[Edaily Reporter LEE JUNGHYUN ] Although the Seoul Metropolitan Government has emphasized that it has achieved a net increase of 20,000 households over the past three years through urban renewal projects—such as reconstruction (of aging apartment complexes) and redevelopment (of aging residential areas, including low-rise townhouses)—it has been confirmed that the impact of redevelopment on housing supply has been minimal. This is because in nearly half of the areas where old villa neighborhoods were demolished to build new apartment complexes, the number of new homes created was actually fewer than the number of households that were demolished. As the Seoul Metropolitan Government pushes forward with redevelopment promotion projects such as “Moatown,” some observers are pointing out the need for measures—such as an incentive system to raise floor area ratios—to increase housing supply.

According to the “Status of Net Increases in Completed Redevelopment Zones in Seoul Over the Past Three Years (2023–2025),” obtained by Edaily on the 13th, the total net increase across all 36 redevelopment zones completed during that period was 7,006 households. This accounts for approximately 35.2% of the 19,915-unit net increase in housing units from urban renewal projects (redevelopment and reconstruction) claimed by the Seoul Metropolitan Government. However, 17 urban renewal-type redevelopment projects—located in commercial districts and station-area zones where existing housing was not demolished or only a small number of units were demolished—accounted for 6,136 units, or 87% of the net increase.

Most of these projects involved mixed-use developments that met the required floor area ratio. In the case of Hillstate Seun Central Phases 1 and 2, built through the redevelopment of the Seun 3-1, Seun 3-4, and Seun 3-5 districts in Ipjeong-dong, Jung-gu, the 814 units constructed were counted entirely as a net increase because the number of demolished units was “0.” Although high-density mixed-use developments are classified as housing in statistics, they are less preferred than apartments due to a lack of residential infrastructure, such as schools.

In the 19 redevelopment zones where aging multi-family housing units were demolished to make way for apartment complexes, the total net increase in housing units over three years amounted to only 870 households. This means that although new apartments were built on the sites of 23,848 existing housing units, the actual increase in the number of households was limited to just 3.6 percent. The Seoul Metropolitan Government previously claimed that “the net increase in the number of households resulting from redevelopment reached 27.4%” after including mixed-use developments—such as those in commercial areas where almost no housing was demolished.

In 8 out of 19 aging redevelopment zones, the number of households demolished exceeded the number of households built. In the Haengdang 7 District (La Cerbo Purizio Summit), which was completed last year, 1,570 households were demolished and 958 were built, resulting in a net decrease of 612 households. In the Mia 3 District (Bukseoul Zai Polaris), completed in 2024, 1,482 households were demolished, but only 1,045 new units were built, resulting in a net decrease of 437 households.

Why does the number of households decrease when villas are demolished to build apartments?

The reason the number of households decreased despite the construction of high-rise apartment buildings is that the available land area shrank due to the installation of shared facilities such as roads and parks. Another reason is that as areas that were once shantytowns have been transformed into apartment complexes, the per-household floor area has increased to larger sizes, such as 59㎡ and 84㎡ of exclusive use. Unlike aging, densely populated multi-family areas where the building coverage ratio is close to the legal maximum (60%), recent apartment complexes have a building coverage ratio of only in the low 20s, taking into account the distance between buildings and sunlight rights—which is another reason why a net increase in the number of households is difficult.

In the case of Haengdang District 7, which saw a net decrease of over 600 households, although the redevelopment area covered 48,345.3 square meters, parks, roads, and other infrastructure were excluded, reducing the apartment site area to 33,316.2 square meters (68.9%). Furthermore, even though the complex was designed with a building coverage ratio of 21% and a floor area ratio of 250% and built as high as 35 stories above ground, the total floor area amounted to only 121,304 square meters, resulting in a reduction in the total number of households. The developers opted for a “narrow and tall” design (low building coverage ratio, high-rise) to ensure a pleasant living environment—including wide spacing between buildings and landscaping within the complex—while staying within the maximum floor area ratio (250%).

Unlike redevelopment projects, reconstruction projects showed a clear net increase in the number of housing units. The total number of units built in the 23 reconstruction projects completed during this period was 42,107, representing a 44.2% (12,909 units) increase compared to the 29,198 units demolished. This was due to the Olympic Park Foréon (Duncheon Jugong) project in Gangdong-gu, completed in 2024, which built 12,032 households—more than double the number demolished (5,930 households)—resulting in a net increase of 6,102 households. However, two areas—Jayang District 1 in Gwangjin-gu (-473 households) and Lot 136 in Munjeong-dong, Songpa-gu (-127 households)—saw more households demolished than were built.

Experts point out that, in the case of low-rise residential areas, the positive effects of improved living environments resulting from redevelopment projects must also be taken into account. For example, Haengdang District 7 was an overcrowded area where fire trucks could not even enter the alleys, and it lacked residential infrastructure such as neighborhood parks, educational facilities, and convenience amenities; however, these issues were resolved through the redevelopment project. Jeon Young-jin, Head of the Urban Renewal Business Division at Urban Future Comprehensive Technology Corporation, stated, “Even if it doesn’t necessarily result in a net increase in housing supply, we must also consider the benefit of improving the living environment by replacing old homes with new ones.”

Some critics point out that redevelopment projects threaten the living conditions of low-income residents by leading to the large-scale demolition of affordable, small-sized housing units. In the case of Haengdang District 7, 1,570 households lived there before redevelopment, but only 531 were members of the Housing Redevelopment and Improvement Association; the rest did not receive occupancy rights for the new apartments. The recent actual transaction price for an 84.77-square-meter unit in “La Cerbo Purzio Summit,” built through the redevelopment, is 2.7 billion won.

Cho Jung-heun, Chair of the Land and Housing Committee at the Citizens’ Coalition for Economic Justice, pointed out, “Since redevelopment projects could lead to the large-scale loss of low-cost housing for low-income residents, measures to ensure housing stability for these residents must also be put in place.”

Will Relaxing Floor Area Ratios Boost Supply? Infrastructure Must Also Be Considered

Some argue that raising floor area ratios is necessary to dramatically increase the supply of housing through urban renewal projects. Although both the ruling and opposition parties are currently reviewing this issue, there are differences of opinion. The Democratic Party of Korea has proposed raising the FAR for private urban renewal projects—excluding Yongsan-gu and the three Gangnam districts (Gangnam, Seocho, and Songpa)—to 120%, with the relaxed portion required to be used for small housing units with a usable floor area of 60 square meters or less. The People Power Party is countering by proposing to raise the FAR to 130% for all projects, regardless of whether they are private or public.

When applying the proposals from both parties to existing completion data, the results are mixed. If the FAR were uniformly raised to 130%, seven out of the ten redevelopment zones that previously experienced a net loss of housing units would see a net increase, making it possible to secure a large-scale additional supply of 22,380 households compared to the existing supply. Conversely, if the ruling party’s proposal were implemented, the additional supply would amount to 9,899 units, and the number of zones shifting to a net increase would shrink to just five.

Kim In-man, director of the Kim In-man Real Estate Research Institute, stated, “While Seoul faces the very specific situation of a housing shortage, we must also consider side effects such as overcrowding and infrastructure shortages resulting from increased floor area ratios.” He added, “A sophisticated design of floor area ratio incentives is necessary to increase the supply of housing in areas desired by actual buyers.”