The government on Wednesday announced a plan to supply a total of 155,000 new homes near Seoul by developing four “new towns” with 122,000 houses and smaller housing areas. The government also plans to increase its new home supply to up to 300,000 in coming years.
The third-phase “new town” development plan is the first large-scale home supply in Seoul and the surrounding areas in 17 years. There have been criticisms that most of the second-phase new towns, including those in Paju, Dongtan and Gimpo in Gyeonggi Province, are too far away from Seoul and have insufficient transportation infrastructure. The government seemed to have taken the criticisms into consideration when it announced a plan to improve the transportation networks in the capital area. In that respect, it is highly assessed that the government plans to locate the new towns along the planned GTX higher-speed commuter rail network and to announce the principle of creating transportation systems first before embarking on the development projects.
What is important is the implementation. Kim Hyun-mee, minister of Land, Infrastructure and Transport, said the government will consider ways to start the GTX construction at an early date. Considering the fact that grounds cannot be broken on two of the three GTX lines until 2021, the new town development plan could be delayed. In addition, if new home supplies will begin from 2021, as the government projects, a “traffic hell” could be caused. Another challenge is to enable the new towns to be self-sufficient. Without any production base and living infrastructure, they could be reduced to mere bed towns. The government should think harder to attract businesses to these cities in addition to offering low rents.
The development plan is the government’s strong signal that it will rein in the rising home prices in Seoul. The government intends to bring home prices down by increasing supplies in addition putting pressure on demand by strengthening regulations involving loans and taxes. Beating the expectation that Gwacheon will not be included in the planned new towns because its development plan was leaked, the city was included. The government probably concluded that without Gwacheon’s proximity to Seoul, it would be difficult to divert demand in Seoul’s highly coveted Gangnam area. It is in the same vein that a road maintenance office and the Seoul Medical Center’s parking lot in Gangnam are included in the new housing development areas.
Home supplies are a prescription that should not be overused, even though they are intended to stabilize home prices. The fact that most of the new town sites are development-restricted areas called “greenbelt” reminds us of the negative effects of development. Accelerated expansion of Seoul and the surrounding areas also causes concerns. More than anything else, the government should remember that new home supplies on the outskirts of Seoul would not be enough to absorb demands if they are not constantly linked with redevelopment and reconstruction projects in downtown Seoul and the Gangnam area.