Displacement of residents and traditional industries used to be an integral part of neighbourhood improvement in Seoul. While direct displacement has recently declined, new forms of indirect displacement are emerging as a result of the residents’ feelings of powerlessness, emotional distress and alienation, caused by the ongoing neighbourhood transformation in the city.

Introduction

Displacement has long been an integral part of urban development in South Korea (hereafter Korea). Since the 1970s, low-income tenants, who were once the majority in deprived neighbourhoods, have faced evictions to make way for the arrival of the affluent middle class.¹ Property-led urban redevelopment and massive state-facilitated displacement have been instrumental to rapid economic and urban growth, and have become a defining feature of urban development in Korea.² This is particularly evident in Seoul, which is not only the centre of economic, social and political life, but also the most important property market in Korea.

Several studies have examined property-led urban redevelopment and its impact on displacement and everyday life in Seoul. The shift from urban redevelopment toward state-led urban regeneration has also received considerable scholarly attention. However, these studies tend to focus on the direct displacement of residents. While the extent of direct displacement has decreased, new forms of indirect displacement are emerging in Seoul that have yet to be discussed.

This article aims to provide a more comprehensive understanding of displacement in Seoul by exploring neighbourhood improvement in the traditional industrial clusters of Sangwangsimni and Changsin-Sungin. The selected cases allow to compare different approaches to neighbourhood improvement, their impact on displacement, and the role of the state in facilitating displacement in Seoul.

“Property-led urban redevelopment and massive state-facilitated displacement have been instrumental to rapid economic and urban growth, and have become a defining feature of urban development in Korea.”

Neighbourhood improvement and state-facilitated displacement in Korea

Korea experienced rapid economic and urban growth, leading to massive migration from rural areas to urban centres. In Seoul, the population quadrupled between 1960 and 1980, resulting in a massive housing shortage and the growth of illegal settlements. In response, the state demolished the latter, displaced their residents, and attempted to provide public housing, albeit with mixed success due to limited spending.³

In the late 1970s, the state began to attract private investment in housing provision. Property-led urban redevelopment became a major instrument for absorbing surplus capital from industrial production into property markets and housing, as the state sought to address the housing shortage.⁴ In collusion between the construction industry, developers, property owners, and the state, illegal settlements of the urban poor were bulldozed and replaced with high-rise housing for the emerging middle class. As a result, it was estimated that around 10% of Seoul’s population was displaced during the 1980s.⁵

Despite the destructive consequences for the urban poor, the state has facilitated massive displacement, legitimising it as an inevitable outcome of modernisation.⁶ In the 2000s, the state further deregulated urban redevelopment, extending it from deprived to middle-class neighbourhoods. At the same time, it promised to curb speculation and minimise displacement by engaging residents in decision-making. In practice, however, little has changed and the state has continued to facilitate displacement.⁷

As a more inclusive approach to neighbourhood improvement, the state introduced urban regeneration in the 2010s, focusing on the comprehensive improvement of deprived neighbourhoods and aiming to restore, rather than displace, the neighbourhood community.⁸ Although the new approach has been successful in reducing direct displacement, state-led urban regeneration has reportedly contributed to indirect displacement by increasing displacement pressures and a sense of powerlessness and alienation among residents.⁹

Traditional industrial clusters and neighbourhood improvement in Seoul

Industrial clustering is the result of specialisation and flexibilisation, where complementary industries with suppliers and services form geographically proximate groups of interconnected businesses.¹⁰ In Seoul, traditional industrial clusters date back to the early industrialisation and typically consist of small, family-run workshops with labour-intensive and outdated technologies. These traditional industries maintained their competitiveness through specialisation and collaboration, often based on informal networks of trust.¹¹

Traditional industrial clusters began to experience economic and social decline after the 1980s. At the same time, former peripheral industrial cluster have become prime locations in the city. Their decay, undervalued land and good accessibility have made traditional industrial clusters a major focus of property-led urban redevelopment, which has sought to turn them into profitable housing and offices. This has led to their demolition, the displacement of residents and traditional industries, and the destruction of informal networks.¹²

In the 2000s, the growth of cultural industries and tourism in Seoul, together with heritage activism, challenged the perception of traditional industrial clusters as unsightly and obsolete. Instead, they came to be seen as economic, historical, and cultural assets. This has influenced approaches to neighbourhood improvement of traditional industrial clusters, with the state promoting their preservation rather than demolition.¹³

Transformation of traditional industrial clusters of Sangwangsimni and Changsin-Sungin

The transformation of the traditional industrial clusters of Sangwangsimni and Changsin-Sungin exemplifies the shift from property-led urban redevelopment to state-led urban regeneration.

“The transformation of the traditional industrial clusters of Sangwangsimni and Changsin-Sungin exemplifies the shift from property-led urban redevelopment to state-led urban regeneration.”

Sangwangsimni was an agricultural village in the past. By the 1980s, it had become a major industrial cluster for metal parts, moulds, and machinery. Changsin-Sungin used to be a shanty town. Due to the expansion of the nearby Dongdaemun Fashion Market, many garment workshops have concentrated in the neighbourhood since the 1970s. However, both industrial clusters experienced social and economic decline in the 1990s, prompting the state to designate Sangwangsimni and Changsin-Sungin for neighbourhood improvement.¹⁴

Sangwangsimni was selected for New Town Development in 2002. The property-led urban redevelopment was based on the wholesale demolition of the neighbourhood to make way for new high-rise housing and offices, favouring the interests of developers and speculative property owners over tenants and traditional industries.¹⁵ Construction began in 2007 and new residents began moving in in 2014. Finally, Wangsimni New Town was completed in 2017, 15 years after its introduction.

Changsin-Sungin was also designated for New Town Development in 2007. However, due to conflicts between property owners, the urban redevelopment was cancelled and replaced in 2014 with a more inclusive state-led urban regeneration, which aimed to improve the neighbourhood by involving residents and traditional industries in planning and decision-making. Urban regeneration in Changsin-Sungin was completed in 2018.¹⁶

Property-led urban redevelopment and direct displacement in Sangwangsimni

Property-led urban redevelopment in Sangwangsimni provided new housing and social amenities, improved the living environment, and revived the property market. Property owners and developers dominated decision-making, while the state supported neighbourhood improvement through planning deregulation and investments in infrastructure. In contrast to Changsin-Sungin, the neighbourhood was demolished, leading to the direct displacement of residents and traditional industries, and destruction of the industrial cluster.

	1994	1999	2004	2009	2014	2019
Sangwangsimni	25.224	26.178	23.943	13.682	13.086	27.767
Changsin-Sungin	49.940	41.734	37.446	37.422	33.847	29.681

The two approaches to neighbourhood improvement had very different impacts on direct displacement. In Sangwangsimni, the population decreased by 45% between 2004 and 2014 due to the urban redevelopment, but increased by 112% between 2014 and 2019 after new residents moved to Wangsimni New Town (see Table 1). Due to inaccessible new housing, it was estimated that only about 15% of original residents were able to return after the neighbourhood improvement was completed. The majority of residents and traditional industries left the neighbourhood for good.¹⁷

In Changsin-Sungin, the neighbourhood improvement has not yet led to significant direct displacement, although the population declined by 10% between 2004 and 2014 and by 12% between 2014 and 2019 (see Table 1). However, residents in and around Changsin-Sungin are reportedly experiencing displacement pressure not because of evictions, but because of growing feelings of powerlessness, emotional distress, and alienation caused by the ongoing neighbourhood transformation after urban regeneration.¹⁸

State-led urban regeneration and indirect displacement in Changsin-Sungin

Urban regeneration in Changsin-Sungin aimed to restore the neighbourhood community and traditional industries. The state involved residents and businesses in planning and decision-making by organising workshops, building a community centre, establishing a support centre and supporting a community cooperative. The latter received funding to build community capacity after the urban regeneration was completed. However, the state exercised tight control over the funding, undermining the autonomy of the community cooperative and frustrating residents, who reported feelings of powerlessness as a result.¹⁹

These feelings were reinforced by residents’ perceptions that the neighbourhood was being taken over by what they saw as opportunistic businesses opening new shops, studios, cafes, restaurants and accommodation and profiting from the neighbourhood improvement. Although initially not widespread, a sense of alienation over the loss of the original habitat began to grow after 2022 as a result of the disconnect between residents and the new businesses coming into the neighbourhood.²⁰

Feelings of powerlessness, emotional distress and alienation are known to contribute to displacement pressure. In contrast to Sangwangsimni, the urban redevelopment in Changsin-Sungin has not resulted in the direct displacement of residents or traditional industries. However, the growing displacement pressure may contribute to indirect displacement, where residents become alienated by the ongoing transformation of the neighbourhood, even though they continue to live there.²¹

“In contrast to Sangwangsimni, urban regeneration in Changsin-Sungin has not led to direct displacement of residents or traditional industries. However, the growing displacement pressure may contribute to indirect displacement, where residents become alienated by the ongoing transformation of the neighbourhood although they continue living there.”

Conclusion: From neighbourhood improvement to neighbourhood resilience

The comparison of the traditional industrial clusters of Sangwangsimni and Changsin-Sungin shows that neighbourhood improvement in Seoul increases displacement pressure. This in turn leads to direct and indirect displacement of residents and traditional industries. While direct displacement has long been an integral part of property-led urban redevelopment in Seoul, indirect displacement has recently emerged as a result of state-led urban regeneration. In contrast to the destruction of the traditional industrial cluster in Sangwangsimni, the urban regeneration of Changsin-Sungin has to some extent preserved and revived traditional industries.

In this way, the state has prevented direct displacement, although the neighbourhood improvement has allowed it to keep the residents at arm’s length and to promote its own interests in Changsin-Sungin over those of the residents. As a result, residents increasingly feel a sense of powerlessness, emotional distress and alienation amidst the ongoing transformation of the neighbourhood.

Neighbourhood improvement and displacement appear to have a negative impact on neighbourhood resilience. Direct and indirect displacement limits access to resources that strengthen adaptive capacity and weakens informal networks that sustain neighbourhood community. However, our previous research on the displacement of the urban poor in Seoul shows that displacement pressure can also contribute to neighbourhood collective action and social innovation, which in turn strengthen neighbourhood resilience.²²

This requires extending the study of neighbourhood improvement and displacement, and focusing on neighbourhood collective action and social innovation to better understand neighbourhood resilience in Seoul and beyond.

“Neighbourhood improvement and displacement appear to have a negative impact on neighbourhood resilience in Seoul. Direct and indirect displacement limits access to resources that strengthen community adaptive capacity and weakens social and productive networks that help sustain neighbourhood community.”

* This article is based on a study on the gentrification of traditional industrial clusters in Seoul that first appeared in the journal The Developing Economies in 2024.

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