Ruling and opposition parties both call for faster redevelopment projects... ruling party seeks structural changes, opposition moves to ease property-rights restrictions

[Financial News] As housing supply policies draw attention amid a sharp rise in home prices in the Capital Metropolitan Area, the ruling and opposition parties are introducing a series of bills to speed up redevelopment projects. The ruling Democratic Party of Korea (DPK) is focused on changing how projects are structured, while the People Power Party is emphasizing easing restrictions on property owners’ transactions.
An analysis by this paper on the 11th of six proposed amendments to the Act on Urban and Residential Environment Improvement introduced in the National Assembly found that both ruling and opposition parties cited delays in redevelopment projects as a primary reason for their bills. They also agreed that association chairs’ expertise should be strengthened.
The DPK focused on changing the structure for advancing projects. Bills proposed by lawmakers Cheon Jun-ho and Kim Nam-geun would lower the required consent rate among landowners and other rights holders to establish a redevelopment association from 75% to 70%.
According to a review report by the National Assembly’s Land, Infrastructure and Transport Committee, the consent rate in Siheung 1 District in Geumcheon-gu, Seoul, stood at 69.84% as of December 30 last year. If the amendment passes, an association could be established with only a modest amount of additional consent.
The bills also expand the public sector’s role. Kim Nam-geun’s bill would lower the required consent rate among landowners and other rights holders for public entities such as the Korea Land and Housing Corporation (LH) to be designated as project implementers, from two-thirds to 60%.
Ahn Tae-jun’s bill would allow the Minister of Land, Infrastructure and Transport to designate a redevelopment zone directly if delays in its designation threaten to seriously disrupt a project. The proposal reflects the view that bottlenecks arise because designation authority is concentrated in the heads of metropolitan and provincial governments.
The bills also tighten penalties. Kim Nam-geun’s bill would introduce criminal penalties for failing to submit a construction cost breakdown.
This would make imprisonment possible, rather than an administrative fine, for violating the document-submission requirement. The aim is to prevent disputes over construction cost increases before they arise, but contractors would face a heavier burden from having to finalize the breakdown within 90 days of being selected, and opposition from the construction industry is expected.
The People Power Party, by contrast, focused on property owners’ ability to sell and on property rights. Under current law, in areas designated as overheated speculative zones, people who buy homes after approval to establish a reconstruction association or after approval of a redevelopment management and disposition plan generally cannot become association members.
Kim Jae-seop’s bill would delay the restriction point for reconstruction until after approval of the management and disposition plan, as in redevelopment, and would exempt buyers who have been without a home for at least five years. The reasoning is that listings meeting the exemption criteria alone become scarce, driving up prices and dampening transactions.
Cho Eun-hee’s bill would move up the starting point of the three-year resale restriction on one home with an exclusive area of 60 square meters or less, when a person receives two homes through a redevelopment project, from the date the transfer notice is issued to the date completion is approved. It reflects concerns that property rights could be infringed if several years pass between completion and the issuance of the transfer notice.
The parties also proposed different solutions for managing associations. Under People Power Party lawmaker Kim Jong-yang’s bill, if an association requests it, a local government would recommend multiple candidates for association chair from among members with relevant expertise. DPK lawmaker Kim Nam-geun’s bill would allow outside experts, including lawyers and certified public accountants, to be appointed as association chairs in redevelopment projects only.
There are also calls for caution. A review report by the Land, Infrastructure and Transport Committee pointed out that redevelopment, unlike reconstruction, involves land expropriation, and that the greater degree of property-rights restrictions must be taken into account. The Ministry of Land, Infrastructure and Transport also said that opportunities to reflect the views of residents opposed to a project could be reduced, and that the views of stakeholders need to be gathered. 
[email protected] Jeong Gyeong-su Reporter