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[2015] Mayor’s Speech

  • Discussion on the Desirable Direction for Our Home

  • [2015] Mayor’s Speech SMG 1332

    Press Briefing on “Control Measures and Plans for Newtown Redevelopment”

    Date April 22nd, 2015 | Venue Briefing Room, Seoul City Hall

    Seoul citizens and journalists, it is a great pleasure to see you here today. So far, Seoul has been chasing a mirage. It seems as though Newtown redevelopment promises a golden age for all. As you are well aware, every politician these days sets forth a designation as Newtown as his or her campaign pledge. Landlords, speculators, and even every one of us encourage each other in this pursuit.

    However, it is time for us to look back. Of the total area of Seoul, the residential area is 313km², and 26km² of area was designated as Newtown. This was not something conducted and completed in a short time. After designation as Newtown, however, a series of painful and heartbreaking events kept occurring. Demolition started and people were thrown out of their places. Tears were falling from many people’s eyes. Business became stagnant and houses in the neighborhood became worn-out. The people left behind were devastated. You might remember that I was standing right here three years ago. I was desperate. The desperation was about how to solve the problems of over-designated Newtown redevelopments and how to settle people’s lives. Standing here, I apologized first as the person in charge of the administration of Seoul. I then told you of our control measures. The key was “as citizens want.” Three years have passed since then; it is time to sort things out and move on. Therefore, we will look into the achievements made so far and the challenges left to overcome, and it is the moment to tell you how we will finish the project.

    The government staff has been working overtime to settle these problems. They have been on the phone night and day. They have contemplated long and hard on how to grasp and serve residents’ actual wants. They have spent night after night at the sites. As you see here, there were 620 briefing sessions for residents, 552 consultations, and 1,717 surveys. We took so much time to convince and share with residents. The staff put tremendous effort into it. Yesterday, I bought pizzas for the related departments. Too much time, time that cannot be made up for with a pizza, was put in by residents as well as the staff. I daresay that the settlement of the biggest conflict in history of the world was conducted over the last three years.

    Of course, we provided institutional, administrative, and financial support as well. As you might remember, when I first took office, there were always very loud voices and big rallies of protests and support for Newtown redevelopment in Seoul Plaza. Wherever I went, I saw those banners and met those civic groups. Now they have been for the most part settled and resolved.

    Indeed, we have had a lot of difficulties. For example, in Singil zone no. 9, the conducting agent and the protestors were reversed. It was one of the places where conflict between residents was the most severe. To settle the chaotic conflict, Seoul gathered conducting agents and protestors and organized a residents’ association. Seating those people who disagreed and were hostile to each other across the table from each other, the process itself was very difficult. However, after organizing the residents’ association, we held 25 meetings and agreements over seven months. It was an extremely difficult process, but thanks to the staff and residents, I can say that the project is now on track. The biggest achievement gained through the process was residents’ participation, a change in awareness, and reinforced conducting agents. Most importantly, the residents became interested and engaged in the regeneration project. They understood the project, confirmed its profitability, and recognized the bubbles. Solid communication made rumors disappear. The residents’ attention became a positive check and a foundation for the sound operation of the union. Finally, the voice of the residents got to display its power. As a result, the Newtown projects in 245 areas have been cancelled over the last three years. This removed restrictions on activities, enabling anyone to construct new buildings or to reconstruct existing buildings. Residents became able to exercise their property rights.

    For the released areas, Seoul has been conducting a variety of alternative projects. As you are well aware, alternative projects mean integrating physical and social/economical regeneration projects. It is also a system where the residents are at the center, supported by the public sector. They include neighborhood regeneration, residential environment management, and roadside residency redevelopment. Neighborhood regeneration is being intensively conducted in the released areas, including Changsin, Sung-in, and Jangwi-dong. Residential environmental management is being carried out in 22 released areas. Roadside residency redevelopment is being operated in five areas including Myeonmok-dong, Jungnang-gu. Still, operations are being delayed in many areas.

    To summarize, through the surveys, 245 areas determined their own path. Out of the remaining 438 areas, 111 areas do not have a conducting agent and 327 areas do. Many of these areas are the places where the real estate business is slowing down or conflicts between residents are severe. In most cases, the two elements are closely connected. These areas cause continuous expense for management and human resources in vain, and there are many restrictions on the exercise of their property rights. This adds to the residents’ burdens. In these areas, the residents are complaining and remonstrating that they would be willing to conduct the project but the infrastructure is excessive. They say that the government told them not to worry, but now they have to pay an additional 300 million won. It was inconvenient, and now apprehension is raised, the roads are frozen in the winter, making regeneration essential, but the strong protest of commercial buildings next to the roads prevents the regeneration. I cannot pass this over in silence any more. I cannot look away from the residents’ pain caused by the regeneration. If the last three years has been the time to find ways to go forward to with residents’ intention, now is the time for Seoul to make a decision with the residents.

    Now, let me tell you the direction of the decision, focused analysis on regeneration, and support customized by type.

    The Seoul Government will take the lead in finishing the settlement of conflicts around Newtown redevelopment. In addition, we will provide support customized by thorough analysis on stagnated areas. We have already conducted complete surveys on 327 areas where conducting agents exist but construction has not started. We considered physical conditions, external elements of conflict, profitability, and sales rates. After the survey, the standards to classify the types were set up: dismiss agreement rate, period of stagnation, profitability for quantitative standards, necessity of physical development, activities of conducting agent, and consistency between urban planning and policy for qualitative standards.

    As the results demonstrate, they have been classified into type A, B, and C. Type A represents the areas where the project is on track. Type B accounts for 40%, where various elements of conflict have slowed the project, such as economic recession or conflicts between the contractor and association. Type C accounts for approximately 14%, and it is considered impossible or difficult to achieve the goals in these areas because new buildings have already been constructed in restricted areas or the residents are expected to cover excessive costs. Since each type has a different agenda, the methods we take to resolve the problems may be different. For type A, we will accelerate administrative and financial support to facilitate operation. For type C, if the areas are left as they are, damages to citizens will increase, so the government will halt the project itself and actively induce a shift to alternative projects. The main problem is type B. We will send professional coordinators to get rid of the factors of stagnation. We will define the circumstances in the areas and, based on that, prepare countermeasures, meaning we will choose directions between types A or C in the early stage.

    For type A, with projects on track, the standards will be relaxed to improve profitability. We will adjust the ratio of parks and green belts to unburden the residents and diversify the criteria of allowed floor area ratio to improve profitability. Standards to apply incentives will be diversified and expanded from 3 to 6.

    Rationalization of expenses to purchase rental housing will make up for construction costs, which means a decreasing loss in project costs will minimize the burden. Regarding this issue, we have already suggested to the Ministry of Land rationalizing the expenses to purchase rental housing. The Ministry is conducting these services. I hear that these developments are looking positive, so we will continue to negotiate. We will increase public financing to alleviate financial difficulties in the early stages. The financial support for the promotion committee will be raised to 1.5 billion won and 3.5 billion won for the association to completely relieve financial difficulties. This will be implemented in May. The interest rate has been lowered by 1% as well.

    One example of the rapid implementation of a project using a public management system is the reconstruction of Woosung 3-cha apartment buildings. We provided loans and supported the selection of contracts with the constructor in the early stage. As a result, the project was completed about one year earlier than neighboring areas to which the public management system was not applied. This is a very successful case for redevelopment projects, where time is always money.

    The next type is B. In these areas, conflicts slow down the projects. The factors behind the slowdown are complex. There have been problems in the contractors’ financing and low sales rate. Because of this, profitability has been reduced or the race for dominance between conducting agents has heated up. Those factors of internal conflict have been severe. To these areas, coordinators will be sent. We will actively support them to analyze the causes of the stagnation once again and bring about an agreement of residents to put the projects back on track. If that is not possible, we will cancel the project and shift it to an alternative project. For that, we have 100 professional coordinators.

    Coordinators will be assigned to every area to monitor and diagnose the problems thoroughly. To the areas with more severe conflicts, mediation experts will be assigned to seek solutions. If it is determined that comprehensive problem solving is needed, we will organize a TF with experts in each field to put the project back on track. The coordinators will be assigned first to autonomous districts that have agreed to the project starting in May.

    We will also suggest a third way, rather than the simple reasoning of conduct and release. I am confident that we have a viable third option. In areas where residents are divided between those in favor of the project and those against, boundaries should be adjusted within the area. In the past, we only tried to proceed for the entire area, so the two sides remained in conflict, delaying the project. Bugahyoen 1-3 area is an example where coordinators put the project back on track. In that area, as an additional share of expenses was charged in the beginning, the residents lost trust in the executive association, and the association and the contractor came into conflict, delaying the construction. In response, we assigned coordinators to listen to the residents’ feedback and promote their understanding. As a result, the executive association was reorganized and the project came back on track. The public involvement of the Seoul government resolved the problem.

    For type C, where the project is very difficult to be conducted, we will release the designation for the project and induce a shift to an alternative project. As the first step, the restriction on activities will be removed and we will stop the activities of conducting agents in order to cancel directly the designation of the areas where the project cannot be practically conducted. We will also subsidize service costs. The current laws do not support subsidies for service costs for directly released areas; however, a related bill is being discussed in the national assembly on motions by several members of the assembly. Specific measures to support will therefore be prepared after the release this year.

    As the second step, we will induce the residents to release the area on their own. We will actively promote the law whereby an expiration date to dismiss the project with the approval of the majority of the residents can be extended for another year and establish a foundation for the residents to choose the direction of urban regeneration. For the areas where voluntary dismissal is still impossible, specified goals cannot be achieved, and excessive burden is expected, specific ordinances will be prepared to release its authority. These areas, despite the first-phase conducting agents of type C, have remained as areas to be redeveloped for a long time, making it nearly impossible to conduct the project there. They include the areas where the activities such as extension of buildings are occurring after the release of activity restrictions and the deterioration level of structures is decreased. They are constructing new buildings and extending existing building on their own. Other cases are where there is no office and actually no activities of conducting agents, and no signs of residents’ ability to choose their own path. It is actually impossible to achieve specified goals in these areas. The release of these areas from the project is regarded as inevitable. In these cases, 28 areas decided to be released themselves. The first cases subject to direct release are where activity restrictions have been removed and no conducting office is operated, making it impossible to conduct the project. All of them were designated as the areas to be redeveloped before 2009 and have conducting agents. From May this year, we plan to release all those areas through due procedures by the second half of this year.

    The first example is Suyu 4-2 Housing Reconstruction, for which a conducting committee was approved in 2006, removing the restrictions. As you see in the picture, new buildings were constructed on the 31 yellow spots and the use was altered on the red spot. The second cases are the areas where the maximum height is restricted only to lower the profitability and the project was delayed for a long time, making it the release of these areas inevitable. Jang-an 4 Housing Reconstruction is such a case. Even though the conducting committee was approved in February 2009, it has no president or driving force, delaying all the activities for over six years. Since the activity restriction was removed in August 2012, 11 cases of new constructions and one case of extension occurred. Release is inevitable. The third is Hongeun-dong 411-3 Housing Reconstruction. Though its conducting committee was approved in 2008, the driving force was lost, stopping operation of the cleanup system and completely stopping the project. Since activity restriction was removed in 2012, as you see on the map, 42 cases of new construction and 2 of extension occurred. Here again, release is necessary.

    Finally, let me tell you about our alternative management plans for the future. First, in the areas where the project was delayed for a long period of time, the causes of the delay must be removed. Therefore, we will support swift decisions on the path to stopping all the pain and help them find a way on their own. For low-rise housing, we will establish a systematic and universal support management system.

    We will prepare public support plans by measuring deteriorated housing. We will focus on supporting customized alternative projects, such as residential environment improvement. We will regenerate released areas and foster SH Corporation as an institution specialized in regeneration to take the lead.

    Distinguished journalists, Seoul Metropolitan Government cannot neglect residents’ suffering any more. Based on the time, achievements, and experience of the last three years of following the residents’ intentions, we will decide with them. Wasteful arguments, which damage relationships with neighbors and cause massive social loss, should be terminated. Now is the time to discuss desirable directions for our homes. Please keep an eye on the discussion and the housing regeneration action plan to be announced on the 27th, which will develop Seoul into a town of coexistence.