2014 National Territorial and Regional Development Policy Course for Sustainable Development of the Three Emerging Countries.

Transcription

1 Evolution of Land Policies of Korea 2014 National Territorial and Regional Development Policy Course for Sustainable Development of the Three Emerging Countries April 14, 2014 Hee-Nam Jung Senior Research Fellow Korea Research Institute for Human Settlements

2 Contents 1. Role of Land Policy in the Vortex of Korean Economic Development 2. Land Policy in the late 1940s & 1950s 3. Land Policy in the 1960s & 1970s 4. Land Policy in the 1980s 5. Land Policy in the 1990s & 2000s 6. Policy Implications of the Korean Experience 2

3 1. Role of Land Policy in the Vortex of Economic Development cornerstone for establishing the Nation State (1945~1961) - establishing private ownership for tenets and promoting farmland reform foundation for pursuing economic development Ⅰ(1961~1972) - investment in labor intensive light industry foundation for pursuing economic development Ⅱ (1972~1980) - transforming the economic structure towards heavy & chemical industries basis for alleviating social conflict (1980~1992) - articulating anti-speculation measures grounds for opening up towards globalization (1993~1997) - deregulation and privatization space for realizing democracy and digital industry (1998~until now) - sustainable development and new governance 3

4 2. Land Policy in the late 1940s & 1950s: Land Ownership & Cadastre Registration System Independence from Japanese colonization in 1945 enactment of the Constitution in establishing the capitalist market economic system - thus, guaranteeing private ownership of land and real estate farmland reform in transforming the social structure from a feudal to a capitalist civil society - the individual household ceiling for farmland ownership to 30,000m2 post-korean War re-building programs - since Agricultural the Land Tax Law in Nov. 1950: securing revenue sources - the Land Cadastre Law in 1950: basis for managing land resources - land readjustment project: reconstructing destroyed urban areas 4

5 Land Information System Cadastral Management - A system that opens to the public a factual relationship of land boundaries using location punctuality based on land surveys - Land Registry (land use, area, etc.) - Cadastral Map (boundaries of each parcel) Land Ownership Registry - A system showing the intangible relationship of ownership of each land parcel - Controlled by The Supreme Court and based on the Real Estate Registry Law Land Use Management - A system associated with land use policies, land appraisal, land trading management, land use planning, etc. - legally based on several laws, which are executed and authorized by MLIT (Ministry of Land, Infrastructure and Transport) 5

6 Services of the Korean Land Information System Land Transaction Land Acquisition/Transaction for Foreigners Development Charge Real Estate Agent Mgmt. Land Price Mgmt. Land Use Zoning 6

7 3-1. Land Policy in the 1960s : Enacting Land Laws economic development programs since emphasizing labor-intensive, light & export-oriented industries - thus, enacting a series of land laws to support these programs urban development laws - the Urban Planning Law & the Land Expropriation Law in the Land Readjustment Law in 1966, etc. infrastructure provision laws - the Railroad Law, the Road Law, the Water Law, the Sewerage Law in 1961 industrial estate development laws - the Comprehensive Planning for Territorial Construction Law in the Export Industrial Complex Development Law in the Local Industrial Development Law in

8 3-2. Land Policy in the 1970s : Enacting Land Laws industrial policy changed towards heavy & chemical industries - heavy & chemical industries, steel & machinery, shipping & electronics, etc. enacted land laws to support these programs - the National Land Use and Management Law in the Industrial Base Development Promotion Law in the Industrial Site Management Law in the Industrial Location Law in

9 Path of Korean Urbanization Industrialization Liberated in 1945, Korean War ( ) followed by: Military Coup in 1961 to escape from absolute poverty Since the 1960s: industrial policies focusing on labor-intensive manufacturing Since the 1970s: industrial policies promoting heavy and chemical industries Since the 2000s: investment in techno parks or urban hi-tech industrial parks <Industrial Estate Development Trend ( )> National Industrial Estate Regional Industrial Estate Agricultural Industrial Estate 9

10 Urbanization Rapid urban growth through rapid industrialization Accelerated rural to urban migration to seek employment Increased demand for urban housing: - number of homes: 3.3 million units in million units by housing supply ratio: 82.4%(1962) 69.2%(1987) 100%(2000) 112%(2010) <Population Distribution Trend ( )> Path of Korean Urbanization <50,000 50, , , , , , ,000-1,000,000 >1,000,000 10

11 Path of Korean Urbanization Urban infrastructure To accommodate the need for rapid urbanization and industrialization - installed infrastructure including extensive networks of roads, expressways, subways, the high-speed KTX, harbors, airports, etc. <Trend of Infrastructure Development ( )> Railway Highway Harbor Airport 11

12 Path of Korean Urbanization In summary Since the early 1960s, there has been rapid urbanization followed by rapid industrialization Urbanization rate: 37.0% in % in 2010 Industrialization rate: 36.8% in % in 2010 GDP per capita: $79 in 1960 $20,562 in (%) <Urbanization and Industrialization in Korea, > Urbanization rate Industrialization rate 12

13 Path of Korean Urbanization Mismatched demand and supply of urban land and housing - due to rapid urbanization and industrialization - caused the chronic appearance of land and housing speculation (%) Changes of Land Price Changes of Housing Price 13

14 4. Land Policy in the 1980s: Stabilizing the Land and the Housing Market resolved the mismatch problem of demand-supply of urban land increased the supply of urban land and housing - created Korea Land (Development) Corporation in 1978 ᆞincorporated into Korea Land and Housing Corporation in enacted the Housing Site Development Promotion Law in 1980 ᆞPublically Managed Land Development instead of Land Readjustment Project regulated the speculative demand for urban land and housing - prepared a series of anti-speculation measures in 1978 ᆞintroduced land transaction permit/report systems ᆞreformed capital gains tax and idle land tax - introduced Public Concept of Land Policy in 1989~1998 ᆞceiling of urban residential land holdings (up to 660m2 ) ᆞland value increment tax (50% of increment land value) ᆞland development charge (50% of development gains) 14

15 Legal System Legal Basis for Urban Development Name of Laws Choson (Korea) Urban Planning Decree Urban Planning Act Land Readjustment Act Housing Site Develop. Promotion Act Urban Development Act Duration Major development schemes Land Readjustment Projects: 1940s~1980s~ (suspended) ~ 2000~ Publically Managed Development Projects: 1980s~present 15

16 Development Method Land Readjustment Project (Land Readjustment Act, 1966) Land assembly process (land pooling & land readjustment) - landowners make their land available for development and receive in return, either serviced land or money in proportion to the value of the land they contributed to the project Self-financing project - 30% for infrastructure - 20% for development cost recovery - 50% for readjusted land to original land owners Benefits to public sector - saving costs for infrastructure provisions - saving costs for development due to self-financing Benefits to landowners: due to increase in land prices after the project Characteristics - no land acquisition and compensation, individual resettlement - institutional structures: share development gains with landowners & public developers 16

17 Development Method <LR Project: Example> Before After 17

18 Development Method LR Project Achievements LR project was primarily used for urban development until the early 1980s - public sector: 75.2% of project site, 86.2% of project areas Most land, from the inner area of big cities, was developed through LR projects <Land Readjustment Projects by Periods> 180 ( km2 ) Before

19 Development Method Publically Managed Development (PMD) Projects Some negative effects of the LR project: -development gains were returned solely to private landowners: primarily due to a lack of a relevant tools to collect capital gains - inefficient land use of serviced land: largely used for detached housing, which was unable to accommodate the increasing demand for urban housing Main features and characteristics of the PMD project: -develop Comprehensive Housing Construction Plan -chose developers from the central/local governments and public enterprises -implement project plans financed with individual developer funds -resell serviced land in the private market -development gains are used to lower the sales prices of land for low income groups (e.g.: sale price for land for public rental housing = 60% of development costs) 19

20 Development Method <PMD Project: Example of Bundang New Town> <Master Plan> <Before> <After> 20

21 Development Method <PMD Project: Example of Pyeongchon New Town> <Master Plan> <Before> <After> 21

22 Development Method <Publically Managed Development Project Achievements> ( km2 ) Before'50 50's 60's 70's 80's 90's 00's 2011 Rearrangement Project Public-managed Development Project Total 22

23 Development Method Role of implementers and regional distribution of PMD project Project implementer -public sector only: Korea Land and Housing Corporation and local government Regional distribution -Larger cities where the need for housing is urgent <Roles of Implementers and Regional Distribution of PMD Project> Local Governmen t 21% Local cities 29% Land Corporation 53% Housing Corporation 26% Seoul metropoli tan area 53% Other metropoli tan area 18% 23

24 Development Method As a result, the government tried to increase the supply of urban land - transitioned non-urban land into residential, industrial and social infrastructure < Supply of Urban Land & Urbanization Ratio > 10, , , , , , , , , , Urban land Urbanization rate Urban Land - Land for housing, industry, schools, roads, railroads, ditches, water supply, parks, gymnastics, parking lots, gas stations, warehouses & religion 24

25 Development Method Urban development and new town development projects contributed to the housing supply rate increasing to 100% in a relatively short period of time. <Housing Supply Ratio Trend> 120 (%) National-wide Capital area Seoul 25

26 Development Method Division of labor between land (public) and housing supply (private) After the 1980s, most urban land used for housing was developed by PMD projects Since then, the division of labor in urban development has been established, with: -land development being the role of the public sector, and -housing construction being the role of the private sector <Achievement of Housing Supply by Suppliers> (%) 1,200, ,000,000 Private sector Public sector Public sector Private sector , , , ,

27 Development Method Landowners are excluded from sharing development profits (compared to LR) - development gains are used to lower the sale price of land for low income groups and the public <Supplying Prices of Land Developed by PMD Location Projects> Purposes Seoul, Busan Big cities Others Lower than development costs Rental housing under 60 m2 60% 60% 60% Rental housing of m2 85% 70% 60% Public housing under 60 m2 Seoul : 95% Busan : 90% 90% 80% School 20-30% of development costs/free since 2009 Equivalent to development costs Land for detached housing to the original land owner Land for public facilities Market prices Land for detached housing Land for housing larger than 85 m2 Land for commercial 100% of development costs Appraisal prices Appraisal prices Bidding prices 27

28 As PMD becomes a dominant platform to conduct urban development, land acquisition and resettlement (LAR) simultaneously become more important - most land in Korea is owned by private individuals under the freehold system The government was forced to purchase land from private landowners - If land cannot be purchased by negotiated acquisition, a compulsorily purchase must be made according to the expropriation procedure, which is based on eminent domain <Ratio of Land Owned by Government> Land Acquisition and Resettlements 40 (%) korea Japan 28

29 Land Acquisition and Resettlements Legal Basis for LAR The Constitution (1948) -enabling the due process of law and just compensation The Land Expropriation Act (1962~2002) -defining public works that allowed for the exercise of eminent domain -the subjects and standards of LAR -compensation and resettlement procedures -grievance resolution process The Special Compensation Act (1975~2002) -general rules for negotiated purchases The Land Acquisition and Compensation Act (2002~present) -merged the Land Expropriation Act and the Special Compensation Act 29

30 Scope of Eminent Domain: Public works Land Acquisition and Resettlements 1. Projects for national defense and military affairs 2. Projects for infrastructure (railroads, roads, airports, dams, etc.) 3. Projects for public facilities (office buildings, plants, research institutes, etc. ) 4. Projects for education and arts (schools, libraries, museums, etc.) 5. Projects for housing construction and urban land development Quasi Eminent Domain powers to private developers To force minority owners to sell their land to majority owners - if the project is deemed to better serve public interest - and when the landowner possesses more than 2/3 of the project area or obtains consent from more than 2/3 of all other landholders The Urban Development Act (2000) 30

31 Performance of land acquisition and compensation Land Acquisition and Resettlements Total land acquisition (1980~2009) 4,768 km 2 ; annually 160 km 2 Purpose of acquisition (by acreage) - road (34.0%), housing sites (13.9%), industrial parks (7.1%), dams (7.5%), - national defense and military (13.6%), flood-control rivers (5.7%), agricultural water (2.4%), research and academic purposes (1.6%), waterworks and drainage (1.5%), parks (1.4%), railroads (1.2%), etc. Total compensation (1980~2009) trillion won; annually 7.9 trillion won Purpose of acquisition (by amount ) - housing sites (45.2%), roads (24.4%), industrial parks (5.5%), - dam construction (0.8%), research and academic purposes (4.7%), parks (2.0%), flood-control rivers (1.8%), railroads (1.8%), national defense and military purposes (1.5%), waterworks and drainage (0.9%) and agricultural water (0.3%) 31

32 Land Acquisition and Resettlements Performance of land acquisition and compensation Acreage of acquisition: roads account for the largest portion (34.0%) Amount of compensation: housing site development (45.2%) <Actual Record on Acquisition and Compensation for Public Works ( )> Acquired Area Amount of Compensation Others 38% Road 34% Others 24.1% Road 24.4% Dam 0.8% Dam 7% Industrial 7% Housing 14% Industrial 5.5% Housing 45.2% 32

33 5-1. Land Policy in the early 1990s Deregulation & Privatization of Urban Development catching up on the global trend of de-regulation and privatization - revised the National Land Use and Management Law in 1993 ᆞintroduced the Semi-Agricultural/Forest Zone ᆞde-regulated land use regulations in the Semi-Agricultural/Forest Zone ᆞallowed the private sector to develop land in the Semi-Agricultural/Forest Zone - softened anti-speculation measures negative results of globalization campaigns - foreign currency crisis in reckless development in the urban fringes in the late 1990s 33

34 5-2. Land Policy in the Late 1990s to overcome the foreign currency crisis, most anti-speculation measures: - removed regulations on the real estate market - opened up the real estate market to foreign capital investments ᆞthe Foreigner s Land Law in introduced real estate financing techniques ᆞABS (asset-backed securities) ᆞMBS (mortgage-backed securities) ᆞREITs (real estate investment trusts) ᆞREIFs (real estate investment funds) ᆞPF (project financing) 34

35 5-3. Land Policy in the 2000s: 1) Policy Measures for Sustainable Development to redress uncontrolled development - emphasizing sustainable development - introducing schemes that seek to "plan first - development later making the 4 th Comprehensive National Territorial Plan ( ) enacting the National Land Planning and Utilization Act of 2002 by integrating: the Urban Planning Law of 1962 & the Utilization and Management of National Territory Act of shift from urban planning to city planning - repeal of the Semi-Agricultural/Forest Zone - introduction of the 2nd type district unit planning system - introduction of the land suitability assessment system - introduction of the development impact fees system - application of the development permit system to rural areas 35

36 2) Enforcing Rational Land Use Planning Excluding special cases such as the military s purpose, various land use, development or conservation plans should be set up, and executed within the framework of urban (basic and management) plans under the National Land Planning and Utilization Act. In the step to set up the land use plan, infrastructure plans such as transportation should be simultaneously drafted to prevent disorderly developments due to insufficient urban infrastructure -without providing adequate infrastructure, no development project plan is approved Promote transparency of the land use regulations Make a database of the land use regulations, set up democratic procedures in assigning district zones, create objective standards to assign the district boundaries, and disclose the status of the district assignment 36

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38 6. Policy Implications Establishment of a legal foundation - Necessity to enhance the predictability of provisions and to minimize the discretionary power of relevant officials in land policy Establishment of a land information registration system - Land ownership registration - Land cadastre registration Establishing a functioning market - For countries where the land and real estate market is emerging, it is important to establish a functioning market that features a simple and transparent set of laws and regulations - To help the market function efficiently, a relevant information network should be set up. These include:. a land cadastral map, an ownership registration, and. a land use management system associated with land use policy, a land appraisal system, a land trading management system, and land use planning system, etc. 38

39 6. Policy Implications Urban planning in advance of urban development - Urban planning needs to be prepared before land development occurs - Loss of this timing will cost the whole society dearly in the near future Simplification of land use regulations - Simplification and integration of land use laws and regulations is essential for sustainable urban development - An excessive number of regulations may lead to undesirable urban development and reduce the effectiveness of regulations Detailed zoning regulations - Zoning regulations or land use regulations should contain sufficiently detailed guidelines to avoid rent-seeking activities - Synchronization of infrastructure provisions with housing development is essential in order that reckless development be avoided 39

40 6. Policy Implications Environmental aspects in urban development - Environmental aspects should be considered in region-wide planning, so that environmental sustainability can be achieved at the region-wide level Housing development with self reliance - Housing development should be coordinated with industrial development so as to reduce unnecessary commuting trips to the core city Coordination amongst government levels - More coordination is required at the regional level to prevent dysfunctional development in the urban fringes 40

41 6. Policy Implications Establishment of public enterprise for urban development - Specialized public enterprises to execute urban development and implement the concomitant resettlement measures efficiently - Korea National Housing Corporation (1963), Korea Land Corporation (1978), Korea Expressway Corporation (1969), etc. - The Government monitors whether urban development projects are conducted according to the legal framework and in a proper way Establishment of a specialized research institute - Requirement for highly specialized expertise based on appropriate research and teaching capacity - An Independent research institute, such as the Korea Research Institute for Human Settlements, is required to support the government and other stakeholders, and to enable the efficient implementation of land policy - Research for planning and policy development, teaching to train a cadre of public officials with land management, land use planning, land development and preservation skills, etc. 41

42 Thank You 42