"A Single Official Letter Halts a 13 Trillion-Won Redevelopment Project"... What Happened in Gwangmyeong

[Financial News] Redevelopment of aging apartment complexes in the Cheolsan and Haan areas of Gwangmyeong, Gyeonggi Province, is gaining momentum. Haan Jugong has begun selecting construction contractors one after another, while Cheolsan Jugong has also moved ahead with its project after completing the establishment of its redevelopment association.
However, the mood has changed recently after Gwangmyeong City called for public rental housing to be included in redevelopment complexes. Residents are strongly opposed, and a wait-and-see attitude is becoming more pronounced.
According to the redevelopment industry on the 16th, Haan Jugong Complexes 1 through 12 are pursuing redevelopment in eight project districts, excluding Complex 13. The total project value is expected to reach 13 trillion won. Complexes 3 and 4 were the first to select POSCO E&C as their construction contractor. Through redevelopment, they are expected to be transformed into a complex with a total of 4,004 households.
Complex 5 is also proceeding with the contractor selection process. It will be redeveloped into a complex with 2,886 households, with estimated construction costs of around 1 trillion won. Hanwha Corporation E&C Division submitted the only bid three times and was selected as the preferred negotiating party on the 3rd. Complexes 6 and 7 will close contractor bids on the 18th. Construction costs are estimated at 1.1549 trillion won. Three companies—Daewoo Engineering & Construction, IPARK Hyundai Development Company, and Jeil E&C—attended the site briefing. IPARK Hyundai Development Company has demonstrated its commitment to winning the contract by preparing the complex design in partnership with global design firm Gensler.
Redevelopment is also getting underway in Cheolsan-dong. Cheolsan Jugong Complex 13 established its redevelopment association in April and plans to begin the contractor selection process within the year. Cheolsan Jugong Complex 12 also received approval from Gwangmyeong City to establish its association on the 4th. Among the low-rise complexes in Cheolsan Jugong, excluding Complexes 12 and 13, redevelopment has been completed and residents have already moved in.
As redevelopment projects gather pace, public rental housing has emerged as the biggest variable. On the 19th of last month, Gwangmyeong City sent an official letter to redevelopment associations and promotion committees in the Cheolsan and Haan housing development districts, requesting that public rental housing be included when redevelopment plans are established or amended. The request calls for supply plans for public rental housing to be reflected during the process of establishing or changing redevelopment plans.
The associations immediately protested. They argue that if the number of units for general sale decreases because public rental housing is included, association revenues will fall, potentially leading to higher additional contributions from members. There are also concerns that project schedules could be delayed because existing redevelopment plans would have to be amended again.
As the conflict drags on, residents’ opposition is turning into collective action. Truck protests opposing the additional inclusion of public rental housing are taking place around the complexes, including at Cheolsan Bridge Intersection and Haan Intersection. A protest rally was also held in front of Gwangmyeong City Hall.
Changes in sentiment have also been detected in the local real estate market since the public rental housing controversy emerged. An agent at a real estate brokerage in Gwangmyeong said, "There are still plenty of inquiries," but added, "Before the rental housing announcement, we received many inquiries from buyers, but now we are also getting many inquiries from sellers."
An official from the redevelopment industry said, "Gwangmyeong redevelopment projects attract strong interest because of their locations and scale, but the key issue ultimately is project feasibility." The official added, "The longer the uncertainty continues without the scale and implementation method of the public rental housing being finalized, the greater the burden will be—not only on members’ additional contributions but also on construction companies’ decisions about whether to bid."
[email protected] Choi A-young Reporter