Housing remodeling projects for apartments in the Seoul metropolitan area are increasingly running aground, as rising construction costs prompt a growing number of developments to switch to full reconstruction instead.
Construction costs for remodeling have surged to levels comparable to reconstruction, increasing the financial burden on residents. Meanwhile, regulatory relief bills introduced in the National Assembly have made little progress, further dampening market sentiment.
Industry experts argue that remodeling offers advantages such as improving urban residential environments and enabling original residents to remain in their homes, making regulatory easing essential.
According to the redevelopment industry on January 21, Hansol Village Complex 5 in Bundang-gu, Seongnam, Gyeonggi Province, has finally concluded legal disputes over its remodeling project. The complex became the first among first-generation new town apartments to receive business plan approval for remodeling in 2021, but opponents filed lawsuits that caused significant delays.
The legal battle among unit owners stemmed largely from concerns over the proposed duplex structure for 58-square-meter units. "When residents saw the design—living room, kitchen, and master bedroom on the first floor with two rooms on the second floor—many found a duplex layout for a 25-pyeong unit difficult to accept," one owner said. "This duplex structure results from regulations prohibiting the removal of load-bearing walls between units, making it unavoidable in remodeling projects."
Load-bearing walls support a building's structural weight. Current regulations permit removing load-bearing walls within individual units but prohibit demolition of those between units.
The perception that post-completion benefits do not justify the massive construction costs is also hindering remodeling efforts. The Ichon Wooseong Apartment Remodeling Association in Dongbu Ichon-dong, Yongsan-gu, Seoul, held a general meeting on December 15 and voted to dissolve the association. Of 107 members present, 60 voted against continuing the project, eliminating the rationale for the association's existence. The association will be dissolved just three years after its establishment.
The complex had pursued remodeling because its floor area ratio exceeds 320 percent, making reconstruction economically unviable. However, soaring construction costs eroded remodeling's advantages, ultimately sinking the project.
Similar situations are unfolding at Hangang Daewoo Apartment, Eungbong Daelim 1st Apartment in Seongdong-gu, and Geukdong Apartment in Oksu-dong, Seongdong-gu. Geukdong Apartment passed the remodeling architectural committee review in February this year, but a reconstruction promotion committee has recently been formed, signaling a shift toward reconstruction.
"Many complexes are weighing reconstruction against remodeling, and the balance is increasingly tipping toward reconstruction," an industry official said.
The redevelopment industry is calling for urgent regulatory relief, including allowing vertical extensions and load-bearing wall removal. In the decade since the 2014 Housing Act revision permitted vertical extensions, Jamsil The Sharp Ruben in Songpa-gu, Seoul, remains the only completed example.
The inability to add vertical extensions means remodeling construction costs often match or exceed those of reconstruction. According to the Residential Environment Research Institute, remodeling construction costs averaged 8.9 million won per 3.3 square meters last year, up 1.11 million won from the previous year. This compares unfavorably to reconstruction costs of 8.207 million won per pyeong last year.
Experts also point to the need for allowing load-bearing wall removal and improving the secondary safety review system. Housing Act amendments introduced by lawmakers including Moon Jin-seok of the Democratic Party of Korea and Kang Dae-sik and Kwon Young-jin of the People Power Party include provisions for allowing household division within 5 percent of existing units, establishing remodeling support centers, and streamlining safety review procedures for vertical extension remodeling.
Separately, Democratic Party lawmaker Park Sung-joon has introduced a Housing Act amendment that would allow remodeling association formation without consent from rental unit owners. This addresses delays in complexes with mixed ownership and rental units, where entities like the Seoul Metropolitan Government, which owns rental units, have been passive about remodeling projects.
"Housing remodeling is considered an alternative for complexes where reconstruction is difficult because of its faster timeline," an industry official said. "It also shows high rates of original resident resettlement, but various regulations are making it difficult to gain traction."
Kwon Dae-joong, an endowed chair professor at Hansung University, said, "The advantages of remodeling projects can only be highlighted when vertical and horizontal extensions are fully permitted."
