South Korea’s capital city will shorten its approval procedures for real estate reconstruction projects and ease regulatory limits in line with the new mayor’s plan to supply 240,000 new housing units by 2025.

Mayor Oh Se-hoon said in a press briefing Wednesday that his office had prepared six deregulatory measures to combat rising home prices, expedite reconstruction projects and allow new apartment complexes to be built.

“Measures centered on limiting supplies over the past 10 years prevented reconstruction and redevelopment projects from starting on time and destroyed the balance of supply and demand of homes, eventually leading to today’s crisis of surging real estate prices,” Oh said.

“We are choosing to pursue regulatory relief on redevelopment projects, which are comparatively less sensitive for housing prices and effective in improving the living environment.”

In line with his goal, the Seoul Metropolitan Government said it would abolish a points-based approval system for redevelopment projects, instead requiring only basic legal steps.

At the moment only 14 percent of old low-rise residential buildings would meet the requirements for redevelopment, but under the new measures the city believes this would rise to almost 50 percent.

Oh also said the city would shorten its preliminary review process for potential redevelopment projects from the current five years to two years, which he said would expedite the application process for areas in need of redevelopment and allow the construction of higher-quality apartment complexes.

The points-based approval system will be replaced with a stronger consensus requirement for residents, Oh said, to ensure a democratic process before any project starts.

To minimize conflict among residents the preliminary consensus requirement will increase from the current 10 percent to 30 percent of all residents, and the final requirement will be kept the same at two-thirds.

Seoul City also added that it would accept and review applications for additional redevelopment projects. Oh said the move would allow up to 170 more redevelopment projects, mainly in northeastern and southwestern Seoul.

The city will also begin accepting applications for new redevelopment projects, with a vow to identify at least 25 new redevelopment areas each year.

To improve the quality of the new housing, Oh said his office would lift the seven-floor limit for areas subject to the regulation, which was meant to deter excessive real estate projects. The move will raise the market value of the new apartment complexes and ensure that more housing units can be supplied to those in need.

“Based on these new measures, Seoul plans to officially revise and launch the new real estate plan by October,” Oh added.

“This measure was prepared on the social consensus that a supply of quality housing units is needed to respond to a surge in housing prices. I ask for cooperation from the Seoul Metropolitan Council to make effective regulatory fixes.”

The Seoul city government predicts that the initiatives announced Wednesday will help the city supply a total of 130,000 housing units by 2025. The city will later announce measures targeting reconstruction projects, saying these will ensure that 110,000 additional housing units are built.

By Ko Jun-tae (ko.juntae@heraldcorp.com)