BunDang New Town panorama. /Courtesy of Seongnam City

Plans for the relocation support housing for the first phase new towns' Bundang reconstruction leading district are expected to take shape as early as next month. In order to prevent side effects such as a sharp rise in rental prices when the demand for relocation due to reconstruction floods the market simultaneously, it is likely that the speed of reconstruction will be adjusted by complex to regulate the relocation demand.

According to the Ministry of Land, Infrastructure and Transport and Seongnam City on the 27th, the Ministry plans to announce relocation measures for the leading district after conducting a survey of local residents regarding the selection method for the 2nd leading district in Seongnam.

A representative of the Ministry stated, "Once the survey regarding the selection method for the 2nd leading district conducted by Seongnam City is completed, we will organize and announce the relocation plan comprehensively as soon as possible," adding, "The goal is to do it as quickly as next month. "

The designated quantity for the 1st reconstruction leading district in Bundang is 12,055 dwellings in 4 areas. The project is being promoted with the goal of starting construction in 2027 and the first occupancy in 2030.

However, plans for a large-scale relocation have not yet been established. Through the ‘first-phase new town relocation support measures’ announced last December, the Ministry announced a plan to supply 1,500 units of public housing to be built by the Korea Land & Housing Corporation (LH) on a vacant site between the Seongnam Art Center and the Central Library by 2029. However, facing strong opposition from residents of the designated site in Yatap-dong, Seongnam City requested the Ministry for a review. As an alternative, Seongnam City prepared relocation measures including 5 alternative sites for relocation housing, but the Ministry judged it impossible to occupy by 2029, leading to the cancellation of this plan as well. Subsequently, Seongnam City revised the relocation measures within the basic plan for aging urban regeneration to state, 'we will continue to consider the allowable renovation quantity.'

The afternoon of November 27th last year shows the WOOSUNG/HYUNDAI apartments in the BunDang-gu district of Seongnam City, Gyeonggi Province. /Courtesy of Yonhap News

As the plan for building housing for the relocation complex has fallen through, measures will be prepared to absorb the relocation demand naturally from the housing market inside and outside the living area. To this end, the Ministry is actively looking into the option of distributing relocation demand so that it does not occur simultaneously through the ‘allowable renovation quantity system.’ They are considering advancing or postponing the timing of management disposition approval, which is the stage just before the start of reconstruction, to adjust the construction quantity.

They are also reviewing a plan to manage relocation demand using the Korea Housing & Urban Guarantee Corporation (HUG)’s maintenance project loan guarantee system. This system guarantees the financing for maintenance project associations with low credit ratings when they seek funding from financial institutions. By utilizing this system, it is possible to adjust the speed of reconstruction and thus disperse the relocation demand.

A representative of the Ministry noted, "We are preparing to adjust the quantity through management disposition approval or manage HUG's guarantee," and added, "We will conduct a comprehensive review of these two options along with other alternatives before the final announcement."

The direction of response to relocation demand will be determined through the housing supply and demand consultative body held every six months. A representative of Seongnam City stated, "The Ministry has decided to hold the housing supply and demand consultative body regularly in June and December," and added, "The selected complexes may all receive management disposition approval within two years, but there is also the possibility that this may not happen, so the response option will be likely adjusted according to the pace of projects in the complexes."

The Ministry plans to announce the final relocation measures considering the maintenance quantity of the 2nd leading district. Bundang plans to designate 12,000 dwellings for the 2nd leading district this year. To prepare for a surge in relocation demand, Seongnam City reviewed the option of adjusting the quantity for the 2nd leading district, but after discussions with the Ministry, it was decided to select the planned quantity while adjusting the pace of the project based on supply and demand conditions. A representative of the Ministry stated, "The issue at hand is the relocation quantity for 2029, which will be the quantity selected this year," adding, "This aspect will also be taken into account."