Integrated redevelopment projects across South Korea's first-generation new towns are running into serious trouble. Even Bundang's Yangji Maeul, widely viewed as the most economically viable site, has been forced to replace its trust firm amid conflicts among residents and apartment complexes. The setback raises red flags over the government's plan to supply 63,000 homes in the first-generation new towns by 2030. Critics say the trust-based model, which the government introduced to speed up projects, has instead become entangled in the competing interests of residents and complexes, complicating redevelopment — a flaw rooted in flawed planning from the outset.
According to the urban redevelopment industry on the 7th, the residents' representative group of Yangji Maeul in Sunae-dong, Bundang-gu, Seongnam City, Gyeonggi Province, will hold an information session for owners on the 9th to select a preliminary trust operator. The group had previously terminated its business agreement with Korea Land Trust, the existing project operator, following disputes.
While the uneasy coexistence between Yangji Maeul and Korea Land Trust has ended, many analysts say the real conflict is only beginning. The Yangji Maeul redevelopment is currently split between the residents' representative group and the redevelopment preparatory committee over project settlement and unit allocation. The core issues are the settlement method and in-place redevelopment. In integrated redevelopment, the settlement method significantly affects returns for each complex and housing type. Yangji Maeul concluded that settlement would be coordinated through a federated settlement method within the integrated framework and completed the designation of a special redevelopment zone, but it has yet to reach agreement on the details.
On top of that, starting in August this year, a revised Special Act on Aging Planned Cities will take effect, requiring majority consent from each complex when designating a project operator. While the revision aims to resolve conflicts before projects proceed, it also means that a project can collapse if a majority of residents in even a single complex oppose it. "By the nature of trust firms, the structure makes it impossible for them to take the lead," a trust industry official said. "No trust firm wants to mediate conflicts while taking on litigation risks."
Because the issue stems from the structural nature of trust-led integrated redevelopment, observers expect similar conflicts to emerge in other first-generation new towns, including Ilsan, Pyeongchon, Sanbon and Jungdong. "Unless the Ministry of Land, Infrastructure and Transport, local governments and trust firms put their heads together to mediate, the current integrated redevelopment of first-generation new towns is structurally bound to drift amid inter-complex conflicts," said Seo Jin-hyung, professor of real estate law at Kwangwoon University. "Even now, mechanisms to coordinate conflicts and differences need to be established."
