Seoul Mayor proposes plan to add 87,000 housing units by 2031 via redevelopment

Seoul Mayor Oh Se-hoon unveiled a plan to increase the city's housing stock by 87,000 units by 2031, excluding units lost to demolition, through urban redevelopment projects. This proposal highlights a divergence from the central government's approach to housing supply, with Seoul emphasizing the critical role of redevelopment.

During an inspection of redevelopment sites in Seo-gye and Cheongpa-dong, Mayor Oh stated that these areas exemplify the supply effects of redevelopment, projecting a net increase of 1,695 units. Across Seoul, the city estimates that commencing 253 redevelopment projects by 2031 could yield 310,000 units, with 87,000 (39.2%) being a net increase after accounting for demolitions. The plan includes securing 48,000 rental units.

Seoul's focus on net unit increases from redevelopment aims to underscore its importance ahead of the central government's upcoming housing supply announcement. A recent report submitted to the government highlighted that 59 completed redevelopment projects over the past three years resulted in a net increase of approximately 20,000 housing units.

However, the city's projection of 87,000 net new units relies on all 253 projects commencing by 2031. Redevelopment processes are prone to delays at various stages, including 조합 설립 (union establishment), permits, relocation, and financing. Overlapping relocation schedules could also destabilize the rental market, posing a challenge for the government. Seoul is advocating for adjustments to regulations, including modifying the mandatory ratio of rental housing in redevelopment, increasing developer-led redevelopment plot ratios up to 1.2 times the legal limit, a temporary three-year suspension of restrictions on transferring union membership, and applying a loan-to-value ratio of 70% for relocation funds.

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Seo-gye and Cheongpa-dong are sites that demonstrate the supply effect of redevelopment projects with a net increase of 1,695 units, excluding demolished houses.