[The Editors' Verdict] New Towns: The '500% Floor Area Ratio' Reconstruction Is Misguided

There is a type of business that can be easily found in shopping areas within apartment complexes in first-generation new towns in the Seoul metropolitan area, such as Bundang and Ilsan. These businesses display signs like ‘hardware, electrical, repair.’ Although numerous small and large stores have sprung up in almost every complex shopping area, very few have closed due to lack of business.

The aging of first-generation new town apartments, which began occupancy in 1992 and are now reaching 30 years old, is actually more severe than that of complexes built earlier. This is due to material shortages, notably the use of sea sand, and poor construction during the rapid large-scale housing supply period. With frequent water outages caused by aging pipe failures, these new towns are perpetually ‘under construction.’

Given these circumstances, alongside the Gangnam area of Seoul, first-generation new towns are among the places with the highest expectations for the new government’s real estate regulation easing. The campaign promise by President-elect Yoon Suk-yeol to allow ‘500% floor area ratio reconstruction’ in new towns has ignited the housing market. Welcome banners displayed throughout the new towns reflect these high hopes. According to an information site, in Bundang alone, apartment transaction prices in the past month have surged by tens of millions to over 200 million won compared to previous deals.

However, is a 500% floor area ratio truly reasonable? There has been no detailed explanation of the basis for this ratio so far. It is only inferred that it intends to permit high-density development comparable to typical urban areas, considering that the upper limit for floor area ratio in quasi-residential zones under the National Land Planning and Utilization Act is 500%.

The floor area ratio of new town apartments varies by complex but is mostly around 200%. Simply put, this would more than double the density. The question is whether the existing infrastructure in these new towns can handle such high-density development.

The infrastructure in new towns is already saturated. This is largely due to adjacent developments rather than the towns themselves. For example, Bundang is surrounded by public and private land development districts in Seongnam and Yongin cities, such as the adjacent Pangyo New Town, Yeosu, Dochon, Godeung, Dongcheon, Jukjeon, Suji, and Bojeong. Similarly, Ilsan is surrounded by numerous land development districts including Paju New Town, Hwajeong, Haengsin, Tanhyeon, Jungsan, Hyangdong, and Samsong, making it difficult to list them all. Despite steady expansion of metropolitan transportation networks, the volume of commuting traffic connecting these areas to Seoul has long exceeded capacity.

The intention behind pledging high-density reconstruction is fully understandable. With almost no available development land left in Seoul for large-scale housing supply, supplying housing through reconstruction of first-generation new towns located about 20 km from the city center is an attractive option. Nevertheless, high-density development should not be viewed merely as a means to increase quantitative supply. It must be planned within the broader framework of urban planning.

No one would oppose the promise to expand housing supply to stabilize housing prices. However, it would be unwise to focus solely on immediate housing supply and thereby damage the well-planned functions of these new towns. Housing supply through urban renewal projects such as reconstruction and redevelopment should be considered a consequential side effect. The fundamental goal is the restoration of urban functions.

Coincidentally, Won Hee-ryong, the nominee for the first Minister of Land, Infrastructure and Transport in the new government, also stated, “There is no blueprint for deregulation or supply that would send wrong price signals.” This indicates an understanding that there is no ‘silver bullet’ solution to the real estate problem. The reconstruction of new towns must also be examined to ensure it aligns with the primary objective of urban renewal.

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