The reason why the presidential office announced on the 19th that it would speed up the redevelopment project of the first phase of the metropolitan area is because the protests from the residents of the first phase of the new town have been stronger than expected since the announcement of the ‘August 16 Real Estate Measures’. The government has promised to promote the first new city redevelopment project at a speedy pace since the time of the Presidential Transition Committee, but the 8/16 measures said that it would only release a mid- to long-term development plan in 2024. In addition, Prime Minister Han Deok-soo said on a radio broadcast on the same day, “I think the public can understand the situation well,” regarding the controversy over the cancellation of the 1st new city renewal promise.
Politicians and the real estate industry point out that “real estate policies are so sensitive that we have no choice but to be prudent, but the government is being too conscious of short-term market changes and public opinion.”
○President’s office surprised by the protests from residents
In the August 16 measures, the government announced that it would prepare a mid- to long-term development plan (master plan) for the reorganization of the first new towns, such as Bundang, Ilsan, Pyeongchon, Sanbon, and Middle East, by 2024. This is more than a year later than the Presidential Transition Committee announced in May that “we will come up with a comprehensive development plan through a master plan at the end of this year or early next year.” Shim Gyo-eon, the private representative of the Housing Supply Innovation Committee, said, “It takes time to take into account the different business conditions for each region and the impact on neighboring housing sites such as the 3rd new town.”
Then, an online community of residents of the first new town said, “I think they are going to announce a plan ahead of the general election in 2024, are you going to take the residents as pawns for the general election?” and “Isn’t the reconstruction going to be over in the current government after pretending to be a major election promise?” was flooded with protests.
Regarding this, Choi Sang-mok, chief of economic affairs at the presidential office, said at a briefing on the same day, “It is common for a master plan to take more than five years to create a master plan at the level of urban re-creation such as a new city. explained that A high-ranking official from the Ministry of Land, Infrastructure and Transport also said, “Considering various variables, the most advanced schedule is 2024.” “We will establish a comprehensive development plan according to this schedule.”
At the time of the presidential election, President Yoon Seok-yeol promised to increase the floor area ratio of the first new town of about 300,000 households, rebuild it, and supply an additional 100,000 households. In the first phase of the new city, starting with Bundang last year, a total of 270,000 households will exceed the ’30-year occupancy’ period by 2026. However, it is currently impossible to promote reconstruction as most of the local governments are tied to the floor area ratio limit of the district unit plan created to prevent overcrowding in the city. For this reason, the apartments in the process of reconstruction are demanding that the Special Act on the Reorganization of the 1st New City be enacted as soon as possible, which goes beyond the current district unit plan.
○Why was the announcement of the master plan delayed?
Since the time of the transition committee, the government has shown up and down in terms of reorganization of the first new city, continuously issuing conflicting messages. When the transition committee announced in April that it would “review the reorganization of the first phase of the new town as a mid- to long-term national task,” the residents of the first phase of the new town responded to the objection, “Are you overturning the promise?” We will proceed without it,” he explained.
The reason why the government has been confused about real estate policies, including the first new town, three months after its inauguration is that house prices, which have stabilized downwards after easing regulations, may overheat again. Lee Eun-hyeong, a research fellow at the Korea Construction Policy Research Institute, said, “President Yoon, who won the presidential election with angry ‘real estate public sentiment’ on his back, has no choice but to be concerned about the divergence of public sentiment due to overheating of house prices.” In the real estate industry, it is pointed out that “as the mid- to long-term market stabilization effect of supply expansion is much greater, it is important to maintain a consistent policy stance rather than being too conscious of short-term side effects.”
There is also criticism that talking about the ‘speed’ of a large-scale new town project that takes ten years in the first place has caused controversy. If the first new city of 300,000 households is to be reconstructed over 10 years, the construction of 30,000 households will have to start every year. Considering that the construction period is about three years, the demand for relocation of 90,000 households can occur at once. As the city of Seoul has begun easing restrictions on reconstruction and redevelopment, it can cause a jeonse crisis and stimulate house prices as it coincides with the relocation of new towns. For this reason, experts explain that elaborate preparatory work is required, such as supplying housing that can meet the demand for relocation in advance and adjusting the amount of rebuilding starts. Hyo-sun Kim, senior real estate member of NH Nonghyup Bank, said, “It takes a considerable amount of time to develop a plan to expand infrastructure such as transportation and schools that can handle the population that has increased due to the maintenance project.”
Reporter Ha Heon-hyung/Lee Hye-in [email protected]