The Anti-Corruption and Civil Rights Commission Recommends "Migrant Housing Site Supply Prices Should Be Based on Land Development Costs" in December 2018
Assemblywoman Kim Eun-hye: "Seongnam's Deutteul Ignores Recommendation and Supplies at About Twice the Price of Nearby Districts"
Despite the recommendation from the Anti-Corruption and Civil Rights Commission during the Daejang-dong development, allegations have been raised that the project implementer, ‘Seongnam-eutteul,’ sold land to the original residents at high prices to make excessive profits. Seongnam-eutteul is the project implementer for Daejang-dong selected by the Seongnam Urban Development Corporation.
According to the office of Kim Eun-hye, a member of the People Power Party, in December 2018, the Anti-Corruption and Civil Rights Commission recommended that all city and provincial governments and urban development corporations nationwide unify the supply price of relocation land to the land development cost. However, Seongnam-eutteul (the Daejang-dong project implementer selected by the Seongnam Urban Development Corporation) ignored this and supplied the land at a much higher appraised price in July 2019, the following year.
The initial ‘Relocation and Living Measures Implementation Rules’ of the Seongnam Urban Development Corporation in 2014 stipulated that the supply price of relocation land should be based on the ‘development cost.’ At that time, even though the Ministry of Land, Infrastructure and Transport’s guideline was the ‘appraised price,’ the Seongnam Urban Development Corporation established rules to supply land to the relocated residents at a cheaper price.
However, after Seongnam-eutteul was selected as the preferred project negotiator in 2015, the Seongnam Urban Development Corporation deleted ‘development cost’ in 2016 and revised it to ‘the price determined by relevant laws and regulations.’ Since the relevant laws and regulations ultimately refer to the Ministry of Land, Infrastructure and Transport’s guidelines, it meant the price was changed to the appraised price, according to Kim’s office.
But as residents’ complaints intensified, the Anti-Corruption and Civil Rights Commission resolved on December 17, 2018, to unify the supply price of relocation land to the development cost in the ‘Measures to Resolve Frequent Complaints in the Urban Water Resources Sector’ and sent this to urban and development corporations nationwide. After receiving the official letter from the Commission, the Ministry of Land, Infrastructure and Transport announced a legislative notice to change the guideline in December 2019 and revised the relocation land price to ‘development cost’ in February 2020.
The problem is that the Seongnam Urban Development Corporation sold the land at the appraised price in July 2019 despite receiving the Commission’s recommendation. Kim’s office reported that an original resident who purchased the land at the time said, “We filed complaints twice to the National Sinmungo in October 2018 and March 2019, arguing that supplying relocation land at the appraised price was unreasonable. While protesting the sale price to Seongnam City, we were taken aback when the relocation land announcement suddenly appeared.” The announcement was actually made on July 11, 2019, and contracts were signed on July 30 and 31, with the residents commonly explaining that the process from announcement to contract was rushed.
Ultimately, the original residents had to give up their living grounds at about 3 million KRW per pyeong and contract for empty land at about 13 to 17 million KRW per pyeong, which Kim pointed out is double the price of the nearby Godeung district supplied one to two years earlier at about 7 to 8 million KRW per pyeong.
Kim said, “The Anti-Corruption and Civil Rights Commission clearly recommended supplying at development cost, and the Ministry of Land, Infrastructure and Transport actually changed the guideline, but Seongnam-eutteul hurriedly sold the land to the original residents at a high price in the meantime. This was a trick by Seongnam-eutteul to maximize their profits, and the Seongnam Urban Development Corporation tacitly allowed it.”
Kim added, “Currently, a lawsuit over the land price between the original residents and Seongnam-eutteul is underway, and the court ruled in favor of Seongnam-eutteul in the first trial. I hope that the recently disclosed resolution from the Anti-Corruption and Civil Rights Commission will serve as evidence to help the court make a reasonable judgment in the second trial.”
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