Assemblyman Kim Hoe-jae Proposes Law for Public Recovery of Private Monopoly Development Profits

Proposed "Urban Development Act" Restricting Private Business Stake and Profit Margins

'Development Profit Recovery Act' Strengthens Development Charge Burden Rate from 20-25% to 40-50%

[Asia Economy Honam Reporting Headquarters, Reporter Heo Seon-sik] Recently, amid ongoing controversies over private entities reaping enormous profits from urban development projects such as Daejang-dong, a bill has been proposed to recover private development profits for the public.

Kim Hoe-jae, a member of the Democratic Party of Korea (Yeosu-eul, Jeonnam), announced the proposal of the 「Partial Amendment to the Urban Development Act」 and the 「Partial Amendment to the Act on Recovery of Development Gains」 to reclaim development profits monopolized by private entities.

The 「Partial Amendment to the Urban Development Act」 proposed by Rep. Kim limits private business operators' shares to less than 50% and caps the profit rate at 10% of the total project cost.

However, the profit rate can be adjusted within 5% of the total project cost depending on factors such as regional balanced development, urgent economic and social situations, the degree of public contribution, and economic feasibility.

Rep. Kim stated that through this, the profit rate for private operators can be flexibly imposed from a minimum of 5% to a maximum of 15% depending on the nature of the project, thereby enhancing not only the public nature but also the efficiency of development projects.

Additionally, new provisions were introduced to ensure that development gains are used for those whose land was expropriated or used in urban development projects, and that residents who lived on the land before the implementation of the urban development project can also receive a return of development gains.

The 「Partial Amendment to the Act on Recovery of Development Gains」 also raises the current development charge rate from 20-25% to 40-50%, establishing a measure to recover private developers' excessive profits for the public.

However, similar to the 「Partial Amendment to the Urban Development Act」, when imposing the charge rate, considerations such as regional balanced development, urgent economic and social needs, degree of public contribution, and economic feasibility must be taken into account.

Accordingly, the development charge rate can be flexibly imposed from a minimum of 30% to a maximum of 62.5%.

Rep. Kim Hoe-jae emphasized, “Private capital has abused the system for speculation, monopolized development profits, and angered the public,” adding, “We will return the astronomical excessive profits earned by private developers to the people.”

He added, “I will ensure the bill passes during this regular session of the National Assembly,” and urged, “I call on opposition parties, who have criticized private developers' profiteering, to actively participate.”

Asia Economy Honam Reporting Headquarters, Reporter Heo Seon-sik hss79@asiae.co.kr

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