[VIEW POINT]A rush to deregulate land use

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[VIEW POINT]A rush to deregulate land use

The impetus for changes in Korea’s land policy has picked up steam.
After President Roh Moo-hyun said he wanted to relax regulations on land use and real estate transaction, the bureaucracy has been busy. The latest plan came from the economic deputy prime minister, Lee Hun-jai, who recently announced plans for a “zero-based” approach to land use rules; in other words, starting over from scratch.
The regulations on ownership and use of farmland would be largely lifted, and the construction of apartments or factories in areas now regulated under the rubric of “semi-agricultural land” would be made easier. Greenbelt restrictions would be lifted in more areas to allow redevelopment as government-built housing complexes. Nature preservation zones would accommodate tourism and resort facilities and the general ban on new factories in the Seoul area would be rethought.
The new policies apparently are already resulting in a surge in real estate prices. There have been signs that speculative capital is moving from apartments to land. Is this a pork-barrel policy in advance of the April National Assembly elections, or is it a sincere attempt by the Roh administration to boost the economy?
Of course the private sector has been constantly demanding a more relaxed land policy. If a company wants to build a new factory, it has to navigate through the restrictions in over 120 different laws. Companies complain that the complicated legal formalities have caused a lot of trouble and damaged competitiveness. If the unnecessary procedures and paperwork have in fact been a hindrance, they should be removed immediately.
But the gravest concern is the potential collapse of the cumulative zoning system, the mainstay of national land policy.
Land is a limited resource, and it would be risky to put the market solely in charge of land transactions. Virtually every country runs a zoning system to fit its needs, and most developed nations have far more strict land regulations than does Korea.
For example, the government would designate certain area as a greenbelt for conservation purposes. But many Koreans think that they can build factories and apartments in those green zones if only they badger the government enough, because that’s how it’s been done so far. It would be more convenient to buy cheap forest land or farmland and change the use to fit the need rather than buying the needed land in a properly zoned area at a higher price.
What that boils down to is that pocketing the profit from the rise in land prices would be more lucrative than the business for which the land was being used. Nature preservation zones, green belts, and agricultural zones were relatively well respected, but even these regulations will not hold up much longer.
The country is suffering from inconsistent development. Look around and you will see apartments, factories, warehouses, restaurants, motels, pensions, and summer homes erected in the middle of a field or forest. They were developed around the real estate regulations. As the government declared its intent to loosen the restrictions, the development boom is heating up. It is hard to find a well-preserved land. There is no planning or order. Some developers want to build apartments in areas where there are no roads or infrastructure. Others just want to take a free ride in the already developed area. The social costs from inconsistent development will be the burden of society as a whole.
The pell-mell development of land is a product of slack regulations. It has been not even two years since the government changed the semi-agricultural lands into supervised zones with the principle to prevent development without proper planning. The policy direction now has made a 180-degree turn. The government has also lifted greenbelt restrictions all over the country, which led to a new version of greenbelt exploitation.
Land regulations mean land planning and vice versa. Land ownership is respected within the boundaries of the designated purpose and do not guarantee the owner that he can do as he pleases. If owners were allowed to use their land to maximize their personal profit, the country would be covered with inconsistent, messy development. Who would respect urban planning rules and who would welcome land regulations? Once damaged, it would be nearly impossible to restore the land. Similarly, government policies cannot be reestablished after they are removed.
As the economy grew, so did demand for land. To meet the demand, the government must plan and rezone farmland or woodland gradually. But government agencies have failed to respond to market demand. We need a better plan to meet that need, not a lifting of regulations altogether.
Korea is a small country. We need to make the best use of our limited land. Wise usage of land can be the basis for industrial competitiveness in the long run. Populism must not influence land policy just because it is an instant remedy, the election is approaching and the economy is sluggish. Without a proper regulatory buffer, indiscriminate land policy changes would be a poison for the country forever.

* The writer, former president of the Korea Research Institute for Human Settlements, is a professor of social science at Dankook University. Translation by the JoongAng Daily staff.


by Lee Kun-young
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