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[2013] Mayor’s Speech

  • We Will Lower the Maintenance Fees and Extend the Lifespan of Apartments

  • [2013] Mayor’s Speech SMG 1364

    Announcement of Innovative Plans on Apartment Management

    Date: March 12, 2013
    Venue: Briefing Room, Seoul City Hall

    Hello Seoul citizens and reporters,

    The weather is getting warmer, isn’t it? I think spring is just around the corner. Today, I would like to announce the Seoul Metropolitan Government’s newly-established plan to innovate the management of apartment buildings. Through this plan, we will lower the maintenance fees and extend the lifespan of apartments. Like the coming of spring, I want this to be hopeful news.

    I will now speak about the reality of our apartment buildings, which was featured in a broadcast on March 5.

    About 59 percent of all households in Seoul are in apartment buildings, and if such buildings are managed well, Seoul citizens can live well also. However, many citizens have pointed to the excessive burden and lack of transparency regarding apartment maintenance fees, as well as a lack of community spirit. To come up with innovative measures aimed at addressing these issues, the Seoul Metropolitan Government tried to gather as many opinions as possible and analyzed them carefully.

    Based on the results, we have summarized the opinions of Seoul citizens.

    “I don’t know what apartment representatives are doing.”
    “Old apartment complexes are not being repaired because owners are hoping they will be rebuilt, making it inconvenient for the residents, who must live with the deteriorating facilities.”

    The residents made plenty of suggestions.

    As such, the Seoul Metropolitan Government decided to focus on innovating the management of apartment buildings, and came up with four measures to achieve it. Expressed from the perspective of residents, first, “we want to know” how the apartment buildings are being managed. Second, “we want to live frugally” in the mid to long term by having maintenance fees reduced. Third, “we want to stay as long as possible” by having necessary maintenance done in a timely manner. Lastly, “we want to live side by side with our neighbors.”

    First, we want to know.

    This refers to transparency, which can be achieved by securing the responsibility of the resident representative, disclosing apartment management information to the public, and strengthening the public interest. Above all, the expansion of resident participation is essential. As a first step, the responsibility of the resident representative will be increased, and steps will be taken to prevent corruption and irregularities in management. On-the-job training and ethics education should be made mandatory, and the minutes of the meetings held by the resident representative will be disclosed publicly. When any irregularities are detected, harsh punishment will be imposed.

    Additionally, the standardization of apartment maintenance fees in accounting is crucial, and while making it mandatory to disclose information, residents should be welcomed to participate anytime. When asked by residents, experts should be dispatched for monitoring, and any corruption reported at apartment buildings will be curbed. Currently, about 42 percent of residents who live in apartment buildings in Seoul are tenants; thus, tenants will be given opportunities to take part in the decision-making process of apartment management.

    Second, we want to live frugally.

    There are several ways to live frugally in apartment buildings, such as by facilitating joint agreements, minimizing construction services fees, and simplifying the maintenance fees. By maximizing profits, maintenance fees can be reduced. The maintenance fees are divided into joint maintenance fees and individual dues. After analyzing the data and conducting a survey of apartment residents, we found that the maintenance fees differ by as much as two to five times by item and apartment complex. If occupants participate actively and managers demonstrate expertise, the joint maintenance fees could be reduced by up to 30 percent.

    The smaller the apartment complex, the higher the maintenance fees should be, right? Hence, joint management is the solution. Joint agreements with neighboring apartment complexes on technical issues and the period of construction and services should be made, and joint purchases of essential items should be arranged. In fact, “networks of sharing” play an important role in apartment buildings.

    Also, in the process of commissioning construction services, price gouging and collusion occur frequently. By disclosing the signing process, bid rigging and closed-door transactions should be rooted out. Moreover, wasteful spending should be prevented through careful monitoring with the participation of residents and experts, and unnecessary expenses will be prevented by systematically managing the profiles of construction providers. Individual dues, such as electricity, gas, and heating, account for more than half of the maintenance fees. In order to save money in this regard, a manual on practical energy conservation will be distributed among residents.

    Also, LED lighting will be installed in underground parking lots and high-efficiency facilities will be built. There have been some reports made regarding surplus funds, which are the result of the excessive collection of maintenance fees, being used to cover the costs of the resident representative meeting. We will do our best to prevent the collection of such surplus funds.

    As you know, regular flea markets, advertisements, and the disposal of recycled products generate significant profits. Hence, such profits should be diversified and used to minimize maintenance fees. After identifying the best methods of reducing maintenance fees, the Seoul Metropolitan Government will promote such methods to all apartment complexes.

    Third, we want to stay as long as possible.

    If thorough, long-term repair plans are established, repair work is done in a timely manner, the scope of public support for apartment buildings is expanded, perceptions are improved, and a variety of remodeling measures are set up in advance, residents will be able to stay in their apartments longer under much better conditions. Recently, while holding out for re-construction, many apartment buildings have not received necessary repairs or renovations, thereby reducing the lifespan of the buildings to about one-half or one-third that of similar buildings in advanced countries. Furthermore, with the decreasing profitability of the reconstruction market, many residents now face safety issues caused by lack of maintenance and deterioration.

    To address this, the Seoul Metropolitan Government will set up and distribute a standardized plan for long-term repairs, and we will help each apartment complex implement a well-established plan. To this end, data on repair work should be managed in a systematic manner, as currently, long-term repair plans are not maintained accurately. Regardless of the plan, only 61 percent are actually implemented and 38 percent are abandoned. However, we will try to maintain the established plans. By completing repair and renovation work in a timely manner, we will ensure that apartment buildings are kept safe and sound. To aid in this effort, experts and public officials will cooperate with each other to properly monitor the conditions, and public support of repair and maintenance work will be expanded while relevant information on repairs and maintenance will be disclosed to the public. Also, apartment buildings that are determined to have been well maintained will be given incentives, and above all, the responsibility of construction companies will be strengthened and stronger standards will be applied to new apartment building projects to prevent poor construction. If reconstruction is deemed to be too difficult, remodeling is a good alternative. In this way, favorable living conditions will be preserved.

    Fourth, we want to live side by side with our neighbors.

    More residents should participate in the management of apartment buildings, and management should be directly involved in residents’ lives. This would significantly expand opportunities and means for cooperation. It is of particular importance that we restore the community spirit of apartment buildings. Therefore, the Seoul Metropolitan Government will endeavor to create spaces where neighbors can interact and work together. Since 2011, in hopes of accelerating the growth of community activities, we have been supporting resident-led projects, placing community planners, and announcing examples of best practices. We hope these efforts increase and strengthen interactions between residents. Public bulletin boards placed inside elevators are a good medium for conveying news among neighbors, right? Residents in an apartment complex in Sangdo-dong have been introducing themselves using such bulletin boards, and ideas on how to save energy have been shared as well. In this way, the expansion of community spaces begins with small steps.

    With the goal of restoring community spirit, we will learn from residents. Fundamentally, when community activities help people in their daily lives, they strengthen the sense of participation and motivation among residents. Activities such as providing childcare, welfare, food, and home services and facilitating apartment cooperatives could achieve great results if done properly. For such measures to be successful, close partnerships with relevant players and the attention and participation of residents’ are critical. Furthermore, information should be disclosed and promoted through the Seoul City Integrated Information Platform, and the Joint Housing Management Support Center will fulfill its role in terms of information sharing, training, monitoring, and control. As such, we will support Seoul residents. Also, the Seoul City Joint Housing Integrated Information Platform, a portal site that discloses housing information to the public, will open in March. The platform will facilitate the automatic provision of 292 standardized types of information on accounting, financial statements, construction bidding information, and contract terms, and other community news will be disclosed as well. The Joint Housing Management Support Center, based on private governance, will lead the initiative. It will be in charge of monitoring, reporting, counseling, running the resident representatives meetings, operating the integrated information platform, and making requests of the authorities concerned regarding investigations of and punishment for corruption.

    In order to build “happy” apartment building communities, the Seoul Metropolitan Government will make all efforts to decrease maintenance fees and extend the lifespan of apartment buildings. Please share your thoughts and suggestions on the Seoul City Joint Housing website, the Seoul City Facebook, and the Seoul Mania Twitter page. Can you find the website addresses?

    Thank you.