Mayoral candidates lay out their property plans

With local elections less than two weeks away, the real estate market is focused on the same issues as candidates in the greater Seoul area, including housing, public infrastructure and transportation plans.

For Seoul, the biggest issue in the realty market is the future of the large-scale development plan for Yongsan International Business District, which has been stuck in limbo since the previous administration.

The development project, which covers an area of about 510,000 square meters (126 acres) and includes a 152-story building, was to be the biggest real estate undertaking in the country, at a cost of 31 trillion won ($30 billion).

However, in 2008, when the nation’s real estate market took a critical blow from the global financial crisis, the Yongsan project was halted. The Seoul Metropolitan Government decided to pull the plug due to difficulties in securing the necessary funding.

The issue was recently brought up by Saenuri Party candidate for the Seoul mayoral spot, Chung Mong-joon. Chung said he plans to split the area and build them up in three to four phases. The goal of the step-by-step plan is to lower the cost.

“It is possible for any project of this size to face difficulties,” Chung said during a debate for mayoral candidates held in Seoul earlier this week. “I believe this is a project worth investing in. The problem is because of the people who have worked on it and the method that was applied.”

Incumbent Seoul Mayor Park Won-soon thinks differently. “Would it be possible to overstrain a project that has been nullified?” he asked.

The Seoul government has said that it has no plan to pursue the project. During the debate, Park said that if the project is pushed forward, it shouldn’t be done as a whole. He said it should instead be developed according to the responsible neighborhoods. For example, the railroad area should be developed according to the rail company while the residential area would be developed by the respective owners.

Since the project was canceled, the assessed value of the property fell 6.3 percent last year.

Both candidates showed similar opinions of the new town projects as well as on other reconstruction and redevelopment. They both agree that the projects should be pushed ahead after a review is carried out to decide if it will be economically beneficial.

“As the reckless demolition and relocation resulting from new projects [under Seoul mayors before Park] became a social problem, it is likely that [whether the next mayor be Chung or Park, the Seoul government] will keep its current policy course of reflecting on residents’ opinions [before pushing the project],” said a researcher at Budongsan 114, a real estate information provider.

Both sides also agree to the need for easing construction and redevelopment regulations to further stimulate the market and increase the supply of government-provided apartments available for lower-income families to lease.

Chung mapped out a more aggressive plan to supply 100,000 government-leased apartments during his four-year tenure while Park said he plans to build 80,000 units.

“In the past 24 years, 200,000 government-leased apartment units have been constructed,” Chung said. “That’s less than 10,000 units for each year.”

He said that building such apartments will only be possible if regulations are eased on redevelopment and reconstruction. “Half of the new housing supply in this country comes from reconstruction and redevelopment,” Chung said. He then argued that most lower-income Seoulites live in old derelict homes because of the lack of new housing supply, and he claimed that Park did not build the 80,000 units that he said he had planned.

He said the actual number is 20,000 since 60,000 were already planned by Park’s predecessor, Oh Se-hoon.

During the debate, Park said he plans to construct 200,000 small apartment units to accommodate families of two or three.

But the two candidates disagreed on how best to utilize empty land left after the relocation of government and state-run institutions.

Chung said he plans to attract new investment by creating a start-up industrial complex on the properties, whereas Park said he hopes to improve the lives of Seoulites by installing parks and green space.

On the subject of public transportation, the two sides took a similar stance. Both said they are willing to install light-rail transit to increase the convenience of public transportation.

The Seoul government is currently considering installing seven lines to the four corners of Seoul.

In Gyeonggi, the biggest election issue is how to narrow the polarization of development that has occurred between the northern and southern regions. The southern region has continuously attracted large investors and development projects since the nation’s first new city, Bundang, was built there in the early 1990s. It has continued to expand to more southern areas, including Pangyo.

Both Nam Kyung-pil of the Saenuri Party and Kim Jin-pyo of the New Politics Alliance for Democracy (NPAD), who are vying for the position of provincial governor, agreed that the gap must be narrowed.

But Nam argued that infrastructure such as roads and rail lines leading up to the northern regions - including Goyang and Paju on the northeastern side of Gyeonggi to Namyangju and Gapyeong in the northwest - should be built first.

Kim, of NPAD, promoted the development of a DMZ peace park in the area or an industrial complex mirroring the one in Kaesong.

The two candidates agree on the need to improve transportation.

Nam plans to solve the problem by constructing a highway connecting the northern region to the capital and adopting a “good-morning bus” that would leave every two minutes.

His competitor has proposed a plan to build a subway that circulates through major cities in Gyeonggi and test out a bus system that would be managed by the Gyeonggi government that could take a longer route that private bus companies will not because it is not profitable enough.

“A lot real estate promises are rolling out as the local election is nearing,” said the researcher at Budongsan 114. “The mid- to long-term development direction could be evaluated from the major issues that are being addressed.”

BY LEE HO-JEONG [ojlee82@joongang.co.kr]