Pay a Fine and Separate Rental Housing? Gangnam Reconstruction Associations 'Stir'

[Financial News] As an apartment in Seoul that separated rental housing and general sales was concluded by paying 2 billion won to the Seoul city, other reconstruction complexes are stirring. Considering future apartment price increases, the reaction is "We will also pay the fine rather than mix with rental housing."
According to the industry on the 28th, the Seoul city recently decided on a donation of 2 billion won to the reconstruction complex 'The H Edelweiss' in Daechi-gu Village 3 District, Gangnam-gu, which violated the social mix policy by separating the floors and units of rental housing and general sales during housing floor allocation. The complex prioritized selecting housing for association members, violating regulations.
Social mix is a policy to eliminate discrimination among residents within a complex by evenly mixing rental and sales housing. In the past, rental housing was separated into different buildings, but with the revision of the Urban Maintenance Act, housing floors and units must be publicly drawn simultaneously.
The voice of choosing fines over social mix was prominent among associations pursuing the creation of high-end complexes. A member of a complex promoting large-scale reconstruction along the Han River said, "We are prepared to pay even 10 billion won in fines rather than give up the Han River view to rental housing," adding, "The amount is small if divided among members, but the expected sales profit is much greater."
In fact, the cash donation of 2 billion won is less than the price of a single unit of the national standard size in the nearby 'Daechi Prugio Summit', which started occupancy in 2023 after reconstructing the adjacent Daechi-gu Village 1 District. The exclusive 84㎡ was traded at 3.36 billion won last February.
Also, with 150 members in 'The H Edelweiss', the burden per household is about 13 million won when dividing the donation. As the complex showed a competition rate of 1025 to 1 in the first priority subscription, expecting about 1 billion won in profit compared to last year's surrounding market price, it is expected that future sales profits will exceed the shared cost.
As the controversy continued, Mayor Oh Se-hoon of Seoul instructed on the 27th to "prepare clear guidelines to prevent similar cases from repeating" and announced plans to propose a legal amendment to establish penalties for public drawing violations. However, after the re-designation of the land transaction permission zone, Seoul's housing policy is shaking again, and market trust is low.
An apartment maintenance project official in Gangnam-gu said, "With the policy fluctuating, even if a guide comes out this time, the criteria may change again at the time of our complex's integrated review," adding, "I'm worried the project will only get more complicated." Concerns about rental housing residents also emerged. An industry official said, "The view of just paying the fine could result in making it more difficult for rental housing residents to live mixed with general households in the future." going@fnnews.com Choi Ga-young Reporter