Seoul Mayor Oh Se-hoon (right) and Cheong Wa Dae Policy Chief Kim Yong-beom (far left) at a Cabinet meeting on July 14. [Cheong Wa Dae Press Photographers Pool] (Yonhap)
Seoul Mayor Oh Se-hoon (right) and Cheong Wa Dae Policy Chief Kim Yong-beom (far left) at a Cabinet meeting on July 14. [Cheong Wa Dae Press Photographers Pool] (Yonhap)

Cheong Wa Dae Policy Chief Kim Yong-beom and Seoul Mayor Oh Se-hoon are set to meet next week, drawing attention as the central government and the Seoul Metropolitan Government remain at odds over how to boost housing supply. Ahead of the meeting, the city is preparing a report that includes what it calls a "10-year white paper" documenting how redevelopment projects were halted during the tenure of former Seoul Mayor Park Won-soon.

According to government and city officials Wednesday, Kim and Oh have finalized plans to meet during the first week of August. Both sides said only the date had been set and that the agenda had yet to be determined.

Oh met with Ministry of Land, Infrastructure and Transport Minister Kim Yun-deok on Friday to discuss adding housing units in key areas including the Yongsan International Business District. Both sides agreed on the broad goal of expanding supply, but confirmed a gap in their positions over the number of units to be built in the district. The ministry has said it wants 10,000 units there, while the city has said it can accommodate a maximum of 8,000.

With the Kim Yong-beom meeting coming roughly two weeks after the ministerial talks, the key question is whether the two sides will take up a broad range of issues — including deregulation of relocation loan rules and other redevelopment regulations, the use of semi-industrial zones, and the use of transit-oriented areas. The city has long pressed the government to ease relocation loan restrictions, lift limits on the transfer of union membership status, revive private rental housing supply, and reform the tax system for single-home owners and long-term holders. For now, however, the city believes the government is unlikely to embrace those proposals.

"The government is strongly committed to public-led supply and appears to be moving toward exempting only final-payment loans from household lending caps — a significant gap from our position," a Seoul city official said. "As was evident at the real estate grand public forum, there are also differences over how much supply redevelopment projects can actually deliver."

Multi-family homes seen from Namsan in Seoul. [Herald DB]
Multi-family homes seen from Namsan in Seoul. [Herald DB]

At a public forum on real estate policy Thursday, President Lee said of the supply effect from redevelopment projects: "In the case of reconstruction, the number of units sometimes increases, but even then it does not seem to increase by a great deal."

On redevelopment, he added: "Living conditions improve and higher-quality housing is supplied, but a significant number of existing residents have to leave, so in densely populated areas the total number of households can actually decrease."

With the government preparing a comprehensive real estate package, the city plans to submit a second report to Cheong Wa Dae ahead of its release, laying out the case for revitalizing redevelopment projects.

The move follows a request from President Lee, who at a Cabinet meeting asked Oh to "add to the report a detailed account of the specific causes and current state of why supply is falling so short," after noting that "Seoul's housing supply is being criticized as severely insufficient."

The city intends to include in the report the mass cancellation of roughly 390 redevelopment zones carried out under former Mayor Park as a key cause of the current supply delays. Through what amounts to a "10-year white paper on redevelopment," the city aims to lay out its case for expanding supply and press the government once more to shift its position.

The city is also weighing whether to submit the report directly to Cheong Wa Dae or hand it over during the meeting with Kim. "The large-scale rollback of redevelopment projects in the past — during Mayor Park's tenure — has had a delayed effect that is now showing up as the current supply shortage," a city official said. "We plan to present concrete evidence and discuss the policy direction further with the government."


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