areas. In addition, the calculation for redevelopment and remodeling is even more difficult due to the presence of elderly owners who do not want changes in their living environment and the looming crisis of population decline.

On June 11, I visited an apartment complex (referred to as Apartment A) in a major regional city. This complex, which was completed more than 20 years ago, has seen daily inconveniences become the norm due to aging infrastructure. The apartment management office director explained, "The roots of landscaping trees inside the complex have dug deep into the ground and damaged old pipes, resulting in over 130 cases of pipe bursts or leaks every year. We repair them each time." While a complete overhaul of the infrastructure is urgently needed, residents are left helpless, unable to take action. This is because the option of a maintenance project to improve the living environment is caught up in multiple layers of regulations and cost issues.

Redevelopment, which might seem like the first solution, was quickly dismissed as an option. Since the floor area ratio has already been pushed to its legal limits, the project is simply not viable under current laws. Even remodeling, which would preserve only the building's frame, is hindered by prohibitively high cost-sharing bills. A member of the Apartment A remodeling committee remarked, "If residents in a neighborhood where home prices are just over 10 million won per 3.3㎡ are told to pay the same 10 million won per 3.3㎡ for renovations, who would willingly agree and sign off?"

Unlike redevelopment, where regulations have been eased, remodeling projects still require the same consent rates as before, making it difficult to even get started. For redevelopment, the threshold for establishing a union has been lowered from the previous 75% consent rate to 70%, but for remodeling, 66.7% of residents must agree to form a union, and 75% must approve at the permit stage for actual construction. Even if residents try to consider essential repairs without relocating, they encounter complicated administrative procedures such as obtaining a work permit and updating the property registry.

Regional maintenance projects are also directly linked to demographic issues. Major regional metropolitan cities like Busan, Daegu, Gwangju, and Ulsan have already passed their population peaks and are now in decline. In Busan, the population dropped from about 3.89 million in 1995 to about 3.26 million in 2024—a decrease of over 600,000 in 30 years. Daegu's population has also been shrinking since its peak in 2011. If aging apartment complexes in regional areas are not renovated while demand still exists, vacant homes will increase and the pace of deterioration will be much faster than in the capital region. This is why there are growing concerns. As one resident of an old complex in a regional city said, "If we spend the next 10 or 20 years like this, it will eventually turn into urban slums."

While many old apartment complexes in regional cities have come to a standstill due to various obstacles, some are seeking their own solutions. One example is the 'Haeundae Sangrok Apartment' in Jwadong, Haeundae District, Busan (completed in 1998), which was the first in Busan to establish a remodeling union. POSCO E&C is in charge of construction.

At the end of last year, the union decided at a general meeting to reduce the area allocated to each union member after remodeling from the original 99㎡ to 95.7㎡ (a reduction of 3.3㎡ per unit). By slightly reducing the members' allocation, they increased the number of units for general sale from 104 to 144, aiming to boost sales revenue and lower the cost burden for members. Through this, the expected cost-sharing amount was adjusted to around 300 million won. The key factor that enabled this prompt decision, unlike other complexes, was that all 1,000 units in the complex are of a single exclusive size of 59㎡.

Inside the 'Haeundae Sangnok' apartment complex in Jwadong, Haeundae District, Busan, on the 11th. This complex is Busan's first remodeling project, and it is pursuing a plan to reduce the allocation area for union members and increase the quantity of general sales units to lower the burden of contribution fees. Photo by Seo-yoon Choi

The recent easing of floor area ratio regulations through a special law has highlighted just how desperate aging high-density complexes in regional cities are to improve their living environment. In line with the Special Act on the Maintenance and Support of Old Planned Cities, the City of Busan held a competition for redevelopment leading districts targeting around 50,000 households in Haeundae and Hwamyeong new towns, both nearing 30 years since completion, and the market responded enthusiastically. As a result, a total of about 32,000 households—5.7 times the available selection quota—applied from the two new towns: over 18,000 from Haeundae and over 14,000 from Hwamyeong and Geumgok.

After fierce competition, a total of 7,318 households were finally designated as leading districts in December last year. This marked the first full-scale case of redevelopment in aging new towns in regional cities. Under the special law, the allowable floor area ratio in these two new town areas will be increased from the existing 235-250% to up to 360%. As the increased floor area ratio allows for more units for general sale, the previously blocked business feasibility of these projects has finally opened up.

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