[Reporter’s Notebook] Numerous Hurdles Ahead for the '1st Generation New Town Special Act'

[Asia Economy Reporter Cha Wanyong] "Calls inquiring about purchases have been coming in right after the announcement of the special law."

After the government announced the "Act on the Maintenance and Support of Aging Planned Cities," commonly referred to as the "1st Generation New Town Special Act," real estate agencies located within the 1st generation new towns were busy receiving calls inquiring about purchases. The market is heating up with anticipation, showing an immediate reaction.

However, there are significant hurdles to overcome. The special law is proposed by the government, meaning it must pass through the National Assembly, and given the current situation of a minority government with opposition majority, its passage is uncertain. Moreover, the special law raises issues of regional development equity, likely causing division in support between lawmakers representing the 1st generation new town areas and those from other regions.

Even if it passes the National Assembly smoothly, deciding the order of project implementation will be another challenge. The government announced plans to designate one leading area per each 1st generation new town, but conflicts are expected among complexes competing to start their projects first.

Meticulous preparation is also required for detailed maintenance plans. The floor area ratio (FAR) of the 1st generation new towns is around 200%, but if the FAR is increased to 500%, current roads, electricity, and water supply systems cannot accommodate the change. Even now, infrastructure such as water and sewage, power supply, and transportation is insufficient. Therefore, the plan to increase housing supply by raising the FAR requires the premise of redesigning all related infrastructure. In other words, the entire city must be completely overhauled.

To achieve this, multiple complexes must be combined for integrated reconstruction. However, coordinating interests among individual complexes is no easy task. Aligning the interests of thousands of households and establishing development plans for each district is also necessary.

Experts expect that even if the special law is introduced, it will take a long time before actual construction begins. While the government's plan to support the maintenance of 1st generation new towns through easing approval procedures and increasing FAR is positive, planning and execution are different matters.