Seoul plans to introduce a transferable development rights (TDR) program in the second half of this year, allowing building owners to sell unused floor area ratios (FAR) when height restrictions or other regulations prevent full utilization of their legally permitted FAR. This system, similar to those in the U.S. and Japan, will help owners recover financial losses while enabling high-density development in receiving areas.
Cities like New York and Tokyo have reshaped their skylines using this system. One Vanderbilt in New York is a prime example. In Tokyo, six buildings near Tokyo Station, along with the station itself, leveraged FAR trading to enable high-rise development while preserving historical structures.
Urban competitiveness is now a key driver of national strength. Leading global cities are revitalizing outdated and inefficient downtown areas to attract international businesses and spur growth. Since enacting the Act on Special Measures Concerning Urban Reconstruction in 2002, Tokyo has aggressively reformed regulations, designated special zones, and promoted integrated infrastructure development. As a result, its ranking in the Global Power City Index has risen from fourth to third over the past decade.
Seoul is falling behind in urban competition due to outdated regulations. In the historic downtown area, commercial zones face an 800% FAR cap, and new building heights are restricted to 90 meters. There is even a rule requiring buildings within 100 meters of cultural properties to stay within a 27-degree angle from the property’s fence. Former Mayor Park Won-soon used these regulations to stall urban development, making it impossible for Seoul to compete with global cities.
With limited land available, Seoul has no choice but to grow through vertical development to maximize land use. To stabilize housing prices and boost urban competitiveness, the city must significantly ease inefficient regulations, including FAR and height limits, zoning restrictions, and over 20 review processes such as environmental and traffic impact assessments—allowing for high-density, mixed-use development in the city center.
