The government and ruling party pledged to boost housing supply by offering floor area ratio (FAR) incentives to public redevelopment sites, but 42% of all project sites will not benefit from the policy, the Seoul Economic Daily has learned. Key project sites in Seoul's most sought-after residential areas, including Gangnam and Yongsan, are entirely excluded from the FAR increase — contrary to market expectations. Moreover, many projects remain stuck in early stages, meaning actual housing supply is years away.
According to data obtained by the Seoul Economic Daily through the office of Rep. Kim Eun-hye of the People Power Party on May 31, only 25 public redevelopment sites are eligible for FAR incentives under the Urban and Residential Environment Improvement Act amendment submitted to the National Assembly plenary session. Of the total 43 sites — 38 public redevelopment and five public reconstruction — the remaining 18 (41.9%) cannot expect FAR increases even if the bill passes. All eligible sites are public redevelopment projects; not a single public reconstruction site is included.
The reason so many sites are excluded lies in the bill's broad exemption clauses. Sites designated as speculative overheating zones at the time of the government's September 7 supply measures last year, sites jointly implemented by cooperatives and public agencies such as Korea Land and Housing Corporation (LH), and sites that had already received or applied for project approval before the September 7 measures are all excluded from FAR incentives. Notable examples include the Geoyeo Saemaeul public redevelopment site in Seoul's Songpa-gu, the Sinbanpo 7-cha public reconstruction site in Seocho-gu, and the Yongsan Gangbyeon Gangseo apartment public reconstruction site. The government has not scheduled any new rounds of public redevelopment or reconstruction applications, making it difficult to identify additional eligible sites.
The amendment allows FAR at public redevelopment and reconstruction sites to be raised up to 1.3 times the legal ceiling. Based on general residential zones, public redevelopment sites can increase FAR to 360%, and public reconstruction sites can raise it from 300% to a maximum of 390%. The government and ruling party aim to secure additional housing supply in high-demand urban areas through public-led high-density development.
However, the supply expansion effect at individual project sites is expected to fall short of expectations. At the Cheonho A1-1 public redevelopment site in Seoul's Gangdong-gu, raising the current FAR of 359% to 390% would increase the number of units from 747 to only 811 — a gain of just 64 units. In the Gwangmyeong District 7 site in Gyeonggi Province, the current plan calls for 3,010 units at 315% FAR; applying 390% would increase the total to approximately 3,727 units, a gain of about 717 units. Since sites receiving FAR incentives also face greater obligations for public contributions such as rental housing, resident opposition could potentially stall project progress.
The bigger problem is the significant time lag before actual housing delivery. Public redevelopment and reconstruction programs are now in their sixth year since their introduction in 2020, yet not a single site has reached the groundbreaking stage. Of all 43 sites, only four have received project implementation plan approval — often called the "70% milestone" of project completion. Most remain stuck in early stages such as candidate site selection or designation of improvement zones and project implementers. The Ministry of Land, Infrastructure and Transport has set a target to break ground at the Sinseol District 1 site — the first public redevelopment project — next year, followed by Yangpyeong District 13 (public redevelopment) and Singil District 13 (public reconstruction) in 2028, for a total of three sites.
The opposition party argues that meaningful supply expansion is only possible if private redevelopment projects are activated alongside public ones. Since the private sector accounts for a far larger share of urban housing supply than the public sector, public-focused policies alone have inherent limitations, they contend. According to government statistics, private-sector projects accounted for 83.4% (26,789 units) of the 32,119 housing units that broke ground in Seoul last year.
Rep. Kim introduced a bill to extend FAR benefits to private redevelopment and reconstruction sites, but it has failed to receive proper deliberation due to opposition from the Democratic Party of Korea. The bill has been stuck in the National Assembly's Land, Infrastructure and Transport Committee for 18 months since its introduction in September 2024. It was excluded from the agenda of the committee's legislation review subcommittee meeting held on May 30, making no progress whatsoever.
The bill proposes a three-year temporary measure to raise FAR for private redevelopment projects beyond legal ceilings to improve project viability. The key provisions raise FAR for transit-oriented redevelopment projects from 360% to 390% and for general redevelopment projects from 300% to 330%. It also includes measures to ease green space, park, and building regulations through urban planning committee review, and to lower the threshold for cooperative establishment to facilitate faster project execution.
"Concentrating FAR incentives solely on public projects while neglecting private redevelopment — which accounts for 80% of total housing supply — will only worsen the housing supply-demand imbalance," Rep. Kim said. "Rather than insisting on state-led supply measures and demand controls through tax increases, the government should accelerate housing supply by activating private redevelopment projects."