Reconstruction, together with redevelopment, may be almost the only means to improve efficiency of land use in the existing developed towns and expand housing supplies, but recently, reconstructed apartment houses seem to have been perceived negativel...
Reconstruction, together with redevelopment, may be almost the only means to improve efficiency of land use in the existing developed towns and expand housing supplies, but recently, reconstructed apartment houses seem to have been perceived negatively, being associated with speculations, and therefore, they have been perceived to be thoroughly regulated as culprits of real estate speculations and skyrocketing housing prices. For the government''''s housing policies have been focused on control of housing demands rather than stabilization of housing prices through reconstructions and increased housing supplies, on the assumption that speculative demands would lead to higher housing prices. However, such housing policies focused on demand control has been proven to have limited effects on stabilization of the housing price, and thus, government''''s housing policies seem to emphasize a stable housing market through increased housing supplies.
The purpose of this study was to review the spreading effects of governmen''''s regulation of reconstruction on the housing market and thereby, suggest the ways to design effective housing supply policies focused on reconstruction. For this purpose, the researcher examined the ''''Basic Plan for Regeneration of Downtowns and Housing Environment'''' published by Seoul Metropolitan Government in 2005 and thereupon, estimated the feasible quantity of houses supplied through the urban regeneration projects (reconstructions) until 2010, and thereby, compared the estimated supplies with the housing demands to analyze the effects of such housing supplies through reconstruction on resolution of the housing demands in Seoul.
Expansion of houses through construction of new towns would serve to stabilize the housing prices in the capital areas in a longer term. However, even if a new town has been equipped more or less with basic facilities, it would take more than 5 years to build the new town through the complicated procedures: planning of development, compensation, environmental assessment, approval of the construction plan, sales and construction, and occupation by citizens after all.
As it is, a gap of time between housing supply and actual occupation must be inevitable in a short term, and therefore, the new town plans seem to be less capable of checking the skyrocketing housing prices in a longer term. Merely, as shown in such first-generation new towns as Bundang, Ilsan and Pyongchon, the additional new towns published by the government would conduce more or less to stabilization of the housing market through increased housing supplies in the long run.
After all, in order to achieve the ultimate goal or check the housing prices in Kangnam district in Seoul, the government is obliged to develop some districts comparable to Kangnam in terms of housing conditions and living environment.
While such new towns out of the first-generation new towns as Bundang, Pyongchon and Ilsan served to distribute the housing demands for Kangnam and Kangbuk throughout the capital areas, Jungdong new town remains a satellite down of Inchon. Accordingly, the second-generation new towns and additional new towns scheduled to be built, except for Pankyo and Songpa new towns would seldom have the effect of distributing the housing demands for Kangnam.
The housing prices in Kangnam district would hardly be checked only if the apartment houses should be mass-supplied in the ''''outskirts of the capital region'''' less accessible to the downtowns of Seoul where workplaces and basic living facilities are concentrated. As shown in Eunpyong new town and Paju new town cases, the higher housing (selling) prices have had only backfired inwards downtowns of Seoul. Hence, the only alternative to meet the demands for apartment houses in Seoul is increase of housing supplies through flexible deregulation of the reconstructions, currently regulated redundantly in downtowns of Seoul rather than construction of new towns in the ''''outskirts of the capital region''''.
Therefore, the government is requested to provide the very supportive administration services to reconstruction projects. Although the prices of the candidate apartment houses for reconstruction may be skyrocketed due to speculative demands because they would be rebuilt far higher with increased floor ratio, such speculative demands and the resultant higher housing prices would be checked if the current ''''Development Profit Return Code'''' should be rewritten to be stricter or replaced with a new code to minimize redevelopment cooperative members'''' development profits and prevent the speculative transactions.