State-facilitated Gentrification in Seoul, South Korea: For Whom, By Whom and With What Result?

Introduction

Gentrification—traditionally understood as the influx of wealthier residents into lower-income urban areas, leading to displacement—has been widely studied in Western contexts. However, this paper examines how gentrification operates differently in Seoul, South Korea, where the state is central in driving urban redevelopment. Unlike market-led gentrification seen in cities like New York or London, Seoul’s transformation is heavily state-facilitated, raising questions about who benefits, who drives the process, and what the consequences are for original residents.

Theoretical Framework: State-led vs. Market-led Gentrification

The study challenges the Western-centric view of gentrification as a purely market-driven phenomenon. Instead, it highlights how the South Korean government has actively promoted urban redevelopment through policies like New Town Projects and Urban Regeneration Programs. These initiatives, framed as efforts to modernize aging neighborhoods, often prioritize economic growth and real estate speculation over the needs of existing communities.

The paper draws on critical urban theory, particularly Neil Smith’s rent gap theory, but adapts it to account for the strong role of the state in creating and exploiting redevelopment opportunities. In Seoul, gentrification is not just about private investors capitalizing on undervalued land—it is a state-engineered process where government policies deliberately encourage displacement in the name of “urban improvement.”

Historical Context: Urban Development in Seoul

Seoul’s rapid urbanization began in the mid-20th century, with post-war reconstruction and industrialization leading to dense, informal settlements (daldongne). By the 1980s, the government initiated large-scale redevelopment projects to replace these low-income neighborhoods with high-rise apartments. These efforts accelerated in the 2000s with the New Town Projects, targeting areas like Gangnam for luxury development.

However, these projects often ignore the social costs. Low-income residents, many of whom were tenants rather than property owners, received little compensation and were pushed to the urban periphery. The paper argues that this was not an unintended side effect but a deliberate strategy—state policies systematically favored developers and affluent newcomers over long-term residents.

Case Studies: State-led Gentrification in Action

The study examines several neighborhoods to illustrate how state-facilitated gentrification unfolds:

1. Hongdae – Originally an artsy, bohemian district near Hongik University, Hongdae became a target for commercialization. City policies encouraged trendy cafes, clubs, and retail chains, driving up rents and pushing out artists and small businesses. The government’s branding of Hongdae as a “cultural hub” masked the displacement of its original creative community.
2. Itaewon – Once a multicultural, working-class area near a U.S. military base, Itaewon was rebranded as a globalized, upscale district. The city’s Special Tourism Zone policy attracted foreign investment and luxury developments, displacing long-standing migrant communities and small vendors.
3. Euljiro – A historic industrial area filled with small print shops and workshops, Euljiro faced pressure from the Seoul Station Urban Regeneration Project. While framed as preserving heritage, the policy actually incentivized landlords to replace traditional businesses with hipster cafes and co-working spaces, excluding older tenants.

These cases show that the state does not merely enable gentrification—it actively directs it through zoning laws, tax incentives, and public-private partnerships.

Key Actors: Who Drives and Benefits from Gentrification?

The paper identifies three main groups shaping Seoul’s gentrification:

1. The State (Central and Local Government) – Urban policies are designed to boost land values and attract investment. The government partners with private developers, offering subsidies and deregulation in exchange for economic growth. Politicians also benefit from the image of “modernizing” the city.
2. Real Estate Developers and Investors – Large construction firms (e.g., Hyundai E&C, Lotte) dominate redevelopment projects, securing massive profits from luxury housing and commercial spaces. Small landlords, meanwhile, often sell out under pressure from rising taxes and redevelopment fees.
3. New Middle-Class Residents – Affluent professionals and young creatives are drawn to gentrifying areas for their “authentic” vibe, unaware (or indifferent) to the displacement they contribute to.

The losers are the original residents—tenants, small business owners, and elderly homeowners—who lack the financial or legal power to resist eviction. Tenant protections are weak, and compensation schemes favor property owners over renters.

Consequences: Displacement, Cultural Erasure, and Inequality

The impacts of state-facilitated gentrification in Seoul are severe:

• Displacement – Low-income families are forced to relocate to cheaper, often less accessible areas, disrupting social networks and access to jobs.
• Loss of Cultural Identity – Neighborhoods lose their historical character as mom-and-pop shops, traditional markets, and art spaces are replaced by generic luxury developments.
• Increased Inequality – While property owners and developers profit, marginalized groups (elderly, migrants, small tenants) are excluded from the benefits of urban renewal.
• Social Resistance – Some communities have organized protests (e.g., the Yongsan Disaster protests in 2009), but state power and developer influence usually prevail.

Conclusion: A Model of State-led Gentrification

The paper concludes that Seoul exemplifies a distinct form of state-facilitated gentrification, where the government is not a neutral regulator but an active agent in reshaping urban space for capital accumulation. This model contrasts with Western cases where gentrification is more market-driven.

The study calls for greater scrutiny of urban policies that prioritize economic growth over social equity. Without stronger tenant protections and community participation, state-led redevelopment will continue to displace vulnerable populations while benefiting elites.

Final Thoughts

This research provides a crucial perspective on State-facilitated gentrification that operates outside Western contexts, emphasizing the state’s central role in Seoul’s urban transformation. It challenges policymakers to consider alternative approaches that balance development with social justice, ensuring that urban renewal does not come at the expense of the city’s most marginalized residents.

Also Read: The Role of Government in the Housing Market: The Experiences from Asia