Chief of Staff for Policy Kim Yong-beom: 'Redevelopment and Reconstruction Not a Short-Term Panacea' – Discussions on Seoul Housing Measures

Presidential Policy Chief Kim Yong-beom has decided to discuss measures to expand housing supply in Seoul, including redevelopment, reconstruction, and the development of semi-industrial zones, through a separate meeting with Seoul Mayor Oh Se-hoon.

However, Chief Kim noted that activating redevelopment and reconstruction is not a panacea for increasing supply in the short term. He pointed out that projects take a minimum of 3 to 5 years to complete, and that housing demolitions and relocations during construction could exacerbate short-term supply shortages. Kim emphasized that careful decisions are necessary, noting that if 30 complexes of 1,000 households undergo redevelopment simultaneously, 30,000 households could be wiped out at once. He also mentioned that incentives, such as increasing floor area ratios, could stimulate speculative demand depending on their design.

The government has proposed short-term supply measures, including the activation of 'purchase leasing,' where the Korea Land and Housing Corporation (LH) purchases and rents out homes built by the private sector, the conversion of officetels and commercial buildings into residential use, and the conversion of commercial land in the 3rd Generation New Towns into residential sites. Chief Kim stated that he would focus on achieving immediate supply effects through non-apartments and conversions.

If these short-term measures are implemented, jeonse (long-term lease) and monthly rent prices in the Seoul metropolitan area could stabilize. In particular, purchased rental homes are expected to be quickly provided to actual demanders, helping to lower housing cost burdens. Conversely, as redevelopment gets into full swing, it could temporarily lead to housing anxiety for existing residents and increased relocation costs, necessitating careful measures from the government.