"LH is a Public Corporation Only Interested in Money"‥Goyang City Urges 'LH to Bear Construction Costs of Deogeun Station'

Cost of Metropolitan Transportation Improvement Measures per Household... Changneung 54.49 million KRW, Deogeun 2.88 million KRW

Goyang City Hall

[Asia Economy Reporter La Young-cheol] Goyang City in Gyeonggi Province has stated that the installation costs for Goyang Deogeun Station (tentative name), which is part of the 'Daejang~Hongdae Line' private investment project, should be borne by the Korea Land and Housing Corporation (LH).

According to the city on the 16th, the Daejang~Hongdae Line was included in the 4th National Railroad Network Construction Plan (draft) announced last April, and the expected location for the new Deogeun Station is within the 'Goyang Deogeun Urban Development Project' area, which was embroiled in a high pre-sale price controversy last year.

Regarding this, Lee Jae-jun, mayor of Goyang City, said, "It is unacceptable for LH to ignore the installation of Deogeun Station while pocketing enormous profits," and demanded that "LH take responsibility for the installation of Deogeun Station as it induced high pre-sale prices through massive land payment profits," calling for cost-sharing of the project.

He added, "If the costs for the installation of Deogeun Station and the traffic congestion burden after occupancy are passed on to Goyang citizens' taxes, LH will be stigmatized as a 'public corporation that only takes money'."

Furthermore, it was claimed that LH earned profits amounting to 1.3566 trillion won from competitive bidding only for seven apartment blocks (222,182㎡) within the Goyang Deogeun Urban Development Project, not the entire area.

A Goyang city official stated, "Considering that the total land purchase cost for the nearby Jichuk District was 1.2612 trillion won, and that the total area of Deogeun District (645,645㎡) is only about half the size of Jichuk District (1,182,937㎡), the net profit is estimated to be enormous."

This is interpreted as holding LH accountable for the high pre-sale price controversy while earning huge profits through competitive land supply bidding.

When promoted under the Public Housing Special Act and the Land Development Promotion Act, land supply prices are set based on appraised values, and successful bidders are selected by lottery.

Therefore, LH introduced a competitive bidding method for land supply based on the Urban Development Act, which is promoted by the private sector in Goyang Deogeun District, thereby securing enormous land supply profits, which naturally led to an increase in apartment prices.

In fact, Blocks A4 and A7 were sold at prices more than 10 million won per square meter higher than surrounding land in the Deogeun Urban Development Zone, and although they are public housing, they were sold at prices approximately 7.5 to 8 million won higher per square meter.

The city claimed, "In addition to the Goyang Deogeun Urban Development Project (645,000㎡, 13,000 residents), LH is also earning astronomical profits as the developer of large-scale projects in surrounding areas such as Samsong, Jichuk, Hyangdong, and Wonheung Districts."

It was also pointed out that LH is stingy in providing infrastructure for traffic management, causing massive congestion costs after occupancy, while shifting the burden of resolving traffic inconveniences to the basic local government.

The city further cited grounds for LH's responsibility for the Deogeun Station installation costs, stating, "In Samsong District, 25.577 million won per household and in Changneung District, 54.49 million won per household are invested as metropolitan traffic improvement measures."

However, the city explained, "Deogeun District is subject to the 'Special Act on Metropolitan Area Wide-Area Traffic Management' and is classified as an area where metropolitan traffic improvement measures are not established, paying only 2.887 million won per household as metropolitan traffic facility charges. This is about 10% of Samsong District and 5% of Changneung District."

They added, "LH has avoided installing public facilities by splitting development areas, and the same situation applies to Ilsan 2 District and Pungdong District."

According to the 'Special Act on Metropolitan Area Wide-Area Traffic Management' and related laws, LH must establish metropolitan traffic improvement measures and bear improvement costs for large-scale developments.

Last June, the Metropolitan Area Wide-Area Transportation Committee strengthened the target area from 1 million square meters (population 20,000) to 500,000 square meters (population 10,000) to prevent cluster-style development without traffic measures.

With the revision of the enforcement decree to handle metropolitan traffic demand together, it is argued that since the Daejang~Hongdae Line project is the biggest beneficiary, LH should bear the installation costs of Deogeun Station as a form of profit return and polluter pays principle.

LH signed the 'Goyang City·LH Regional Development Win-Win Cooperation Plan' with Goyang City in June last year, agreeing to cooperate in installing public facilities within the Goyang area project districts.

The cooperation plan reportedly includes LH's active cooperation in compliance and implementation related to road and railway projects, expansion and maintenance of public transportation facilities, and metropolitan traffic improvement measures for the Changneung New Town.

Meanwhile, the Daejang~Hongdae Line private investment project, proposed by Hyundai Construction, spans a total length of 18 km from Bucheon Daejang District to Hongdae Entrance, with 11 stations and a project cost of 2 trillion won. The private investment feasibility study is currently underway, with construction scheduled to start in 2024 and completion targeted for 2030.