Can the '3rd New Town' Progress Accelerate?

Government to Accelerate Supply via Fast Track, but Land Compensation and Traffic Issues Cause Early 'Squeaks'

[Asia Economy Reporter Jo Gang-wook] Although the government is making every effort to expedite the supply of the 3rd phase new towns in the metropolitan area, it appears to be facing difficulties starting from the first step of land compensation. Landowners in the planned new town areas are protesting, claiming that the government is forcibly expropriating land without fair compensation under the pretext of public interest projects. Additionally, there are criticisms that the government's promise of a 30-minute commute to downtown Seoul is likely to remain empty words.

On the 26th, according to the government and related industries, the Ministry of Land, Infrastructure and Transport decided to apply a 'Fast-Track' method that simultaneously establishes district plans and conducts land compensation for the 3rd phase new towns to accelerate housing supply in the metropolitan area. The Ministry explained that this could shorten the period until the start of compensation by an average of more than 10 months compared to the 2nd phase new towns.

According to the Ministry, comparing the period from designation of residential land districts to the start of compensation, the 2nd phase new towns such as Seongnam Pangyo took 24 months, Wirye took 30 months, averaging 27 months, whereas the 3rd phase towns like Hanam Gyosan and Incheon Gyeyang are estimated to take 14 months each, averaging 17 months. Furthermore, the 3rd phase new towns will implement a pre-sale system that supplies housing 1 to 2 years before the main subscription. As a result, the Ministry expects to advance the housing supply schedule of the 3rd phase new towns by about 4 years and 9 months compared to the 2nd phase.

"Forced Land Expropriation" Backlash... Some Protests and Unfinished Appraisals

However, the industry believes it is uncertain whether the land compensation issue will be resolved early as the government intends, as landowners are strongly opposing the compensation amounts.

Currently, among the six planned sites for the 3rd phase new towns, land compensation negotiations are underway in Incheon Gyeyang and Hanam Gyosan districts. However, in these areas, some landowners are protesting, claiming that their land is being forcibly expropriated at 'half price' and demanding fair compensation. Some landowners have been protesting in front of the Korea Land and Housing Corporation (LH), the project implementer, since last month. As of the end of last month, the land compensation contract rate was about 40% in Hanam Gyosan and 15% in Incheon Gyeyang.

A resident of Incheon Gyeyang posted on the Blue House's public petition site at the end of last month, stating, "I purchased a Type 1 residential area 13 years ago at 6 million KRW per 3.3㎡, but the compensation plan offers only 3.4 million KRW," and added, "The paddy fields and farmland bought 13 years ago at 1.2 million KRW are also only recognized at the purchase price level," expressing opposition.

Namyangju Wangsuk (Wangsuk 1 and 2) and Gwacheon have not even completed appraisals due to disagreements with residents. Although the official land price in Gyeonggi Province rose by 9.74% this year, the industry expects minimal impact on land compensation amounts. Residents of Namyangju Wangsuk argue that even if they receive land compensation, paying capital gains tax makes it impossible to settle in surrounding areas, and they did not attend the LH environmental impact assessment draft briefing held on the 8th of this month. Taxes payable in public housing districts include capital gains tax (tax rate 6% to 45%), local income tax (10% of capital gains tax), and special rural tax (20% of the reduced tax amount).

30-Minute Commute to Seoul Downtown... Criticism of Practical Impossibility

Although the government announced that traffic measures have been finalized on average 16 months earlier than before, most transportation networks are scheduled to open 3 to 4 years after the new towns are occupied, making initial residents' inconvenience inevitable. Moreover, since most transportation networks are designed to require transfers rather than direct routes to downtown Seoul, there are criticisms that the government's promise of a '30-minute commute' is practically impossible.

An industry official said, "They are trying to stabilize market sentiment through early supply plans, but it is doubtful whether it will go as intended," adding, "There are also complaints that this is just to appease public sentiment ahead of elections, as the 2nd phase new towns are still not completed."

This content was produced with the assistance of AI translation services.