Land Ministry, Seoul city locked in housing 'ping-pong' over Yongsan Park

Gangnam's Tancheon Water Reclamation Center emerges as alternative amid Yongsan standoff

Land Ministry signals it will consider Tancheon only if Seoul also accepts Yongsan

Pre-sale vs. rental ratio seen as key variable ahead of third round of talks

Ministry of Land, Infrastructure and Transport Minister Kim Yun-deok (right) and Seoul Mayor Oh Se-hoon shake hands after meeting at a restaurant in Seoul on Wednesday to discuss housing supply plans, including the use of Yongsan Park. [Yonhap]

Seoul Mayor Oh Se-hoon and Ministry of Land, Infrastructure and Transport Minister Kim Yun-deok failed to narrow their differences over housing supply at Yongsan Park during a second round of talks Wednesday, as Gangnam's Tancheon Water Reclamation Center emerged as a potential middle ground. Seoul city said it would actively help secure alternative sites, including the Tancheon facility, if the central government dropped Yongsan Park from its list of housing candidates. The government pushed back, saying Seoul could not simply insist that Yongsan was off the table — it indicated it would consider the Tancheon site only if Seoul actively pursued youth housing on the former residential portions of Yongsan Park. The specific ratio of rental units for young people and newlyweds is now expected to be the pivotal variable in the negotiations.

Speaking on CBS Radio's "Park Sung-tae's News Show" Thursday morning, Kim said that if youth housing were built at sites such as Yongsan, it would need to be "universal public housing where middle-income earners can live," adding that such an approach would give people the sense that public housing is "a home for life." Kim also said eligibility criteria would need to be put to public debate to prevent the units from becoming what he called "lottery rentals."

The government has placed considerable weight on securing a large volume of public rental housing. The Lee Jae Myung administration has set a target of supplying more than 400,000 public rental and pre-sale units to young people and others by 2030, aiming to make public rental housing a universal option that extends beyond low-income welfare housing to encompass the middle class.

The Tancheon Water Reclamation Center site in Ilwon-dong, Gangnam-gu, seen Wednesday, after Seoul Mayor Oh Se-hoon proposed it as an alternative to Yongsan Park for housing supply. [Yonhap]

The government's Aug. 13 housing package also included plans to create high-quality "universal public rental housing" in prime locations where residents across income brackets could live long-term. The government named planned complexes in the third-generation new towns — 883 units at the S-10 block in Namyangju Wangseok, 793 units at the AC2-1 block in Incheon Gyeyang, and 364 units at a public mixed-use site in Hanam Gyosan — while noting that preferred locations in central Seoul would also be considered. The package notably included a plan for 11,000 "youth town" units combining specialized community spaces such as lounges, raising the possibility that large urban sites like the Tancheon Water Reclamation Center could be reviewed as candidates to realize that vision.

Half of all universal public rental units are to be allocated to young people without homes, with a standard tenancy of six years extendable to a maximum of 20 years depending on childbirth and the number of children. When asked Thursday whether all the planned youth housing units would be rental, Kim said discussions had not yet reached that point, adding that details such as the pre-sale-to-rental ratio would need to be worked out in consultation with Seoul city.

Ministry of Land, Infrastructure and Transport Minister Kim Yun-deok arrives at a restaurant in Seoul on Wednesday ahead of talks with Seoul Mayor Oh Se-hoon on housing supply plans, including the use of Yongsan Park. [Yonhap]

Industry observers broadly agree on the need to expand rental housing supply aimed at young people.

Park Hap-su, an adjunct professor at Konkuk University's Graduate School of Real Estate, said that given the severity of the youth housing shortage and South Korea's low public rental ratio, building rental housing complexes could not only boost supply but also revitalize commercial activity in surrounding areas. He added that Seoul city's commitment would be essential — particularly on how high a floor-area ratio to allow, since that figure is directly tied to the volume of units.

Song Seung-hyeon, chief executive of Urban and Economy, cautioned that because purchase prices for public rental housing are fixed, there are limits to how much construction quality can be improved. He recommended a flexible approach — for instance, offering differentiated floor-area ratios based on project viability even within central urban locations.

The rental unit ratio also surfaced as a key bargaining chip at Wednesday's second meeting. Mayor Oh said at a post-meeting briefing that he had heard from Kim that the government would consider easing the floor-area ratio for private redevelopment projects by 1.2 times, but that including a certain proportion of rental housing was a condition of any such agreement. Oh added that relaxing the floor-area ratio could increase net new supply by nearly 43,000 units, and that even without pre-sales, the volume of new housing would increase dramatically.

Oh and Kim are scheduled to hold a third round of talks next week to continue discussions on housing supply in Seoul. Kim said Thursday that the government was reviewing a plan to supply 73,000 units in Gyeonggi Province adjacent to Seoul, and that adding 30,000 to 40,000 units within Seoul itself could make a total supply of 100,000 units achievable. The next meeting is expected to take up greenbelt releases and development plans that could secure a large volume of public housing as an alternative to Yongsan Park.

hope@heraldcorp.com