Reducing 'land-locking' and speeding up projects: Land acquisition for regional housing lowered to 80%

In a significant move to invigorate the regional housing sector, South Korea's Ministry of Land, Infrastructure, and Transport has announced a relaxation of land acquisition requirements for regional housing projects. As reported by Dong-A Ilbo, the mandatory land 확보 percentage needed to approve a project's plan will be lowered from 95% to 80%. This adjustment is a direct response to the persistent issue of 'albakgi,' or 'land-locking,' where a few landowners exploit their position to demand exorbitant prices, thereby stalling crucial development projects. By lowering the threshold, the government aims to expedite the construction of much-needed housing and reduce project timelines, potentially by up to a year.

This policy shift is part of a broader strategy to normalize regional housing association projects, which have often been plagued by delays and difficulties in land acquisition. The new measures will also introduce a 'compulsory purchase' right for land owned by special relations after project approval, ensuring that holdouts cannot indefinitely block progress. Furthermore, the criteria for multi-home owners to become 조합 members will be eased, provided they have owned and resided in a property within the project area for a specified period. This aims to broaden the base of eligible participants and facilitate project initiation.

From a South Korean perspective, this policy is a pragmatic attempt to balance the rights of individual landowners with the pressing need for urban development and housing supply. While Western media might focus on the potential for increased developer power or the complexities of property rights, the local narrative emphasizes the practical benefits for aspiring homeowners and the overall economic stimulus. Dong-A Ilbo highlights that this reform is designed to make the 'apartment group purchase' model more accessible and efficient. The government is also introducing measures like mandatory competitive bidding for project managers and construction companies, and a registration system for project management companies, to enhance transparency and prevent collusion, addressing long-standing concerns about the sector's integrity.

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We believe this does not increase the infringement of property rights compared to redevelopment projects.