[복덕방기자들]Will house prices fall if public reconstruction is carried out? “The Biggest Misunderstanding”

[이데일리 황현규 김나리 기자] “They say that if there is public reconstruction, the number of rental houses will increase and house prices will fall, but it is really a misconception. Rental housing is also introduced into private reconstruction and does not have a significant impact on house prices.” (Korea Land and Housing Corporation (LH) Public Reconstruction Manager)

Recently, as ‘Mangwoo District 1’ was selected as the No. 1 public reconstruction project site, the public reconstruction project is receiving attention again.

Public reconstruction is one of the public maintenance projects in accordance with the plan to expand housing supply in the metropolitan area, which was announced in August 4 last year. The public will participate and activate housing supply and reconstruction by easing city regulations such as floor area ratio and number of floors.

While strengthening project transparency through public participation through public reconstruction, the government is helping places that have had difficulties in carrying out reconstruction projects in the past by providing incentives such as an increase in the floor area ratio of apartments, an increase in the type of use area, and integrated deliberation.

Edaily Ministry of Construction and Real Estate YouTube ‘Bokdeokbang reporters’ visited the apartment building in Mangwoo 1 district in Jungnang-gu, Seoul and Junggok apartment in Gwangjin-gu, where public reconstruction is being actively promoted, and heard directly from the person in charge of public reconstruction about public reconstruction.

Although the Mangwoo District 1 and Junggok Apartments are outdated apartments, development has been delayed for a long time due to internal conflicts and lack of business feasibility. However, according to LH, the project is progressing smoothly since they adopted the public reconstruction project method.

In particular, Mangwoo District 1 was reborn as the first public reconstruction project site by signing a business agreement with LH on the 27th. Mangwoo District 1, where low-rise apartments of 7 stories or less are gathered, will be reborn as a new 28-story high-rise apartment building.

The Junggok District 1 is also accelerating the project by gathering the consent of the residents. The establishment of a cooperative is currently underway, and if an MOU is signed and the business begins in earnest, an old 5-story apartment building will be able to be transformed into an 18-story new apartment.

On this day, LH officials, who toured Mangwoo District 1 and Junggok apartment with reporters from Bokdeokbang, had time to explain various misunderstandings related to public reconstruction. Doo-hyeon Lee, deputy director of the Public Reconstruction Department of the LH Metropolitan Housing Supply Special Headquarters, said, “It is a misunderstanding that rental housing deteriorates business feasibility or decreases house prices. There is not much difference.”

He also emphasized, “It is not true that apartment ownership is transferred to LH while the project is being carried out. Min Jun-oh, a manager of the same LH, also explained, “The public provides incentives and helps the project to proceed quickly, but other procedures are carried out in the same way as the existing reconstruction.”

Mangwoo District 1, Jungnang-gu, which is undergoing public reconstruction (Photo=Reporter Hwang Hyeon-gyu)

Residents are also satisfied with the public reconstruction. Choi Yong-joon, president of Mangwoo District 1, said, “I was worried about poor business feasibility, but I felt the merit of public reconstruction and conducted consulting. Let’s actually bump into it.”

In this regard, Kim Gyu-gyu, head of the Asset Succession Research Institute at Korea Investment & Securities Co., said, “For places where it is difficult to promote reconstruction on their own, just by doing business with the public, such as LH, it is possible to complete the actual reconstruction project and improve the residential area.” If it is difficult to implement, it is a reconstruction method that should be paid attention to.”

In addition, accurate incentives and schedules for public reconstruction projects introduced directly by LH personnel, experts’ evaluation of business feasibility of mangwoo and Junggok, and residents’ reactions can be checked through the YouTube ‘Bokdeokbang Reporters’ video.

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