Big-city development model loses ground
Since 2000, when laws were enacted to promote urban development, there have been 418 projects across the country totaling an area of 146 square kilometers (56 square miles), the same size as one-fourth of Seoul, according to the Ministry of Land, Infrastructure and Transport.
Nearly 40 percent of those projects, covering just 3.7 square kilometers, have been completed, while the rest, covering more than 109 square kilometers, are still underway.
In 2000, the government passed legislation meant to speed up development of new cities to meet surging demand for housing and industrial space as Korea experienced fast economic growth from the 1980s onward.
The government previously had separate laws for housing and industrial development. The goal of the new regulations was to efficiently and swiftly push forward urban development projects that not only include the construction of homes but also commercial areas. This led to the development of planned cities like Pangyo in Gyeonggi.
But in recent years, such major projects have been dwindling. Last year, only 31 projects were approved. Although this figure is slightly higher than the 30 projects approved in 2015 and the 23 in 2014, they do not match the scale of past projects. Last year, the total size of the projects approved was 6.2 square kilometers, which is 13 percent smaller than the area approved in 2015.
“We believe this is because the supply of large tracts of public land has shrunk,” said Kim Ki-dae, a director at the Land Ministry, “and social, economic and government policies have changed to reflect growing preference for smaller projects.”
Big urban development projects hit their peak in 2008, just before the global financial crisis struck the local real estate market. As in the United States, the housing market in Seoul was heating up as property values skyrocketed in the four most desirable residential districts in southern Seoul known collectively as Gangnam.
In 2008, 55 development projects were approved, nearly double the previous year. The area they covered was 24.8 square kilometers, more than twice the amount in the previous year.
According to the Land Ministry, Gyeonggi ranked first by a far stretch when it came to the number of urban development projects. Since 2000, there have been 119 projects there, followed by just 52 in South Chungcheong, 37 in South Gyeongsang and 40 in North Gyeongsang.
Private-sector development outnumbered projects by the public sector. Private-sector projects accounted for 55.3 percent, while public-sector projects accounted for 44.7 percent.
BY LEE HO-JEONG [email@example.com]