[Seoul, Now] Moa Town's KRW 76 Trillion Market: Joint Implementer System Needs Careful Scrutiny

What gets overlooked when focusing only on housing supply figures

Lax requirements must be tightened for the policy to succeed

When discussing Moa Town, we usually ask, "How many households will it provide?" But while this is a housing supply policy, it is also a massive market for construction companies.

I ran the numbers myself. According to materials released by the Seoul Metropolitan Government on August 23 and October 12, there are 137 Moa Town projects underway since 2022, covering approximately 130,000 households. That works out to an average of 950 households per site. The city says it will add another 100 sites, covering 80,000 households, by 2030. That brings the total to 210,000 households.

Based on recent construction contracts awarded to companies in northern Seoul, if we estimate construction costs at about KRW 365 million per household, total construction costs come to KRW 76.734 trillion. If construction costs account for 40% of total sales revenue, the overall sales revenue would reach KRW 192 trillion.

Let's also consider the joint implementers' share. At one Moa Town site in Jungnang-gu, a contract with the joint implementer set its fee at 2.1% of sales revenue. Applying that rate, a joint implementer would receive KRW 17 billion in service fees for each Moa Town site. The total market is worth more than KRW 4 trillion. Given that many projects are said to choose the joint implementation model, this is not an unreasonable estimate.

Moa Town itself has many advantages. The first Moa Housing (small-block housing renewal) project, Hanyang Yeonrip in Gwangjin-gu, began construction just eight months after receiving integrated review and was completed in August this year. The number of households increased from 99 to 215. The Seoul Metropolitan Government says it aims to shorten the time from candidate-site selection to construction from six years to 4.5 years. It is a solution suited to aging, low-rise residential areas in northern Seoul, where redevelopment is difficult because multi-unit housing is mixed with old detached and multi-family homes. The process is also faster because it skips the steps of designating a renewal zone and forming a promotion committee, moving directly to integrated review.

The problem is that the barriers to entering a project where financial interests are at stake are too low, and the system is inadequate. The Act on Special Cases Concerning Vacant Houses and Small-Scale Housing Improvement allows housing associations to jointly implement projects with construction companies and others. The aim is to help associations that lack expertise and funding. But the requirements are so lax that companies brought in at the consent-collection stage can end up influencing the selection of the construction company. Critics say some collect substantial service fees by acting as renewal contractors without properly fulfilling the role of project implementers. Faced with joint implementers who control the practical work of securing permits, associations made up of residents with no experience in renewal projects can easily become empty shells.

The situation on the ground is already sending warning signals. In April, the Seoul Northern District Court ruled that a joint implementation contract signed at a project site in Jungnang-gu without written consent from the association members was invalid. It also ordered the joint implementer to return more than KRW 730 million. The service fees had been paid in a lump sum before the project implementation plan was even approved.

The Seoul Metropolitan Government also called for improvements by the joint implementer following an audit. Yet, while the appeal is now underway, the association that won at trial has decided to hold a dissolution meeting on the morning of October 24 and put forward an agenda item to "reapprove and ratify the selection of the joint implementer and its contract." That same afternoon, a regular meeting of an association next to the site slated for integration will also consider ratifying its joint implementer contract. How many association members truly understand what this means?

If conditions on the ground do not change despite the court ruling and the audit, it means that a market covering 210,000 households cannot be managed through Seoul Metropolitan Government guidelines and audits alone. The Ministry of Land, Infrastructure and Transport must also move quickly to amend the law. It must establish measures to accurately assess and verify the actual state of joint implementers, who wield decisive influence over projects. It is no exaggeration to say that the success or failure of the Moa Town policy depends on this.

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