To address housing shortages and stabilize housing prices in the Seoul metropolitan area, the government has focused on supplying large apartment complexes by developing major new towns and large-scale suburban housing sites. While this approach enables high-volume housing supply, it requires long lead times before occupancy, and residents face the challenge of relocating far from their existing communities. At the same time, many national and local government office buildings constructed during periods of rapid population growth and rising demand for administrative services are reaching the end of their useful life and require redevelopment. Public office buildings built in the 1980s and 1990s are typically located in favorable urban areas but were constructed at relatively low densities. Redeveloping these aging buildings as mixed-use complexes offers significant opportunities to increase housing supply within urban centers, enhance the value of national and public land, reduce fiscal burdens through private-sector participation, and promote economic revitalization. This section reviews relevant policy discussions and cases in Korea and abroad and proposes a strategy for supplying urban housing through mixed-use redevelopment of aging public office buildings as a policy direction for the new administration.

Status of Aging Public Office Buildings and Public Facilities

- One in Four Public Buildings Is Over 30 Years Old

As of 2020, 49.1% of government and local public buildings had been completed at least 20 years earlier, accounting for 40.7% of total gross floor area. Buildings more than 30 years old accounted for 26.5% by building count and 15.3% by floor area. By 2030, one in four public buildings is expected to exceed the standard 40-year service life for reinforced concrete structures. Accordingly, a systematic plan is needed to manage aging public office buildings, including extending building life through remodeling and prioritizing redevelopment where necessary. However, for central government buildings, limited funding in the National Property Management Fund makes it difficult to redevelop multiple aging buildings simultaneously. Local governments face similar constraints. Many public buildings, including office buildings, were constructed rapidly during the 1980s to meet growing administrative needs, resulting in a large share of aging facilities. Yet due to declining populations and fiscal constraints, local governments have difficulty pursuing timely redevelopment.

Low Development Density and High Potential for Mixed-Use Redevelopment

An analysis of major national office buildings such as regional labor offices, Statistics Korea buildings, and election commission buildings shows that these facilities have been developed at very low density. Their average floor area ratio (FAR) utilization rate is only 21.4%. In terms of location, 78% of these buildings are situated in zones where the allowable FAR is at least 200%, and 51% are located in residential zones (excluding Type 1 General Residential Zones). This indicates substantial redevelopment capacity. Redeveloping aging national office buildings could maintain existing office functions while using unused FAR to incorporate residential units and other community functions. A similar analysis of local government office buildings shows that the average FAR utilization rate is approximately 43% nationwide. Many aging facilities could be redeveloped at nearly twice their current scale, confirming that significant redevelopment potential exists for mixed-use projects.

Relevant Laws and Policies on Mixed-Use Redevelopment of Aging Public Office Buildings

- Legal Framework for Redevelopment

There is currently no single law dedicated to mixed-use redevelopment of public office buildings. However, most mixed-use redevelopment projects involving public buildings have been implemented through the delegated development system. Delegated development is regulated under the State Property Act and the Public Property and Commodity Management Act. To pursue delegated development, national or local governments must first convert administrative property into general property. They then delegate development and operation to a public institution such as Korea Asset Management Corporation, Korea Land and Housing Corporation, or a local public corporation. Under this approach, the developer finances the project and recovers development and management costs through fees over a period of up to 30 years. The advantage for the government is that it does not bear upfront development costs. In addition to delegated development, mixed-use development of national property is permitted through private participation under Article 59-2 of the State Property Act. This mechanism allows national ministries and private entities to establish project companies and develop unused general property that has not been utilized for at least five years. However, since the introduction of this system, no projects have yet been implemented.

With the growing discussion on using redevelopment of aging government office buildings to supply public housing, the Special Act on Public Housing now includes relevant provisions. Mixed-use redevelopment that incorporates public rental housing by utilizing additional FAR is generally pursued under Article 40-2 of the Special Act on Public Housing, together with relevant provisions of the State Property Act and the Public Property and Commodity Management Act, with delegated development continuing to serve as the primary implementation mechanism.

- Mixed-Use Redevelopment Projects for Aging Public Office Buildings

A representative policy initiative is the “Pilot Projects for Mixed-Use Redevelopment of Aging Public Office Buildings,” announced in September 2017 (Ministry of Economy and Finance, 2017). The goal was to redevelop outdated office buildings in major urban areas into mixed-use complexes that include government offices, youth rental housing, and public facilities. The Ministry of Economy and Finance and the Ministry of Land, Infrastructure and Transport jointly evaluated redevelopment needs, additional developable floor area, traffic conditions, and potential pilot impacts before selecting nineteen sites nationwide (eight national sites and eleven local government sites). In December 2017, the Ministry of Land, Infrastructure and Transport selected an additional 23 sites through a nationwide call for proposals (Ministry of Land, Infrastructure and Transport, 2017). Projects are implemented through delegated development by Korea Land and Housing Corporation or local public corporations such as Seoul Housing and Communities Corporation and Jeju Development Corporation. Construction of rental housing is financed by government budgets and the Housing and Urban Fund, while construction of office buildings is funded primarily through revenue from commercial components. Any remaining shortfall is covered by the local government, with long-term installment payments allowed. Development scale can also be expanded up to the maximum allowable building coverage ratio and FAR.

Mixed-use redevelopment of aging public office buildings was revisited in the Dynamic Economy Roadmap, announced in July 2024. In response to the increasing number of aging public buildings, the government announced a plan to supply up to 50,000 urban rental housing units by 2035 through mixed-use redevelopment projects that provide both office building renewal and large-scale youth rental housing (Joint Ministries, 2024). The implementation approach includes establishing a government-wide management framework for aging public buildings, conducting a full national survey, and introducing a mandatory preliminary assessment of whether public rental housing and other public-interest facilities can be integrated when remodeling public buildings. Compared with the policy framework announced in 2017, the 2024 roadmap reflects a stronger and more systematic implementation strategy.

Case Studies of Mixed-Use Redevelopment Combining Public Office Building Reconstruction and Residential Development

- Oryu 1-dong Community Center Redevelopment (Guro-gu, Seoul): Community Center + Public Rental Housing

The Oryu 1-dong Community Center project is the first mixed-use redevelopment project involving an aging public office building in Korea. The project was designated as a pilot site in September 2017 and was completed in December 2020. As the community center built in 1981 deteriorated, Guro-gu began planning for rebuilding and adopted a mixed-use approach through delegated development. Guro-gu approved free use of the site, and the Ministry of Land, Infrastructure and Transport supported construction costs for public rental housing through the Housing and Urban Fund. SH Corporation, the delegated developer, constructed the building and transferred ownership to Guro-gu. With a construction cost of approximately KRW 22 billion, the new building includes neighborhood commercial facilities on the first floor, community and public facilities on floors 2 to 5, and 180 units of Happy Homes on floors 6 to 18.

- Dongnam-gu Office Redevelopment (Cheonan-si, Chungcheongnam-do): District Office + Dormitory + Private Housing

The Dongnam-gu Office Redevelopment Project redeveloped the former Dongnam-gu office site, originally built in 1932, into a mixed-use complex incorporating public, commercial, residential, and cultural facilities. It is also recognized as an early case of public office building redevelopment through public–private cooperation. Designated as a leading urban regeneration area in 2014, the project began construction in 2016 and was completed in 2021. With a total project cost of approximately KRW 250 billion, a Real Estate Investment Trust (REIT) was established with funding from the Housing and Urban Fund, Cheonan City, and private capital. The development covers a total site area of 19,833 square meters and a gross floor area of 119,050 square meters. The administrative complex town includes a new district office building, a children's center, and a Happy Dormitory with 299 units, along with 451 units of mixed-use housing.

- Jingumae 1-Chome Urban Regeneration Project (Tokyo, Japan): Police Station + Private Condominiums (Land-Lease Structure)

The Jingumae 1-Chome Urban Regeneration Project was implemented to relocate and reconstruct the aging Harajuku Police Station while revitalizing the surrounding area by developing commercial and residential private facilities on the remaining land. The total project scale is 84,974 ㎡of gross floor area, consisting of 26,791 ㎡ of police facilities, 10,560 ㎡ of commercial facilities, and 47,623 ㎡ of residential facilities (385 units). The project uses the PFI (BTO) model. For the police facility, the Tokyo Metropolitan Government pays 95% of design and construction costs according to project progress until ownership transfer, with the remaining balance paid in equal installments over 15 years. Commercial and residential facilities built on the surplus land are treated as ancillary components of the PFI project. They are leased to private operators through a long-term fixed land lease and operated as independent profit-generating entities.

- Toshima Ward Office Redevelopment Project (Tokyo, Japan): Ward Office + Private Condominiums (Redevelopment Model)

Toshima Ward sought to redevelop its 1961 ward office building, which had significantly aged, while minimizing fiscal burden and expanding residential, cultural, and commercial facilities required by the community. The solution was a combined scheme involving long-term private lease of the former ward office site and redevelopment of the relocated elementary school site. The former ward office site was leased to a private developer under a long-term fixed land lease of approximately 70 years. The site was developed with private facilities such as offices, cinemas, and public facilities including a conference hall. The elementary school relocation site was redeveloped to construct the new ward office building (first floor and floors 3 to 9), commercial facilities (floors 1 to 2), and private condominiums on the upper floors (floors 11 to 49, totaling 432 units). Construction of the new ward office was financed through partial premium revenue from the long-term lease of the original site and proceeds from the sale of the private condominiums. This project became the first case in Japan where a local government built a new office building without allocating any general budget and the first case that combined a public office building with private condominiums.

Policy Directions for Activating Urban Housing Supply Through Mixed-Use Redevelopment of Aging Public Office Buildings

- Developing Diverse Mixed-Use Redevelopment Models That Reflect Local Conditions

Until now, mixed-use redevelopment of aging public office buildings has primarily relied on delegated development, combining office reconstruction with public rental housing. This approach has the advantage of reducing the fiscal burden on national and local governments because delegated developers fund office construction and public rental housing receives support from the Housing and Urban Fund. However, redevelopment conditions differ across locations, and priority facility needs vary by district. A broader range of project models is therefore required. Beyond delegated development and small household-oriented public rental housing, cases such as the Dongnam-gu Office Redevelopment Project (which used REIT-based urban regeneration) and Japanese cases that combine private investment, redevelopment, and long-term land leases demonstrate the need for new business models. Policy, administrative, and financial support mechanisms should be aligned with these varied models.

- Encouraging Active Private-Sector Participation

Although aging public office buildings sit on national or public land, and delegated development allows participation by entities such as Korea Asset Management Corporation, the national or local government remains the principal decision-maker and bears all responsibility. Even if neighborhood commercial facilities are included, private entities participate only as tenants through post-completion bidding. The entire process from planning to completion stays within the public sector. Many countries such as the United States, Japan, and nations in Europe encourage active private-sector involvement in public-building redevelopment not merely to reduce costs but to incorporate private-sector creativity and expertise. While Korea has legal frameworks that allow private participation under the State Property Act and the Act on Public-Private Partnerships in Infrastructure, private involvement is rarely pursued in practice. To achieve successful mixed-use redevelopment that contributes to local revitalization, it is essential to proactively include creative private partners or social economy organizations, as well as private developers with diverse housing development experience. Policies must be designed to facilitate their participation and strengthen collaboration structures.

- Establishing a Legal Basis for Efficient Management and Active Development of Aging Public Office Buildings and National–Public Property

Although 42 sites were designated for mixed-use redevelopment of aging public office buildings in the 2017 policy announcement, only about three have been completed to date. Some projects may have stalled due to changes in national or local policy conditions or due to community opposition. However, given that eight years have passed since the policy was announced, the limited progress made so far does not align with the stated policy objective of rapidly supplying urban housing through redevelopment of aging public office buildings. Because public office buildings are administrative assets that serve governmental functions on national or public land, redevelopment requires careful deliberation. Nevertheless, if unreasonable regulations or overly complex procedures impede project implementation, these obstacles must be addressed through bold institutional reform. The number of aging public office buildings is expected to increase rapidly, while national and local fiscal capacity is likely to become even more constrained. It is therefore necessary to establish a legal foundation that enables more efficient and proactive utilization of idle national and public property, as well as integrated asset management strategies for aging office buildings. Institutional reforms must move beyond the current State Property Act, Public Property and Commodity Management Act, and Special Act on Public Housing. During the 21st National Assembly, proposed amendments to the State Property Act aimed at expanding private-sector participation in national land development and a draft “Special Act on Public Architecture” that included provisions for mixed-use redevelopment and systematic asset management were introduced. However, both bills failed to advance beyond committee review and were automatically discarded at the end of the legislative session.

- Establishing and Operating a Project Delivery Organization with Clear Authority and Responsibility

To achieve visible and early results in supplying urban housing through mixed-use redevelopment of aging public office buildings, a dedicated project delivery organization with clear and strong authority is essential. During the Moon administration, the establishment of the “Living SOC Promotion Team” under the Office for Government Policy Coordination is a valuable precedent. The team coordinated inter-ministerial support systems and consolidated budget planning for Living SOC facilities, achieving significant results in a short period. The Dynamic Economy Roadmap also proposed forming a consultative body for mixed-use redevelopment of aging public office buildings, involving the Ministry of Land, Infrastructure and Transport, Ministry of Economy and Finance, Ministry of the Interior and Safety, Seoul Metropolitan Government, Gyeonggi Province, LH, SH, Korea Asset Management Corporation, and Korea Advancing Schools Foundation. However, a project organization must do more than identify candidate sites and monitor implementation. It must oversee unified budgeting and expenditure, resolve regulatory and administrative barriers, and mediate among stakeholders. Given these expanded responsibilities, establishing an independent dedicated organization, rather than relying solely on a consultative body, would be the more effective approach.

1) The analysis covered 37 local labor office buildings, 38 Statistics Korea office buildings, and 174 National Election Commission office buildings for which relevant information (such as site area and total floor area) was available (based on data from the Building Administration Information System as of the end of 2016).

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