Won Hee-ryong: "Accelerate Master Plan for 1st Generation New Town Redevelopment"... DSR Relaxation for Youth and First-Time Homebuyers

"Simultaneous Development Doesn't Fit... A Systematic and Comprehensive Master Plan Is Needed"
"Gwangmyeong and Yongin Also Require Urban Space Restructuring... Coordination According to Conditions"

[Image source=Yonhap News]

[Asia Economy Reporter Kim Hyemin] Won Hee-ryong, the nominee for Minister of Land, Infrastructure and Transport, announced that he will immediately begin establishing a master plan for the redevelopment of the first-generation new towns upon the inauguration of the new government. This means that while the National Assembly processes the special law, the government will expedite support by concretizing the redevelopment measures. He also stated that areas such as Gwangmyeong and Yongin require urban space plans at a level of reinvention and that adjustments will be made according to conditions without discrimination.

On the 1st, Won met with reporters at the transition committee office in Tongui-dong, Jongno-gu, Seoul, and made these remarks. As the planning chairman of the transition committee, Won visited the committee to report on the activities of the Population Policy Task Force (TF).

After the briefing, Won emphasized regarding the controversy over the retreat from the first-generation new town pledge, "We will faithfully keep the direction and pledge by making plans within the term and proceeding in an orderly manner without deliberately dragging out the time."

He stated that the new government will create a comprehensive master plan and mid-to-long-term plan for the first-generation new towns. Won said, "Developing all at once does not match supply and demand, and temporary residential facilities must be created to consider relocation for cyclical development. Since these factors can cause shocks to the entire rental market, it is necessary to proceed in an orderly and systematic way, so a comprehensive master plan is needed. The National Assembly will promote a special law, and the government will expedite the master plan."

Regarding why the government manages the first-generation new towns, he explained, "Because the state built about 300,000 households all at once, it is different from spontaneous individual reconstruction. Initially, residents moved in without transportation, causing traffic chaos, and afterward, patchwork measures like the Jayuro and Shinbundang Line were implemented, so the transportation aspect was not properly organized." He added, "If infrastructure, living amenities, and metropolitan transportation networks are not connected, it could lead to another form of indiscriminate development. If individual reconstruction is pursued for profit, no one will be able to move forward overall."

When asked if a related task force will be formed after the new government takes office, Won replied, "Of course, that will happen." Regarding the backlash from nearby reconstruction complexes in Gwangmyeong and Yongin claiming reverse discrimination, he said, "There are complaints from areas that are not first-generation new towns or districts developed before the first-generation new towns. Now, the entire urban space needs to be restructured at a level of reinvention. Including new towns, we plan to coordinate comprehensively and appropriately according to conditions to orderly alleviate asset disparities occurring in the aging environments throughout the metropolitan area."

On easing loan regulations, he emphasized, "Recently, banks have been increasing loan volumes using regime change as an excuse, and there will be a clear signal regarding this."

Won stated, "Interest rates will primarily respond to the macroeconomic shock caused by global inflation, and naturally, loans will be regulated. However, to solve the problem of only cash-rich people buying houses, the loan-to-value ratio (LTV) will be selectively increased for youth and first-time homebuyers."

He also announced plans to reduce the burden on young people by extending loan periods under the Debt Service Ratio (DSR) system. He said, "There are many indicators that can be adjusted, such as the numerator and denominator. While maintaining the strengthened trend, we have been extensively reviewing how to alleviate the gap with the younger generation and low-income households without homes."

Regarding the possibility of 40-year or longer mortgage loans, he said, "Banks are doing business under the pretext of helping low-income people, but we cannot blindly follow. We will find a balance point to ensure that policy targets receive clear benefits while minimizing side effects." He emphasized, "We will steadily provide opportunities for supply-first policies and asset formation for youth and the homeless, and regarding excessive tax burdens on one-home owners, we will prepare everything perfectly through necessary administrative procedures and minimal reporting processes with the National Assembly upon taking office and execute without any delay."

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