Seoul Mayor Oh Se-hoon won a fifth term in the June 3 local elections. Exit polls by the three major broadcasters showed candidate Jung Won-oh at 51.4 percent and Oh at 46.0 percent, a 5.4-percentage-point deficit, but Oh reversed this in the actual vote count for a narrow victory. While various interpretations of the election results are possible, many analyses point to real estate sentiment as a key variable. Support for Oh was assessed as relatively strong in areas with high home price growth, as well as in areas with strong reconstruction expectations such as Mok-dong and Yeouido. Immediately after his victory, Oh himself cited real estate as Seoul's biggest pending issue and stressed the need for consultation with the central government.
So, does real estate policy change immediately when the mayor changes? The answer is somewhat complex. This is because one must distinguish between the areas the Seoul mayor can directly adjust and those over which the central government and the National Assembly hold authority. Real estate policy appears to be a single thing, but in reality, urban planning, permits, financial regulation, taxation, levies, and the transaction permit system each operate according to different legal bases and authorities.
The area the mayor can move: the speed of redevelopment projects
The area where the Seoul mayor exerts relatively direct influence is the speed of redevelopment projects. Through its Rapid Integrated Planning system, the Seoul Metropolitan Government has participated in plan formulation from the early stages of reconstruction and redevelopment, shortening the procedures for district designation and review. Oh has presented a direction to expand this further, breaking ground on 310,000 units by 2031, with 85 districts and 85,000 units that can break ground within three years to be intensively managed as core strategic redevelopment districts. His plan to reduce the redevelopment period from more than 20 years to around 12 years is in the same vein.
The Seoul Metropolitan Government holds considerable authority in district designation, redevelopment plan formulation, adjustment of land-use zoning and floor area ratios, operation of urban planning and building committee reviews, and coordination of differences between departments. Whether to allow higher construction (floor area ratio), what public facilities to secure, and whether to bundle multiple procedures into a single review all directly affect project speed. In this area, the mayor's policy will and administrative operating style make a clear difference.
The area the mayor cannot easily change: taxes, loans, and levies
By contrast, many of the tools that directly move home prices and transactions are outside the mayor's authority. The June 27 household debt management strengthening measures last year (such as caps on mortgage limits in the metropolitan area and regulated zones), the October 15 housing market stabilization measures (designating all of Seoul and 12 areas in Gyeonggi as regulated zones and land transaction permit zones, and applying differentiated loan limits by home price bracket), and tax systems such as property tax and capital gains tax are fundamentally the domain of the central government and the National Assembly. The mayor can only offer opinions at Cabinet meetings or consultations with relevant ministries, and cannot unilaterally set the direction of legislative amendments or financial regulation.
The reconstruction excess profit recapture system (jaechohwan) is the same. Jaechohwan is a system that recaptures a portion of the excess profit generated from reconstruction as a reconstruction levy. It is commonly explained as "if you earn a lot from reconstruction, you pay a portion as a levy," but legally it is a levy system based on the Act on the Recapture of Reconstruction Excess Profit. Therefore, the Seoul Metropolitan Government cannot abolish or ease it on its own, and reforming the system must go through legislative and policy judgment by the National Assembly and the government.
The current debate surrounding jaechohwan is not simple. The abolition argument holds that levying a charge on profits not yet realized is excessive, and that it may overlap with other burdens such as public contributions, property tax, and capital gains tax. The retention argument stresses the need to recapture a portion of the development gains created by reconstruction that would otherwise flow in only one direction, and to suppress market overheating. Either way, the decision-making power lies not with the Seoul Metropolitan Government but with the National Assembly and the government. This is why Oh's election does not immediately mean the abolition or easing of jaechohwan.
Examined through cases like these, the boundary of authority becomes clear. This boundary is also confirmed in actual redevelopment projects.
First, the speed is something the Seoul Metropolitan Government can largely determine. Yeouido Sibeom Apartments passed integrated redevelopment project review in November 2025, incorporating facilities with a public contribution character such as an elevated pedestrian bridge connecting the Han River and the complex, a cross-shaped public pedestrian passage, a riverside cultural park, and a daycare center, kindergarten, and community childcare center. It shows that the Seoul Metropolitan Government can play a substantive role in presenting the planning direction, managing reviews, and advancing the project to the next stage. At the same time, it also reveals that residents' acceptance of public contribution facilities and discussions over project feasibility affect speed.
By contrast, the reconstruction levy is divided by law. Jaechohwan is not imposed unconditionally just because a project is reconstruction. Under the current system, if the average profit per person, calculated by dividing the excess profit by the number of union members, is 80 million won or less, it is exempt; if it exceeds this, a levy rate of 10 to 50 percent is applied according to the bracket. The 2024 revision eased the exemption threshold and the levy brackets, reducing the burden somewhat. The Gwacheon Jugong Complexes 8 and 9 in Gyeonggi were assessed as having an average profit per person not exceeding 80 million won, and were exempt from the levy. This means that even for reconstruction in the same metropolitan area, the result varies depending on the home value at the start and end points, the normal home price increase, development costs, and the number of union members. Conversely, Banpo Hyundai (now Banpo Centreville Asterium) in Seocho-gu, the first complex subject to jaechohwan, has seen its levy imposition repeatedly postponed amid intertwined discussions over system revisions, changes in calculation standards, and the imposition procedure. Even if the Seoul Metropolitan Government processes permits quickly, if the legal levy issue remains, a bottleneck can reappear in the contribution charges and project profitability.
Public contribution lies in between. Public contribution is a mechanism that returns a portion of the rise in land value created by an increased floor area ratio or a change in land-use zoning in the form of roads, parks, public buildings, public rental housing, public pedestrian passages, and the like. It is not money arbitrarily demanded by the administrative authority, but a condition under urban planning determined through the National Land Planning Act (Article 52-2), Seoul city ordinances and operating standards, individual negotiations, and urban planning review. The Seoul Metropolitan Government uses as its calculation basis the land value (within the range of the risen land value) equivalent to 60 percent of the increased floor area ratio. However, what facilities are provided, where, and in what amount varies by project through negotiation and review.
Apgujeong District 3 illustrates this well. The Seoul Metropolitan Government initially announced that it had accepted a Han River public pedestrian bridge connecting Apgujeong and Seongsu as a public contribution measure, but after internal union opposition to the multi-hundred-billion-won project cost and consultations with relevant agencies, the pedestrian bridge was excluded from the redevelopment plan revision put up for public viewing. Instead, the union proposed public buildings, a covered road, and a park as public contributions. This scene shows that public contribution is not a matter of abstract public good but an actual negotiation condition entangling project cost, schedule, union member consent, consultation with relevant agencies, and Seoul Metropolitan Government review.
The gap between the change real estate sentiment demanded and the mayor's authority
In the end, the assessment that "real estate sentiment created the fifth term" is only half right. Even if real estate public sentiment greatly influenced the result, much of the change that sentiment expects is not an area the Seoul mayor can resolve alone. Home price stabilization, tax burdens, loan regulation, and easing of the reconstruction levy are mostly the responsibility of the central government and the National Assembly. What the mayor can directly move is closer to the permit speed of redevelopment projects, urban planning standards, public contribution negotiations, and the operation of reviews.
Therefore, there are two points to watch going forward. First, whether a People Power Party mayor and a Democratic Party government and National Assembly will clash or join hands over central government authority matters such as jaechohwan, the tax system, and loan regulation. Second, whether the "speed" the Seoul Metropolitan Government advocates can be combined with predictable standards. For jaechohwan, the calculation standards must be clear; for public contribution, the appropriateness of the burden and the decision-making procedure must be clear. If the standards are blurry, even if procedures speed up, the union will struggle to persuade its general meeting, and construction firms and financial institutions will have no choice but to evaluate projects conservatively.
The real estate challenge of Oh Se-hoon's fifth-term Seoul administration ultimately lies in creating both fast procedures and clear standards together. The Seoul Metropolitan Government can increase the speed of permits and urban planning. But jaechohwan, the tax system, and loan regulation are the domain of the government and the National Assembly, and public contribution too is not sufficient on the city's will alone, as it must go through the review of unions, residents, relevant agencies, and committees. For redevelopment projects to lead to actual supply, the Seoul Metropolitan Government's speed, the National Assembly and government's legislative arrangements, and predictable standards that project actors can trust must all be in place together.
