Government legislation ministry sets compensation timing for urban renewal projects

The government legislation ministry said May 19 that businesses qualifying for loss compensation during urban redevelopment projects under special revitalization laws must be identified based on the public notice period for the revitalization plan. The ruling addresses an inquiry regarding how local authorities calculate eligibility dates for merchants forced to close or suspend operations due to construction.

Under the Urban Regeneration Acceleration Act, local governments often implement redevelopment projects defined by the Framework Act on Urban and Residential Environment Improvement. While the latter law specifies that compensation eligibility begins on the date of public notice for the improvement plan, revitalization projects do not create separate improvement plans. The ministry determined that the relevant date is the public notice period for establishing the urban revitalization plan mandated under Article 9 of the acceleration act.

The interpretation follows a citizen inquiry asking whether the eligibility date should instead be tied to the earlier public notice for designating the revitalization zone under Article 4 of the same act. The ministry rejected this, noting that while the Acceleration Act defers to the Framework Act for compensation matters, the specific procedural step of public notice for the revitalization plan under Article 9 serves as the functional equivalent to the standard improvement plan notice.

The agency explained that because no separate improvement plan is drafted in these cases, the public notice required before establishing the revitalization plan becomes the marker for when business losses are recognized. The agency recommended amending the Urban Regeneration Acceleration Act to clearly stipulate the recognition point for business loss compensation beneficiaries.