Seoul to Expand Supply by Easing Redevelopment Floor-Area Ratio, Not Yongsan Park

Kim Hak-ju, head of the Urban Development Research Institute, quoted the mayor and stressed that the main Yongsan site must be kept absolutely intact.

However, he signaled willingness to review the Ministry of Land's other proposals as flexibly as possible, as long as they do not involve Yongsan Park. This shows Seoul's readiness to cooperate with the central government to expand housing supply.

Kim Hak-ju said the ministry has confirmed it is reviewing Seoul's request favorably.

This suggests the central government and Seoul are moving toward agreement on easing redevelopment regulations to expand housing supply. Easing the floor-area ratio is a measure that can improve the profitability of redevelopment and encourage more housing supply.

The government has officially denied reports of a Yongsan Park development push. Kim Hak-ju said the Minister of Land never emphasized developing Yongsan Park itself, and that the premise that it had to be Yongsan Park was never there to begin with.

It has also been confirmed that the Yongsan Park site was not included in the government's housing-supply package announced on August 13. This shows the government had no active intention to develop Yongsan Park.

The government appears to be withdrawing its claim about developing Yongsan Park and exploring changes in how housing is supplied.

He noted the minister never said he would develop Yongsan, only that he had considered and reviewed it, and appeared to step back.

These remarks suggest that the mention of Yongsan Park development was used as a bargaining chip for political proposals rather than for the actual purpose of supplying housing.

Some have pointed out that housing supply within Yongsan Park would be of limited effectiveness. The argument is that the fundamental problem is not a shortage of rental housing but a shortage of quality apartments.

Yet the government's housing solutions still rely on rental housing supply, and it faces criticism for lacking the ability to solve the problem. Kim Hak-ju pointed out that the government still has not solved the rental housing problem.

It has also been suggested that the government may have used this as bait for negotiations with Seoul.

However, as public opinion on the Yongsan Park development worsened, related figures began to step back.

The president had previously made clear that greenbelt development would not be pursued. However, the Minister of Land has taken an active stance on greenbelt development, which differs from the president's earlier position.

Kim Hak-ju noted that the president's view had only recently changed, and predicted that greenbelt development in Gangnam could become a reality in the future as the ministry persuades the president.

This suggests that the possibility of greenbelt development is resurfacing in the government's housing-supply policy.

The Gangnam real estate market is currently going through a temporary adjustment due to loan regulations and tax investigations. However, preference for the 'one solid home' remains firm, and despite the downturn, demand for apartments in core areas has held up.

Kim Hak-ju stressed that now is a good time to invest for those who are capable or have no tax concerns. He advised that the current adjusted prices are a gift-like opportunity from the government and could bring large gains when the property market recovers.

Real estate market experts recommended that investors watch government policy changes and market conditions and consider investing with a long-term perspective.

It was argued that there is a need to clearly distinguish apartments from non-apartment housing, and that non-apartment housing has never led the rise in apartment prices. Kwon Ki-heon, director of the Urban Development Research Institute, stressed that regulations on non-apartment housing should be eased and that even more incentives should be provided.

The need to ease regulations on rental housing business operators and restore tax benefits such as capital gains tax and holding tax was also mentioned. This was presented as a way to activate non-apartment supply and stabilize the jeonse and monthly-rent market.

Demand for redevelopment projects is expected to rise in earnest about two years from now. However, concern was raised that there will be a shortage of villa (non-apartment) supply to meet this demand.

Director Kwon stressed the importance of rental housing business operators in securing non-apartment supply and argued that easing regulations should encourage their participation in the market.

It can be interpreted as an attempt to weaken the authority of the Seoul mayor and expand the discretion of district heads.

Since most Seoul district heads belong to the Democratic Party, political interpretations are also emerging. The bill is justified as a way to speed up housing supply, but some are concerned about side effects such as corruption and haphazard development.

Redevelopment projects proceed amid complex interests among three main parties: resident associations, redevelopment contractors, and district offices. Director Kwon predicted that if redevelopment authority is transferred to district heads, civil complaints and favor-seeking aimed at district council members and officials would be enormous.

This raises concern that district council members, who find it hard to ignore residents' complaints, are likely to foster collusion among stakeholders and abuse of complaints. There is also a warning that the transparent review system at the Seoul level could collapse.

Transferring authority to local governments carries two sides: faster development, but also reduced transparency and the possibility of corruption.

An analysis has concluded that candidate sites for redevelopment in Seoul have already reached saturation. Director Kwon warned that if district heads take the lead, the shortage of land for non-apartment supply could deepen.

There is also concern that if authority is granted to district heads, indiscriminate designation of 'Mo-a Towns' (small-scale housing redevelopment zones) could proliferate and cause confusion in urban development.

Some argue that quickly advancing small-scale Mo-a Town projects is effective for solving the housing problem. However, concern was raised that if this authority were fully transferred to district heads, Seoul's overall development coordination function could weaken.

Kim Hak-ju said that if district heads gain the authority, half of Mayor Oh's housing policy could effectively be erased. He also warned of the risk that favor-seeking and the Chinese-style 'guanxi' culture could spread in development sites.

Transferring small-scale housing redevelopment authority to district heads could speed up development, but it could also cause side effects of haphazard development and corruption.

Kim Hak-ju stressed that this would be the cleanest way to solve the housing problem.

An analysis was also mentioned that using the National Assembly site could allow rental housing supply as early as the first half of next year. This was presented as a bold alternative for easing the housing shortage.

Because the National Assembly building site is located in a core area of Seoul, development there is expected to bring a considerable housing-supply effect.

As a real estate investment strategy, it was emphasized that finding a 'pearl buried in mud' is important. Kim Hak-ju explained that even neighborhoods others consider unattractive can hide valuable investment opportunities when examined closely.

In particular, he forecast that the period through next year is the right time to invest in undesignated development areas, and that such opportunities will shrink afterward. There was also a prediction that the market will be reorganized around premium properties in areas already designated for redevelopment.

Experts therefore recommended securing future value early through careful analysis and proactive investment in undesignated areas.