Mechanisms for securing public interest in urban redevelopment projects implemented by landowners

Urban redevelopment projects have distinct characteristics that differentiate them from residential redevelopment projects. Owing to the complex factors related to the project implementer and its functions, controversies regarding their constitutionality have been raised. The core issue is whether the public necessity of these projects, especially when landowners directly implement them and exercise the right of eminent domain, aligns with the constitutional principle of guaranteeing property rights. A 2011 Constitutional Court decision ruled that implementation by landowners without forming a cooperative is constitutional. However, this ruling was based on the small-scale nature of such projects, the existence of supervisory systems, and loss compensation, necessitating a re-examination of modern, developer-led project types. The type of project implementer serves as a major criterion for determining the public interest. When all landowners within a redevelopment district jointly implement a project, the high level of public interest in revitalizing the local economy makes it less likely to be deemed unconstitutional. However, when a few large landowners or external developers lead a project, there is a significant concern that the pursuit of private interests could weaken its public nature. The Urban Improvement Act addresses this issue by using the consent rate requirement. Securing project implementation approval requires the consent of at least three-quarters of the landowners and the owners of at least one-half of the land area, regardless of the implementer's form. This secures the public interest, which forms the basis for granting the right of eminent domain. Furthermore, this approval is deemed as project authorization under the land compensation law, officially confirming the project's public nature. Functionally, urban redevelopment is a rearrangement project that restores deteriorated urban functions and revitalizes commercial districts by removing old buildings. This gives such projects a public interest that distinguishes them from private construction projects. Moreover, given the concentration of commercial and business functions in downtown areas, constructing buildings for these purposes can align with the public interest. However, the designation of a redevelopment district, a prerequisite for such a project, also restricts the property rights of small parcel owners by creating the potential effect of expropriation. Under a developer-led structure, these owners are often excluded from participation and face pressure to sell their land. However, effective legal means to challenge the district's designation are lacking, owing to the expiration of filing periods for cancellation lawsuits and the difficulty of proof in nullification lawsuits. In conclusion, urban redevelopment projects secure constitutional legitimacy by exercising the right of eminent domain through consent rate requirements and their inherent nature. However, the inadequate protection of small parcel owners' rights in developer-led projects dilutes the public interest, highlighting the need for institutional improvements such as guaranteeing their participation and strengthening public contributions.