Apartment Complex Reconstruction Will Be More Strict

Starting next year, city mayors and provincial governors are entitled to decide whether apartment complexes should be reconstructed, on condition that apartment complexes are more than 20 years old.

Against this backdrop, the Seoul city government’s plan to allow rebuilding only for more than 30 year old apartments got a boost, sending another cold wave to the apartment market in Southern Seoul.

But city mayors and provincial governors can have the decision right within 20 percent of the minimum supply rate by apartment size. Therefore, once an apartment complex gets permission for reconstruction, high business benefits are expected.

The Ministry of Construction and Transportation on Thursday announced that it would prepare detailed management plans, such as enforcement ordinance and enforcement regulations, including the above as the law on city and housing environment development was enacted.

The Ministry plans to hold a public hearing on the new law on Dec. 20 at Korea National Housing Corp. and based on the result of the hearing it will prepare the enforcement regulations and then enforce the law starting in late June next year.

According to the management plans, cities with the population of more than 500,000 should have in place a 10-year basic plan on city and housing environment.

Based on the plan, city mayors and provincial governors should prepare a plan on development districts that regulates the building-to-land ratio, the floor area ratio, and the height of the building and allow redevelopment and reconstruction.

The governors can also decide an aging period for permission for rebuilding in an ordinance except that the period should be more than 20 years. However, a house building can be allowed for rebuilding only when the building houses 300 households, or is more than 10,000 m2.

The owner of a commercial building can get an allotment for an apartment only when the gap in price of the commercial building between pre-reconstruction and after-reconstruction exceeds the smallest-size apartment price.

A reconstruction promotion committee can be set up with the agreement of more than half of the residents and authorization of head of city or county or ward government offices. The requirement for rebuilding of a house building would be eased from a full agreement of the residents to agreement of more than four fifth of the residents.

In the case of reconstruction, those who already have their own house can get an allotment for the apartment to be rebuilt, but in speculation-worried areas, the allotment is allowed for those who do not have their own home. Those who are not entitled to allotment can be compensated for their stake in the apartment complex in cash.

Meanwhile, designation of rebuilding areas, safety inspection and establishment of an association for reconstruction already made under the current housing construction promotion law will be acknowledged and the builder who was chosen by agreement of half of the residents before Aug. 9 doesn’t need to be changed.

Jae-Seong Hwang jsonhng@donga.com