5. Seoul Experience on Slum Upgrading
<Slum Upgrading Module 5>
Slum upgrading in the 1970’s. There is some change from the 1960’s. So the basic idea is self-help with land transport and supply of public infrastructure. So the Substandard Housing Redevelopment Act was enabled by the government to designate the slum area as “Substandard Housing Redevelopment District”, or SHRD.
Once a slum is designated as a SHR district, the public ownership of land is to be transferred to the slum dwellers at far below the market price. Seoul first designated about 200 SHR districts totaling at a 1,472 ha in 1972. In this case the dwellers are now the legal owners of their property.
The slum dwellers were supposed to rebuild their houses while the city government provided public facilities such as roads and utilities. The basic idea was that the dwellers would build the house while the public, especially the government, would build the infrastructure and transfer public land to the slum dwellers.
But the problem was that this approach suffered from insufficient developmental finance. Despite the additional aids including tax exemption, building material subsidies and architectural design service, the slum dwellers were too poor to build their own houses and to find a temporary housing during the construction period.
This approach did not yield active redevelopment. Only four districts were at work in 1974, followed by three in 1975. Although the government designated about 200 sites, only the seven districts were in act by 1975. To fill the financial gap, the government borrowed 5 million dollars from the USAID to provide construction loans to dwellers and help improve public capital.
But between 1976 and 1981, only ten districts accepted this loan for housing refurbishment. One of the reasons is because this is a loan from the developed world, the developed world required a high standard compared to living and financial conditions in Seoul so it was difficult to accept and implement all the requirements.
And there was another type of high-density redevelopment. Which meant that for this, the SHR needed a property owner’s association and construction firm to implement this large-scale joint development. So before, the main idea was for the dwellers to build the house and the government to provide the public services.
But because of the limited financial resources it was not feasible at the time. So the government tried to invite the private company, or a private party, into redevelopment. The basic idea was to demolish the existing buildings and the small lots were to be assembled into a thousand square meter plot, on which to build 3-5 story walk-up apartments, which means that there are no elevators.
This concept was applied only to 9 districts because while the idea is great, the problem of the financial gap still existed. And this concept was not well received by the residents because they could not afford the project costs. In a private joint development, the owners’ group and the private provider had to cover all costs for redevelopment.