Advance Pre-Subscription for 3rd Phase New Towns Imminent... Land Compensation in Incheon Gyeyang Remains a Risk Factor

"We do not want development," "Just bury me in my land."

With less than a month remaining before the start of the 3rd New Town pre-subscription, these are the phrases displayed on banners at the entrance to the Gyeyang Techno Valley Public Housing District (Gyeyang New Town). Landowners dissatisfied with land compensation have become even more resolute following suspicions of land speculation by employees of the Korea Land and Housing Corporation (LH).

According to the real estate industry on the 14th, among the six districts of the 3rd New Town, the land compensation progress rate in Gyeyang, Incheon, exceeded 60% earlier this month. Gyeyang, Incheon is considered one of the faster progressing sites among the 3rd New Town pre-subscription target areas. On the 2nd, the Ministry of Land, Infrastructure and Transport finalized the district plan for Gyeyang New Town, the first among the 3rd New Towns in the metropolitan area. The district plan includes land use and floor area ratio-based population and housing capacity, infrastructure installation plans, and transportation measures. Although the government intends to quell 'panic buying' demand through pre-subscription, the situation on the ground does not look easy.

A real estate agent, Mr. A, in Dongyang-dong, Gyeyang-gu, Incheon, adjacent to Gyeyang New Town, hinted, "The resistance from landowners opposing land compensation is not subsiding easily." Indeed, banners everywhere on the site where Gyeyang New Town is being built read, "Gyeyang residents are crying out, you thieves!", "Withdraw forced expropriation! Moon Jae-in step down!", "You were told to serve the country, but LH leads the robbery!", "LH should bury Gyeyang residents in this land and proceed with construction!"

Legally, if landowners do not agree with the compensation price proposed by the government, they can request a re-assessment through an expropriation decision. The results of the expropriation decision are expected around October. However, landowners have become more resolute after the LH scandal. Mr. A said, "Due to the LH scandal, distrust among landowners has grown," adding, "There is widespread criticism that LH is engaging in land trading targeting the public." Even if forced land expropriation is decided, conflicts may erupt during relocation and demolition. This could cause significant disruptions not only in the Gyeyang district but also in the overall schedule of the 3rd New Town.

In fact, among the six districts of the 3rd New Town, except for Gyeyang in Incheon and Gyosan in Hanam, no announcement of land-for-land compensation plans has been made. The most recent announcement was the land-for-land compensation plan for Gyeyang, Incheon, issued on April 2. Areas designated as 3rd New Towns in December 2018, such as Namyangju Wangsuk, have yet to release even land-for-land compensation plans. Due to the overall delay in compensation work for the 3rd New Town, there is analysis that the government's planned 2025 move-in is unlikely.

However, LH has stated that for project districts scheduled to start compensation within this year, such as Namyangju Wangsuk and Wangsuk 2, Goyang Changneung, and Bucheon Daejang, land-for-land compensation will be implemented in the second half of 2021 after review by the land-for-land compensation deliberation committee. LH said, "We plan to start compensation without delay according to the schedule of pre-subscription for each project district," and "We will continue to communicate with residents and proceed with compensation."

Aside from site acquisition, securing self-sufficiency functions is cited as another key factor determining the success of the 3rd New Town project. Mr. B, a real estate agent near Bakchon Station adjacent to Gyeyang New Town District, said, "Earlier this year, there was significant demand for moving in and renting in preparation for pre-subscription and main subscription," adding, "Despite much talk, expectations for the 3rd New Town seem considerable." He also said, "If only apartments are built, it will just become a bedroom town," and "Nearby residents consider activating self-sufficiency functions through corporate attraction as a core task for the success of Gyeyang New Town."

Meanwhile, the Ministry of Land, Infrastructure and Transport has finalized the pre-subscription target sites and supply quantities starting next month for the 3rd New Town and others. A total of 32,000 households, including 9,400 households in the 3rd New Town, will be supplied in four rounds starting July this year. Multiple complexes will be grouped and announced collectively in the four rounds in July, October, November, and December, providing information such as area, number of households, estimated sale price, rough floor plans, and main subscription timing.