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[Exclusive] President Lee’s Bundang home received floor area ratio benefits under special law… but private reconstruction is ‘shackled’ | [단독] 李 대통령 분당 집은 특별법으로 용적률 수혜받았는데 … 민간 재건축은 ‘족쇄’

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[Exclusive] President Lee's Bundang home received floor area ratio benefits under special law... but private reconstruction is 'shackled' | [단독] 李 대통령 분당 집은 특별법으로 용적률 수혜받았는데 … 민간 재건축은 '족쇄'

• Lee’s apartment private reconstruction, floor area ratio 360.17% • Incentives up to 1.5 times under the 1st Phase New City Special Act • Lee administration excludes incentives for private maintenance projects • Private projects in Class 3 General Residential Areas limited to 300% • Opposition: “He enjoys benefits while regulating others”

Controversy over fairness is rising as the government and ruling party decided not to apply floor area ratio incentives to private reconstruction and redevelopment. Criticism is emerging that while the apartment in Bundang owned by President Lee Jae-myung received floor area ratio benefits (360%) under the 1st Phase New City Special Act and is about to be reborn as an ultra-high-priced apartment, the Lee Jae-myung administration is actually freezing the private reconstruction floor area ratio at 300%.

Floor area ratio (FAR) refers to the ratio of a building’s total floor area (volume) to the total land area, expressed as a percentage. Since a higher FAR allows for more total floor area to be built, increasing construction density, administrative authorities designate an upper limit for FAR to ensure an appropriate and pleasant residential environment. However, the market prefers high FAR because it allows for increasing the building’s total floor area (number of floors/units) relative to the land area, thereby raising profits and value.

According to NewDaily’s coverage on the 9th, Seongnam City, Gyeonggi-do, proceeded with the ‘Maintenance Zone Designation Notice’ for Yangji Village in Bundang-gu on January 27. They announced the ‘Special Maintenance Zone Designation and Topographical Map’ for Yangji Village. This apartment reconstruction is classified as private reconstruction, and 294 units of private rental housing must also be secured.

The reconstruction of Yangji Village (4,392 households, 291,584㎡) will have a maximum FAR of 333.09% to 383.79% applied per complex. In particular, the Kumho Complex 1 apartment owned by President Lee will have a FAR of 360.17% applied.

If development proceeds according to the notice, it will be reborn as a luxury apartment complex with a maximum height of 37 floors and 6,839 households (294 rental units). As profitability increased due to the increased FAR, the burden on union members was also reduced. A reconstruction office opened on the 2nd, and major construction companies are currently eyeing the reconstruction.

These FAR benefits were made possible by the application of the ‘Special Act on Old Planned Cities’ passed during the Yoon Suk-yeol administration. This bill, which went into full effect on April 27, 2024, allowed for a 150% increase in the legal upper limit of the floor area ratio (300% → 450% based on Class 3 General Residential Areas). Kumho Complex 1, owned by President Lee, is a Class 3 General Residential Area and is eligible for the benefits of this bill.

The actual transaction price of the apartment (164.25㎡) owned by President Lee has risen significantly due to selection as a leading district and benefits from the 1st Phase New City Maintenance Act. According to the Ministry of Land, Infrastructure and Transport’s actual transaction price system, apartments of the same area traded between 2.8 billion and 2.97 billion won last December. The last transaction price in May, before President Lee’s inauguration, was 2.595 billion won.

On the other hand, the Lee Jae-myung administration and the Democratic Party of Korea appear unwilling to give benefits to private reconstruction and redevelopment. The government and ruling party are pushing for FAR incentives through the ‘Act on the Improvement of Urban Areas and Residential Environments’ (Urban Improvement Act) proposed by Democratic Party lawmaker Moon Jin-seok.

This bill raises the FAR up to 1.3 times the legal limit for redevelopment and reconstruction implemented by public institutions such as the Korea Land and Housing Corporation (LH). If this law is applied, the FAR for public redevelopment (currently 360%) and reconstruction (currently 300%) will increase to a maximum of 390%.

The Ministry of Land, Infrastructure and Transport agreed to exclude FAR incentives for private maintenance projects. This is because applying FAR incentives to private projects is likely to increase prices of reconstruction apartment complexes in the Gangnam 3 districts.

Accordingly, under the existing Urban Improvement Act, incentives (1.2 times) are given only to maintenance projects in station influence areas, and the FAR for Class 3 General Residential Areas is limited to the legal upper limit of 300%.

The opposition party points out that this situation is typical ‘Naeronambul’ (hypocrisy/double standards). This is because while the apartment owned by President Lee received special law benefits during the Yoon administration and gained momentum for private reconstruction, private maintenance projects were excluded from FAR incentives.

The People Power Party argues that the FAR should also be increased for private maintenance projects and is calling for the linked passage of the Special Act on Promotion of Reconstruction and Redevelopment Projects and the amendment to the Urban Improvement Act. However, the Blue House and the Ministry of Land, Infrastructure and Transport have reportedly expressed their refusal due to concerns about possible housing price increases.

A People Power Party lawmaker on the National Assembly’s Land, Infrastructure and Transport Committee told NewDaily, “President Lee’s Bundang apartment received FAR incentives through national policy, giving wings to private reconstruction, and there are prospects that the price will rise nearly double from the current price once reconstruction is complete,” adding, “I find it hard to understand why they are not giving FAR benefits to other people’s private reconstruction and are deliberately discriminating against them compared to public maintenance projects.”

Lee Jun-seok, representative of the New Reform Party, also stated, “If we follow the government and ruling party’s policy, the Yangji Village complex (which is pursuing reconstruction via private trust method) cannot receive FAR incentives,” and added, “I wonder if Yangji Village will become the first complex to declare that they will not accept incentives because they are a private entity.”

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