Is Osan Segyo District 3 a Scapegoat?

Gyeonggi Province and Osan City expressed strong dissatisfaction over the cancellation of the designation of Osan Segyo District 3, saying it was "a unilateral withdrawal of residential development project by the Ministry of Land, Infrastructure and Transport."

According to a provincial announcement on the 31st of last month, the Ministry of Land is treating the cancellation of the Osan Segyo District 3 development project as a done deal while adjusting business districts in accordance with the amended Korea Land and Housing Corporation Act, which passed through the National Assembly on December 8 last year.

In response, the province and Osan City expressed displeasure over the Ministry of Land's unilateral promotion of project cancellation, noting that the ministry submitted an agenda for deliberation to the Central Urban Planning Committee on the 31st for the cancellation of the Osan Segyo District 3 designation.

Osan Segyo Districts 1, 2, and 3 were areas where the Ministry of Land unilaterally announced new city development in September 2009. However, as the Korea Land and Housing Corporation (LH) fell into a financial crisis due to unplanned mismanagement and a real estate downturn, Osan Segyo District 3 is at risk of becoming a scapegoat.

The province and Osan City have been taking the lead in discussions on business adjustments for Segyo District 3, and have repeatedly stated that the activation of sales and development of Segyo Districts 1 and 2, and coordination of pending issues such as U-City services in Segyo District 1 and metropolitan transportation improvement measures should be preceded between Osan City and LH.

Additionally, the province and city have maintained the position that sufficient review should be conducted with adequate time in a manner that does not hinder urban development in Osan City and does not cause damage to residents, and the direction of handling should be determined accordingly.

In particular, the province strongly requested that if the project is cancelled, specific resident support measures to minimize resident damage due to long-term restrictions on activities should be presented, and that the Western Bypass Road be opened early from a resident support perspective to alleviate inconvenience to residents.

In response, the Ministry of Land is reportedly taking the position that early project cancellation is unavoidable to minimize resident damage from long-term activity restrictions, and it will submit the matter to the Housing Policy Deliberation Committee in early April and proceed with project cancellation according to schedule.

The province and Osan City announced they would jointly respond to such positions by the Ministry of Land and LH, and stated they would handle new projects promoted by LH in the future with caution.

Accommodating Population of 150,000... New Cities Abound in Surrounding Areas

The development plan for Osan Segyo New City was announced by the Ministry of Land in September 2009. According to the plan, Osan Segyo District 1 will have 16,249 planned households (49,641 residents), Segyo District 2 will have 12,921 households (37,521 residents), and Segyo District 3 will have 22,669 households (63,471 residents), for a combined total of approximately 52,000 households and 150,000 residents across Districts 1 through 3.

Compared to Osan City's current population of around 180,000, it is as if another Osan City is being created. Although Osan's population continues to grow, assessments indicate that Segyo New City still has weaker self-sufficiency as a city compared to other new cities.

The situation surrounding Osan New City is also not promising. Right next door, there are already plans for Dongtan New City with 40,000 households and 120,000 residents, and Dongtan 2 New City with approximately 110,000 households and 260,000 residents, and within less than 20 kilometers of the area, Pyeongtak Godeok International New City and Hwaseong Hyangnam New City are located.

Real estate experts note that the existing 200,000 units of unsold units and pending supply in Segyo Districts 1 and 2 alone would likely pose a considerable burden for LH in terms of development.