'Insufficient Recovery of Development Gains' Criticized... Noh Hyung-wook Says "Comprehensive Review of the System"

Minister of Land, Infrastructure and Transport Noh Hyung-wook is responding to questions from committee members during the National Assembly Land, Infrastructure and Transport Committee's audit of the Ministry of Land, Infrastructure and Transport, the Administrative City Construction Agency, and the Saemangeum Development Agency held at the Government Sejong Complex in Sejong City on the afternoon of the 5th. [Image source=Yonhap News]

Minister of Land, Infrastructure and Transport Noh Hyun-wook expressed his intention to review overall improvement measures for the profit recovery system in relation to the controversy over preferential treatment in the Daejang-dong development project in Pangyo, Gyeonggi Province.

On the 5th, during the National Assembly Land, Infrastructure and Transport Committee's audit of the Ministry of Land, Infrastructure and Transport, Minister Noh responded to a question from Heo Young, a member of the Democratic Party of Korea, who said, "Large profits are generated in development projects involving land use changes, including the Daejang-dong project, but they are not being properly recovered," by stating, "We will review the entire related system."

Rep. Heo said, "This is an opportunity to reform the profit recovery system with a detailed design that can recover profits not only during the development phase but also from all increases after development."

He added, "It must start with the 3rd New Town, where a huge volume will be supplied," emphasizing, "Because another Daejang-dong incident is inevitable, please establish mechanisms to recover profits through significant reforms starting from the 3rd New Town."

Minister Noh said, "Currently, profits are recovered through development charges during the development phase and through taxation during the holding and disposal phases," adding, "We will review the entire development profit recovery system."

The Urban Development Act, which serves as the legal basis for the Daejang-dong project, does not set an upper limit on the profits that private developers can take.

Currently, a bill to amend the Urban Development Act has been proposed in the National Assembly, which applies the Land Development Promotion Act to limit the profits of private developers participating in urban development projects to 6% of the total project cost.

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