"Allow Factory Dormitories in Innovation Cities"... Daegu City Requests Regulatory Relaxation from Ministry of Land, Infrastructure and Transport

Daegu City is reportedly requesting the Ministry of Land, Infrastructure and Transport to ease regulations to allow the installation of dormitories within factories, which are currently prohibited uses in the Daegu Innovation City, in order to attract and revitalize companies in the innovation city.

Daegu City’s position is that allowing dormitories for companies residing in the innovation city will attract businesses and further activate the innovation city by enabling stable employee employment and operations for resident companies.

Sangyeok Government Complex, Daegu City.

The Ministry of Land, Infrastructure and Transport holds the position that dormitories within the innovation city research and development special zone fall under multi-family housing, which is a prohibited use according to the ‘Industry-Academia-Research Cluster Facility Location Standards,’ and therefore cannot be installed.

However, Daegu City argues that the prohibition on multi-family housing is intended to restrict residential buildings such as apartments and officetels, and that restricting the installation of dormitories as ancillary facilities of factories and welfare facilities for employees is an excessive regulation on companies. They are strongly requesting regulatory relaxation based on related laws such as the ‘Act on the Promotion of Industrial Cluster and Factory Establishment.’

In response, the Ministry of Land, Infrastructure and Transport is reviewing regulatory relaxation, including conducting a dormitory demand survey to support resident companies in 10 innovation cities nationwide.

Daegu City, through consultations with Dong-gu Office and related departments, judges that dormitories as ancillary facilities of factories in the innovation city can be approved as employee welfare facilities, and is continuously proposing to the Ministry of Land, Infrastructure and Transport to eliminate controversies regarding dormitory installation.

Moreover, Daegu City is also pushing for amendments to the Innovation City Act to ease unreasonable regulations that permanently restrict transfer prices when companies transfer land or buildings within the innovation city and require dual approvals upon residency.

Hwang Sun-jo, Director of Planning and Coordination at Daegu City, said, “We will do our best to provide administrative support for the activation of the innovation city and attraction of companies, and we hope that allowing the installation of dormitories as welfare facilities for employees working in factories will help stabilize employment and support company operations for resident companies.”