South Korea's rival parties agree on easing floor area ratio rules for private redevelopment projects but remain locked in a standoff over the details. The Democratic Party wants to raise the ceiling only for sites outside subway station areas, while the People Power Party wants the easing extended to station-area projects as well. The two also differ on the size of homes to be built with the added density — small units under the Democratic Party's plan, and mid-sized units of about 84 square meters under the People Power Party's.
Interviews and reporting by The Seoul Economic Daily on the 6th showed the parties disagree over the revised text of amendments to the Act on the Improvement of Urban Areas and Residential Environments, which centers on easing density limits for private redevelopment. Two issues dominate: whether to extend the benefit to projects near subway stations, and how to set the size of homes built with the additional density.
In its own revision, the Democratic Party specified that the incentive would apply only to private redevelopment and rebuilding sites outside station areas. Under current law, private redevelopment sites within 500 meters of a subway platform boundary are already allowed up to 1.2 times the legal maximum floor area ratio, and the party judged that further easing could invite haphazard development.
The People Power Party, by contrast, argues that additional incentives should also go to station-area sites. Its version includes a provision raising the legal ceiling for station areas to 1.3 times, from the current 1.2 times. The aim is to improve project viability for developers and expand housing supply through broader deregulation, including in station areas.
On unit size, the Democratic Party wants all of the additional volume gained from the easing to be built as small units of 60 square meters or less in exclusive floor area, maximizing the number of homes supplied. "Even on the same site you can supply more units, and presale prices are relatively lower, which can ease the housing burden for young people and low- and middle-income households who do not own a home and are buying to live in," a Democratic Party official said.
The People Power Party wants up to half of the added density to be used for mid-sized units of 84 square meters in exclusive floor area, rather than small units. The idea is to require that a certain share of the homes be of a type the market prefers. Behind it is also the view that developers in private redevelopment projects should be able to set unit sizes according to demand in each area.
The two parties agree that speculation-overheated zones should be excluded from the density easing to prevent the market from overheating. Another point of common ground is a plan not to impose additional land-contribution requirements in return for the eased density.
The confirmation of Hong Ji-sun, the nominee for land minister, is a variable in the negotiations. "The plan to raise the floor area ratio in non-station areas from 100% to 120% is also on hold for now," a ruling party official said. "Discussions are expected to proceed after the new minister reviews and decides."
