The Issue of "Hangang View" Rental Apartments and the Protection of Property Rights

People are saying, “This has gone too far—far too far.” The outcry concerns one of the hottest issues in South Korea today: real estate. The reason for this reaction is that the Seoul Metropolitan Government has recently been pressuring major riverside redevelopment complexes—such as Jamsil Jugong Complex 5, Yeouido Gongjak Apartments, and Ichon Hangang Mansion—to “arrange rental apartments so that they, too, can have a view of the Han River.” It is only natural that criticism has followed, with many arguing that this represents an excessive infringement on citizens’ property rights. Alongside this, there are reports that some redevelopment projects are considering abandoning or delaying reconstruction altogether. If that happens, concerns are growing that Seoul’s already severe housing supply imbalance will worsen further, inevitably driving existing home prices sharply higher.

The rationale behind forcing rental apartments to have Han River views is the so-called “social mix” policy. This policy—also referred to as “social integration” or “class mixing”—rests on the idea that if wealthier and less affluent people live together in the same neighborhood or apartment complex, they will interact more, develop greater mutual understanding, reduce class conflict, and ultimately achieve social integration. The assumption is that physical and spatial mixing will naturally lead to qualitative and social “chemical reactions.” But does forcing people into the same physical space actually generate such qualitative or emotional responses? And if it does, will those responses promote harmony and integration between social classes—or will they instead exacerbate tensions?

Experience from apartment complexes where this policy has already been implemented suggests that the results have been very different from what policymakers anticipated. Developers initially responded by creating separate buildings for rental units, or by dividing rental and for-sale units into different zones with separate entrances. In response, regulations were tightened to require rental and for-sale units to be mixed not only within the same complex, but even within the same building. That, in turn, led to yet other forms of separation—such as placing rental units primarily on lower floors or installing separate elevators for rental residents and owners. The current controversy over the “rooftop-on-rooftop” requirement is unlikely to be any different. Abandoning or delaying reconstruction and simply waiting it out has also become a viable option. As psychologists have found, people tend to be more sensitive to pain than pleasure, and to losses than to gains.

What is particularly striking in this controversy is the response from the Seoul city government. When members of the affected apartment associations voiced dissatisfaction with the requirement to place rental units in Han River view locations, the city responded that it could not understand the complaints, because this requirement was merely the “price” paid in exchange for the “privilege” of relaxed floor-area ratio (FAR) regulations. In other words, the city claims it granted a special benefit and is simply asking for compensation in return—so why complain? But is that really a privilege? In the first place, FAR regulations themselves are an infringement on citizens’ property rights. To be sure, such regulations have been justified on grounds of ensuring safety and livability, securing green spaces, and promoting balanced urban development. Whatever the justification, however, returning part of a right that was previously taken away is hardly a “special favor.” Yet bureaucrats describe this as granting a privilege. Citizens are not receiving a privilege; they are merely getting back something that was taken from them.

Moreover, if this truly is a privilege, why does the government (or the Seoul city government) grant it selectively, and only to certain apartment complexes? Claiming that FAR relaxation is a special benefit amounts either to admitting that the rationale for current FAR restrictions is weak, or at least to conceding that even with such relaxation, the intended effects of FAR regulation would not be seriously undermined. If that is the case, then instead of selectively granting favors and demanding compensation in return, the more appropriate approach would be to ease regulations across the board. Broad, uniform deregulation—rather than selective privileges—would also help prevent politicians and bureaucrats from abusing regulations for their own private interests. In that sense, this controversy unintentionally raises the need for a fundamental reexamination of FAR regulations themselves.

The forced placement of rental apartments with Han River views, justified in the name of reducing class conflict and promoting social integration, should be withdrawn. It is unlikely to achieve its intended effects and carries a high risk of worsening housing supply imbalances. As Jason Brennan notes, “A government that acts with the intention of producing certain outcomes does not thereby ensure that those outcomes will occur; more often, it actually prevents them from occurring” (Liberalism: 105 Questions You Should Ask). This observation applies not only to the present controversy, but to most government policies.

Kwon Hyuk-cheol
Director, Free Market Research Institute / Economist

Korean version: https://www.cfe.org/20250613_27801