"Easing Floor Area Ratio by 1.4 Times Is Excessive Incentive"... Seoul's Urban Public Complex Projects Halted

Five Sites Face Four-Month Delay in Preliminary Coordination

Seoul Raises Fairness Concerns Compared to Private Redevelopment Projects

Ministry of Land: "Floor Area Ratio Is for the City to Decide... Urges Convening of the Committee"

The Ministry of Land, Infrastructure and Transport and the Seoul Metropolitan Government have failed to reach an agreement on easing the floor area ratio by 1.4 times as part of urban public complex development projects, resulting in stagnation at five project sites in the city, including Suyu District 12 in Gangbuk. This impasse stems from Seoul’s reluctance, pointing out that granting excessive incentives exclusively to urban public complex projects is unfair compared to private redevelopment projects. The government views urban public complex initiatives as a key strategy for housing supply, but concerns have been raised that if a suitable compromise is not found, the supply of nearly 10,000 housing units in Seoul could be disrupted.

According to the redevelopment industry on September 15, preliminary planning coordination committees for the five urban public complex sites in Seoul—Suyu District 12 in Gangbuk, Sangbong Terminal in Jungnang, Bulgwang Neighborhood Park in Eunpyeong, Jangwi District 12 in Seongbuk, and the area near Yaksu Station in Jung—have been delayed for four consecutive months.

The preliminary planning coordination committee is a stage that involves the city, the Ministry of Land, Infrastructure and Transport, Korea Land & Housing Corporation (LH), and the respective local districts to discuss specifics such as floor area ratios and building heights after a district is officially designated. Although not legally mandatory, because the approval authority for urban public complex projects lies with local governments, project progress is virtually impossible without prior coordination at this stage.

The Seoul Metropolitan Government had initially planned to convene the committee in May, but as of now, no specific schedule has been set. Consequently, more than a year after district designation, the process of selecting construction firms has not started, leading each project’s residents’ representative council to urge the city to convene the committee.

Do-Hwan Ahn, head of the Bulgwang Neighborhood Park promotion committee, lamented, “The more this project is delayed, the higher LH’s labor and construction costs become due to inflation, which will ultimately increase the costs that residents will have to bear.” He added, “Given the purpose of the project—which is to provide incentives for low-rise residential areas where business feasibility is challenging in order to encourage housing supply—it is essential for the Seoul Metropolitan Government to make a prompt decision.”

The background for the delay lies in differences between the city and the Ministry regarding the standard for easing the floor area ratio. Previously, as part of the September 7 Housing Supply Measures, the government temporarily decided in April to ease the floor area ratio for low-rise residential areas up to a maximum of 1.4 times the legal upper limit for three years. Previously, areas near subway stations were granted semi-residential rezoning and a 1.4 times floor area ratio boost, while low-rise residential areas received only a single step up in zoning or at most a 1.2 times increase. However, to accelerate housing supply, the same relaxation standard was applied across both, aiming to improve business feasibility in low-rise neighborhoods.

As a result, in Category 2 general residential areas, if both rezoning and the 1.4 times floor area ratio relaxation are applied together, the ratio can be raised up to 420%. Previously, even with maximum adjustments, it could only go as high as 300%.

The Seoul government maintains that this level of incentive is excessive from an equity standpoint. For private redevelopment projects, the National Assembly is still negotiating between 1.2 times floor area ratio increases, and thus Seoul contends that awarding greater benefits only to urban public complex projects would be unfair. There is also a prevailing sense within the city that, since this project transitioned from a three-year sunset period to a permanent program, the relaxation of the floor area ratio may need to be applied permanently as well.

A city official stated, “We have to consider overall equity with other projects,” adding, “We need to carefully review whether to allow the full 1.4 times relaxation or settle for a 1.2 times increase considering fairness with private redevelopment projects at the Seoul-level.”

There is also concern from an urban planning perspective. One Seoul official said, “We must consider whether infrastructure can adequately handle this scale of floor area ratio relaxation and what the appropriate population density should be,” emphasizing, “We need to establish clear principles before proceeding.”

The Ministry of Land, Infrastructure and Transport argues that the specific level of floor area ratio for each site should be determined independently by the city within the 1.4 times cap, urging the city to quickly establish its internal standards and convene the coordination committee. A ministry official clarified, “The floor area ratio should be approved by the city after considering infrastructure and other local factors; it is a matter for the city to determine through its own review process,” adding, “It is not because there are differences with the Ministry that the committee is not being held.” The official further stated, “If the city thinks housing supply can be solved through redevelopment, they should accelerate public redevelopment projects.”

However, from the city’s perspective, if the relaxed floor area ratio is set too low, especially when the range for increases has widened, there will inevitably be backlash from residents. For smooth project execution, the initial intent behind the Ministry’s decision to raise the cap to 1.4 times must also be considered. A city official commented, “If the relaxed floor area ratio falls short of the upper limit, residents will protest, making it ultimately a responsibility for the local government to address.” The official added, “We’ll also have to see whether the Ministry of Land, Infrastructure and Transport will agree with the final level decided by the city.”

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