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The fastest possible housing supply route exists, yet it goes unmentioned. Everyone you meet says it's puzzling. The subject is the third-phase new towns.
The home-price surge that began in Seoul's three Gangnam-area districts (Gangnam, Seocho, Songpa) and the Han River belt of Mayongseong (Mapo, Yongsan, Seongdong) has spread to outer Seoul areas such as Nowon, Dobong and Gangbuk, and to Gyeonggi Province's semiconductor belt including Bundang, Suji, Dongtan and Pyeongtaek. Stricter residency requirements and lending restrictions have even dried up the supply of jeonse rentals.
The government, too, has rolled up its sleeves to expand supply. Long-forgotten housing supply plans for the Taereung golf course and the Yongsan International Business District have been revived, and the government announced it would relocate the Gwacheon racetrack to build housing on the site. It even went so far as to unveil a plan to provide unlimited purchased rental housing within regulated zones.
Yet there is no discussion surrounding the third-phase new towns, where construction is already under way and the fastest supply is possible. Under the plans, the floor area ratio of the third-phase new towns is around 200%. That is only half the level when compared with the roughly 350% floor area ratio of recently reconstructed and redeveloped apartment complexes in Seoul, or the 300–350% ratio for first-phase new town reconstruction under the Special Act on Aging Planned Cities.
With the third-phase new towns slated to supply 200,000 homes, raising the floor area ratio from 200% to 350% would, by simple calculation, allow 150,000 more homes to be built. That is 2.5 times the 60,000 new units gathered under the Jan. 29 measures. One industry official said, "The third-phase new towns leave ample room to adjust floor area ratios, since infrastructure can be expanded alongside the development." He added, "It would be far easier to raise the floor area ratios of the third-phase new towns—building infrastructure on empty land from the start to match higher ratios—than to raise ratios for first-phase new town reconstruction, where existing infrastructure must be taken into account, yet there isn't even any discussion of it."
The third-phase new towns are also slow to build. Seven years have passed since the announcement, but the move-in timeline remains shrouded in uncertainty. The Ministry of Land, Infrastructure and Transport recently issued notice approving a change to the project period for Goyang Changneung, extending its duration. Other third-phase new towns, such as Namyangju Wangsuk and Wangsuk 2, have likewise seen their project periods extended.
Some argue that, since construction has been delayed anyway, raising the floor area ratio should be discussed. Improving the efficiency of land already secured is far faster and more realistic than measures to find new land or revitalize redevelopment projects. Another construction industry expert said, "Paradoxically, because they are still being built, raising the floor area ratio can also be discussed," adding, "It should proceed after the head of the Korea Land and Housing Corporation (LH) is appointed."
