A Return Analysis on the Released Areas of the Redevelopment Projects in Seoul

Abstract

Newtown and Redevelopment projects, which were popular in the 2000s have caused various conflicts among different social and economic interest groups due to the prolonged recession in the real estate market. Accordingly, the Seoul government implemented an exit strategy for the maintenance project in 2012 to release the maintenance area and implemented a new paradigm-based urban regenration policy. However, the exit strategy for the maintenance project caused other problems; since 2013, housing prices in Seoul have been on the rise, which led to the recent market pressure on the resumption of the maintenace project. The current study confirmed that the resumption of the maintenance project would be possible if an approximately 10% return was expected from the perspective of the union members in the maintenance project areas. A return rate analysis on the six areas that were released as a part of the exit strategy showed that the maintenance project for all areas could be resumed in the private sector, exceeding 10% of the preliminary required return.