S. Korea Unveils ₩600 Billion Fund to Accelerate Aging City Redevelopment

South Korea to Inject ₩600 Billion into Aging City Redevelopment

The Ministry of Land, Infrastructure and Transport (MOLIT) announced on May 8, 2026, the launch of a new initiative to accelerate the redevelopment of South Korea’s aging planned cities. The government will provide initial funding at low-interest rates through the "Future City Fund" (미래도시펀드), aiming to revitalize older urban areas and enhance living conditions.

This strategic move primarily targets what are known as first-generation new towns, such as Bundang, Ilsan, Pyeongchon, Sanbon, and Jungdong. These major residential areas were largely developed in the late 1980s and early 1990s to alleviate housing shortages in and around Seoul. After several decades, many of these areas now face issues like deteriorating infrastructure and aging buildings, making urban regeneration a pressing national concern.

The first iteration of the Future City Fund is capitalized at ₩600 billion (approximately $440 million USD). This substantial fund is designed to provide crucial early-stage financing for redevelopment projects, which often require significant capital upfront. Supported by guarantees from the Housing & Urban Guarantee Corporation (HUG), projects can secure loans at competitive interest rates, typically in the 3% range, making revitalization efforts more financially viable for residents and developers.

Beyond direct financial support, MOLIT is also pursuing comprehensive institutional improvements to streamline and expedite the overall redevelopment process. These policy enhancements are aimed at removing regulatory bottlenecks, simplifying administrative procedures, and fostering a more efficient environment for urban regeneration. The goal is to ensure that essential renovation projects can proceed more quickly and effectively, preventing further delays.

By combining low-interest funding with a commitment to institutional reform, the government seeks to jumpstart follow-up projects in these aging urban centers. This initiative is expected to not only improve the quality of life for residents but also contribute to sustainable urban development, transforming outdated infrastructure into modern, vibrant communities for the future.

Source: 국토교통부 — Original Article (Korean)