How Will the New 390% Maximum Floor Area Ratio Impact South Korea’s Housing Market?

The National Assembly’s main chamber [Photo by Kwak Young-rae]

A bill aimed at boosting public urban renewal projects has cleared a key hurdle in the National Assembly. All eyes are now on whether this will accelerate legislation related to housing supply.

On the 10th, the Land, Infrastructure, and Transport Committee approved an amendment to the Urban and Residential Environment Improvement Act. The revision allows public entities like the Korea Land and Housing Corporation (LH) to apply a floor area ratio up to 1.3 times the legal limit for redevelopment and reconstruction projects. This legislation is part of the government’s follow-up to its housing supply initiative announced last September.

Under current regulations, the maximum floor area ratio for public redevelopment projects is 360%, which is 1.2 times the legal limit for general residential areas. For public reconstruction, it’s capped at 300%, or 1.0 times the limit. If enacted, the amendment would allow both public redevelopment and reconstruction projects to reach a maximum of 390%.

The committee, however, excluded private redevelopment projects from the amendment’s scope. In the same session, they also passed an amendment to the Real Estate Transaction Reporting Act, expanding the Land Minister’s authority to designate areas requiring permission for land transactions. This change grants the power to designate single local government jurisdictions, including Seoul.