SPACE & ENVIRONMENT is primarily intended to help foreign experts and pro- fessionals in relevant fields understand overall present situations of spatial plan- ning and policy of Korea, and published bimonthly by KRIHS.
KRIHS is a government-sponsored research institute founded in 1978 to carry out research on territorial planning and poli- cies of Korea.
North Korean Cities’ Economic 1 Development Potential
and Future Tasks
Prediction of Land Use Change 5 through Spatiotemporal Pattern Analysis
Policy Direction for Changing 8 Housing Market Environment Real Estate Policies Tailored for 12 Regional Sub-Markets
International Collaboration 16 News & Announcements 19
If the reunification of the Korean Peninsula is to be a good opportunity for mutual development of South Korea and North Korea, it is necessary to prepare detailed visions and strategies to develop the North. This should be based on understanding the specific reality of North Korea’s situation. In this respect, one of the most urgent tasks is to identify areas of development potential of the North, and analyze the conditions of its national territory and urban areas. Doing so will help attract viable collaborative business opportunities between the South and the North.
Development Potential of North Korean Cities
Nampo and Sinuiju, hub cities located in the west coastal region, are among North Korea’s major cities. They include the highest priorities in terms of long-term economic development of the Korean peninsula and South-North cooperation. A 2010 survey of relevant experts, conducted by KRIHS, found that Nampo and Sinuiju, along with the Gaesung Industrial Complex, need development as they prepare to open up to the world. Indeed, the North designated Nampo and Rason as special cities in 2010, and agreed with China to jointly establish the Rason Special Economic Zone (SEZ) and the Hwanggumpyong Island Economic Zone in June 2011.
To identify the urban conditions of Nampo and Sinuiju, and to forecast and analyze urban development tasks that would emerge from a transition in North Korea, an analysis method based on a geographic information system (GIS) needs to be applied.
The Nampo metropolitan city (hereafter referred to as Nampo), located in the lower reaches of the Daedong River, is a gateway city connecting to the capital city of Pyongyang. Nampo has an area of 1,297 km2 with an estimated population of 980,000. Its urban land
Lee Sang-jun, senior research fellow
measures 70.3 km2, or 5.4% of the city’s total area, and is nestled along the Daedong River.
An old section of the city, located near the mouth of the Daedong River, takes up 40.5 km2in built- up areas.
Major industrial facility sites in the city, covering a total of 18.3 km2, is clustered in the vicinity of the port of Nampo. Military facilities, taking up 5.4% of the
built-up area, are situated mainly in mountains and hills, and within major industrial areas. The residential district, with rather modern-style homes, is concentrated mainly on Wau Island, located near the seaport. The residential facility sites, taking up 33.9 km2, have a net housing density of 289 persons/ha. The volume of housing reaches about 100,000 units, with a 49% housing supply rate.
Sinuiju, opposite the Chinese city of Dandong across the Amnok River, is the provincial capital of the North Pyeongan Province. The city measures 189 km2in area with a population of 360,000.
The urban site has an area of 26.4 km2, or 14% of the total 189 km2. Large agricultural areas are situated between the southern and northern part of Sinuiju. The city, heavily dependent on light industry, has an industrial area of 6.21 km2. It extends to the northern part of Sinuiju near the Amnok River, and the southern part of Sinuiju. The city’s housing volume consists of about 50,000 units, with about a 50% housing supply rate, similar to that of Nampo.
The future development potential of these two cities should be identified from three aspects: i) opportunities created from a transition in North Korea; ii) the geo-economic aspect; iii) the physical feasibility of land use development. Regarding the first aspect, the two cities have higher potential for future development in that they are positioned for easy access to the global market and have strength in light and service industries.
From the geo-economic perspective, Nampo and Sinuiju also have good potential for future development. The peninsula’s basic transportation network can be established with the axes of the West Coast, Gyeong-Won (Seoul-Wonsan)/ the East Coast, and Gyeong-Bu (Seoul-Busan). Therefore, the two cities, situated on the West Coast axis and
on the Seoul-Beijing transportation axis, will have greater geo-economic potential.
An analysis through the Korea Planning Support System (KOPSS) found that land areas capable of development in Nampo and Sinuiju are 89 km2and 15 km2, respectively. This suggests that an additional 7.4% of the 1,202.7 km2and 9.6% of the 156.9 km2of lands that are not included in built-up areas in Nampo and Sinuiju can be developed.
North Korean cities will undergo tremendous changes in the wake of a transition, which can be defined as multi-cores from the aspect of the urban spatial structure, as well as high density and diversification from the aspect of urban spatial use.
The common tasks required in developing North Korea’s urban areas can be predicted as follows. First, accumulating private properties will lead to a higher density in urban development and more diversified land use. Currently, the population density of Nampo and Sinuiju is 289 persons/ha and 271 persons/ha, respectively, far lower than that of Ilsan (530 persons/ha), a satellite city located northwest of Seoul.
Thus, when developing residential areas in urban areas of the North, it is highly likely that they will see a higher density in urban development than they do now.
Second, an increasing demand for leisure activities and cultural experiences will give rise to a higher demand for greenfield and brownfield spaces for cultural and leisure facilities. The existing industrial lands will likely be converted into residence, commerce/business, or leisure facilities.
Third, with rising income levels, quantitative and qualitative demand for infrastructure facilities will increase. In particular, demand for transportation, education and health related facilities is expected to soar.
Table 1: Urban Changes and Development Tasks
Urban changes Tasks in urban development
Multi-core Development of the edge of town(new town development) Development of city center(creating a subcenter)
High density Regeneration of residential areas Regeneration of industrial areas
Utilization of brownfield areas
Development of leisure and cultural facilities
Emergence of demand for various transportation systems
Fourth, various military facilities and munitions factories located in built-up areas will be decommissioned or transferred, making lands available for new development. Utilizing these brownfield sites will be one of the major tasks for urban development after the North’s transition.
Fifth, as income levels rise, demand for suburban development will increase. This should lead to greater demand for high-end housing complexes in Nampo and Sinuiju. Since the living conditions in built-up areas are poor, an increase in demand for high-end housing will spur new suburban complexes. In Nampo, there is potential for an additional 290,000 housing units and 840,000 residents, provided that housing complexes are built in areas available for development.
Sixth, one of the tasks that require extra attention in the process of urban redevelopment is that of preserving and restoring historic and cultural resources. Considering that urban regeneration activities focusing on
demolition would be a major tool for rapid development in the transition process, a related task is to come up with a methodically prepared development plan to prevent damage or loss of historical and cultural resources.
Seventh, it is necessary to prepare to deal with an increase in social and spatial inequality when developing cities in the future. Since investment and development will occur according to market principles, the gap between newly developed and underdeveloped regions is expected to grow.
Eighth, in response to the abovementioned tasks, we must secure relevant experts, establish urban administrative systems, and seek ways to finance related expenses.
The overall discussion on North-South economic cooperation includes the top priority of developing a special economic zone (SEZ). As with urban development in Nampo and Sinuiju, a viable short- and mid-term urban development project is to develop a SEZ over the next decade.
Future Tasks for Nampo and Sinuiju
Considering the overall conditions of industrial bases in Nampo, priority should be given to electrical, electronic, and automotive supplier facilities as manufacturing industries that can be suitable to the Nampo SEZ area. In developing the SEZ, it is necessary to package a project to improve deteriorated residential areas together with a residential development project. Capital funds for the projects can be solicited from the North Korean authority and private companies, and from the South-North Cooperation Fund.
Also, measures to secure project feasibility by linking the SEZ development with potential mining development and aggregates excavation projects in South Pyeongan Province can be considered.
For the Sinuiju SEZ, a more complex approach than that of Nampo is required due to its proximity to the Chinese port city of Dandong. That is, the
Figure 1: Long Term Development Prospect of the Korean Peninsular
SEZ should be developed on the basis of a global cooperation system, rather than cooperation between the South and North. Specifically, as a first step, a consortium consisting of the governments of the two Koreas and China, and private companies, should be formed. Considering its unique development conditions, Sinuiju should be developed as a complex free trade zone focusing on export-driven manufacturing, trade, logistics and
tourism. In this case, the challenge will consist of establishing a close industrial linkage structure to ensure that Sinuiju and Dandong do not compete with each other.
Since Dandong is attracting investments in the fields of automobile, electricity, energy, petrochemical, ships, paper, and furniture, Sinuiju SEZ should attract industries that are closely connected to those of Dandong. By linking these Table 2: Urban Development Tasks Following North Korea Transition
Items Detailed Items Tasks
Urban spatial structure New combination of urban spatial structure
To shift the structure from mononuclear to polynuclear To form a newly-emerged subcenter of city
Residence To increase development density of land for residential use
Commerce/business To form a commercial center in city center and a subcenter in built-up area
Industry To decrease industrial land in built-up area
To increase green fields and lands for leisure facilities caused by decreasing sites for industrial use and brownfield areas
Education To enlarge lands for higher education facilities Health care To expand land for health care facilities
Transportation To add more lands for roads and parking lots due to a growth in traffic
Energy/communication To build common ducts and district heating facilities
Culture To expand facilities for movie theatres, art galleries and concert halls
Water/sewage To install water and sewer pipes, water intake facilities and waste water disposal plants
Environmental cleanup To construct a waste disposal facility in a large area
Residential area To carry out a redevelopment project focusing on demolition and construction an apartment complex
Industrial area To shift industrial areas into an area for compound business and cultural facilities
Preservation and restoration of historical and cultural resources
To restore and preserve historical and cultural resources as a new cultural brand in a city
Utilizing brownfield areas
Areas used for military facilities To transform into educational facilities
Sites used for public facilities To utilize idle administrative offices for cultural facilities
Residential complex development in the suburbs
To develop a town house complex to meet the demand for luxury housing
Distribution complex development in the suburbs
To make mixed-use development of a large-scale shopping center and distribution complex
New industrial complex development
in the suburbs To develop with a focus on R&D for cutting-edge industry
Prediction of Land Use Change through Spatiotemporal Pattern Analysis
Kim Dae-jong research fellow, Koo Hyeong-su, assistant research fellow
As a result of the rapid progress of urbanization, farmland or mountainous land around a city is often converted into urban land uses as demand for urban land use increases. Thus, it is important to understand the direction of market forces or development pressures in order to cope with undesirable consequences stemming from urban land use, such as unplanned development and ecosystem degradation, as cities grow.
To date, numerous research efforts have focused on predicting land use change. Nevertheless, existing methodologies for predicting land use changes are not much practiced in real policy making because they have limited prediction accuracy. Most prediction methods of land use change rely on historical trends, but the patterns of land use change can vary according to urban policy or land policy.
Process of Land Use Change
Land use change involves a structural shift in land use from non-urban land (e.g., farmland and mountainous land) into urban land (e.g., housing, commercial facilities, and factories). This is accompanied by land development, which usually changes the physical characteristics of land use. In other words, the
undeveloped areas around a city are converted into urban land use through a land development process wherein the land is partitioned, divided, and combined to make the land viable for construction.
When a land developer does not own land that can be developed, the developer searches for land with development potential. Once the appropriate land is found, a contract to buy the land with the land owner is concluded. When the land is located in the land transaction permission district, permit must be acquired. After the land is purchased through a contract, the registration of title transfer should be done to transfer land ownership. Once the land developer acquires the land, various authorizations/
permits associated with development should be acquired. Acquiring permission for the development activity needs to be carried out when development is not promoted for the urban planning project over a certain size. When the land planned for development is farmland or forest land, permits for farmland conversion or forestry conversion permits need to be acquired. Such process is accompanied by the work of changing the land state and size for development wherein the land features change or the division and combination of land can be executed.
industries with a special zone for manufacturing, deteriorated residential areas in the northern part of Sinuiju should be improved. Since it shares a border with Dandong, Sinuiju should be considered as a site upon which to build a residential area for foreigners, a modernized apartment complex, hotels and shopping centers. In Nampo, mixed-use development will allow some of the profits from developing industrial, tourism, logistics and shopping complexes to be used to improve housing in the city’s built-up areas. This should be considered in Sinuiju as well. A comprehensive development project in the basin of the Amnok
River in cooperation with international groups and a linkage of the project with SEZs may be worthy of consideration.
The South Korean government should adopt a larger vision that includes China when planning urban development projects of North Korean cities.
In doing so, efforts should be made to map out a strategy for utilizing China’s potential and collaborating with the country in developing Nampo and Sinuiju.
Lee Sang-jun (email@example.com)
Spatiotemporal Pattern Analysis
Since land use change results in a process that changes the land’s physical shape, predictions as to when and where land development occurs need to be made. This is actually possible through analysing data accumulated in the process of land development, which signals that land development will occur. Such data include land use plan confirmation, land transaction data, title change data, and development activity permission data.
Of these, land transaction data are the most appropriate for understanding the land market and development pressure directions. They are the outcome reflecting the development possibility, land policy, and development plans. Land transactions can be divided into two types: simple transactions with no relation to land development and transactions for land development. Unlike simple transactions, transactions for land development tend to occur intensively in the spatiotemporal aspect.
To extract the relevant data, an exploratory spatial analysis method, e.g., a spatiotemporal pattern analysis, needs to be used. The data show that the areas in which land transactions occur more intensely in the spatiotemporal aspects will quickly experience land development, accompanied by land use changes. The spatiotemporal pattern analysis is a systematic concept used to characterize the developments of individual events and behaviors in a specific space and short period of time. It is useful for identifying special situations, such as
clustering land transactions into a specific area, with the aid of vast spatial data.
Land Use Change Prediction System
Currently, various techniques are being developed to analyze spatiotemporal patterns, including the Knox test and spacetime scan statistics. By utilizing the spacetime chain statistics, through which irregularly patterned spatiotemporal clusters can be explored, we attempted to predict the land use changes of Hwaseong City, Gyeonggi Province (see Figure 2). The spacetime chain statistics are actually a method of exploring the spacetime cluster by moving the cylinder-type exploration window in the form of a chain with the temporal threshold as the height and the spatial threshold as the width. This method searches for past events Figure 2: Land Use Change Prediction of Hwaseong City
Figure 1: Land Use Change Prediction with Spatiotemporal Pattern Analysis
Note: Red and blue colors indicate the spatiotemporal patterns of land transactions found in 2009 and 2010 respectively.
among the searched events and continues to reiterate the search process until no more new past events are found in the chained cylindrical moving window.
Based on the results of the land use change prediction system, the sporadic distribution of land use change throughout non-urban areas rather than in areas where development already occurred was confirmed. As such, reckless development that does not consider the environment in non-urban areas translates into environmental damages, insufficient infrastructure, and the distortion of the urban spatial structure. The analysis results suggest the need for planned land use management in non- urban areas.
Furthermore, the system helps predict the land use change that sometimes runs counter to the intent and guidance of the local government’s policy and monitors land markets by linking the spatiotemporal pattern analysis results of land transaction data together with Google Earth satellite images. For example, as shown in Figure 3, the Google Earth satellite image of the area in 2003 demonstrated that the spatiotemporal cluster occurred in farmland and mountainous land. However, the 2011 satellite image showed that new roads had been built and the surrounding areas had been transformed into residential areas and factories. As such, when the local government continuously monitors a region whose land use changes differ from the local government’s intent and guidance, it can help prepare for immediate follow-up measures according to the development plans and policy implementation.
Urban growth and rapid urbanization are inevitable modern phenomena. Against this backdrop, it is necessary to adopt policies to ensure smart growth in which ecological destruction can be minimized and the effectiveness of infrastructure maximized. In this respect, a prospective monitoring system to detect development pressure or predict land use change provides a greater scope for planning ahead to subdivide the use of land and establish infrastructure, including roads and sewage lines.
One of the advantages of predicting land use change is that it allows for more time to come up with political measures long before reckless and unplanned development occurs. Given that the development permit and approval system are not transparent, the prediction system of land use change will accurately identify which areas will be subject to reckless development. It is therefore advised that an area not suitable for development can be designated as a Development Impact Fee Zone while an area appropriate as a spatial hub for urban development can be designated as a Priority Funding Area. Also, it would be necessary to devise an early warning system for land speculation by analyzing spatiotemporal patterns in real time.
Kim Dae-jong (firstname.lastname@example.org) Koo Hyeong-su(email@example.com)
A Satellite Image of Google Earth on Oct. 15, 2003 A Satellite Image of Google Earth on Mar. 15, 2011
Figure 3: Result of the Spatiotemporal Pattern Analysis of Hwaseong City
Korean society has recently experienced unparalleled rapid aging, coupled with low birth rates. The increase of single- or two-person households is associated with the slowdown of the population growth rate. According to the “Population and Housing Census” published in 2000 by the Korean National Statistical Office, major changes in the population structure include a fixed low birth rate, decrease of youth population, rapid increase of elderly people (over 65 years old), continuous increase of population in the capital area, deepening gap in population between urban and farming areas, stagnation and concentration of economically active people (15~64 years old) in urban areas, stagnation of numbers of people who are economically active and are in the core housing purchase class (35~54 years old), and rapid increase of foreigners around the manufacturing industry areas.
The average number of members in each household decreased from 3.12 in 2000 to 2.69 in 2010 (on a nationwide basis); this was 0.16 lower than the estimated 2.85, because the typical household types and formations have changed rapidly due to low birth rates and increased aging.
Accordingly, the main household type that is
essential for the demand and supply of housing has also changed¡“from more than 5 people per household in the 1980s to 4 people per household in the 1990s and just 2 people per household in the 2010s.
Additionally, the data regarding change in household formation of the “Population and Housing Census” shows that the continuous increase of single- or two-person small households, a faster- than-expected increase of single-person households, rapid growth in the aging and female householders, rapid decrease in the number of households with more than 4 members, decrease of single-person households composed of members in their 20~30s, increase of single-person households consisting of family members aged 65 and older, and gradual increase of multi-cultural households.
Change in Population, Social and Economic Structures, and Housing Demand
The change in the Korean population structure and household formation is characterized by an aging population and an increase of single- or two-person households. This is expected to cause a change in
Policy Direction for Changing Housing Market Environment
Lee Soo-wook, research fellow
Changes in the proportion of elderly people (over 65 years old)
Changes in economically active people (up) and core consumption class (down)
Figure 1: Prospect of Changes in Korean Population
Source: National Statistical Office, 2011
housing demand and spending patterns and will exert great influence on not only the housing market but also the overall urban space structure. In particular, some factors including the slowdown of urbanization, increase of land use in city centers, growing demand for redevelopment and reconstruction, increase of demand for redeveloping the old centers of provincial or stagnant cities, and climate change concerns will change the conditions of using land in the center of the city.
Changes in the socio-economic environment, including population and household changes and slowdown of urbanization, inevitably cause a change in mid- and long-term housing demands. The Korea Research Institute for Human Settlements (KRIHS) analyzed housing demand using population and household, income, and destruction factors. It found that demand¡“which has been around 500,000 houses¡“is expected to decrease slowly by 2020, which is caused by changes in population, household, and income level. Among these factors, types of population and household in particular have a critical impact on the decrease in total housing demand. On the other hand, housing demand due to the destruction factor is expected to increase slightly, owing to the increase of aged houses and revitalization of city centers.
Regarding the type and size of housing, the data show that the demand for apartments and large houses will be reduced, while the demand for detached and small houses will increase. This means that national preferences for housing have been
shifting due to changes in socio-economic conditions. According to the “Investigation of National Preferences for Housing” conducted by KRIHS in April 2011, needs for aged and single- person houses and preference for small- and medium-sized houses and detached houses in the city have gradually increased. It also found that the purpose of purchasing houses has changed from
“investment” to “stabilization of family life.”
Mid- and Long-Term Housing Policies
Considering the changes in population and housing demand, the mid- and long-term housing policy in Korea should focus on housing supply according to changing consumer demand, residential stabilization for elderly people, maintenance and repair of existing houses, and residential stabilization for the low-income class.
Expansion of Small- and Medium-Sized Housing Supply
Rather than focusing on massive land development in new towns and suburbs, it is advisable to expand the supply of small- and medium-sized houses in the city. This is in response to the increase of aging and small households, the slowdown and stagnation of population growth, minimization of damage to non- developed areas, reduction of exploitable land outside large cities, and an increasing emphasis on the natural environment.
Changes in single-person household in each age group Changes in household type based on the number of household members
Figure 2: Prospect of Changes in Korean Household Formation
Source: National Statistical Office, each year
Development of Residential Stabilization Policy for Elderly People in the Post-Aged Society
Establishing the criteria for supportive housing on the basis of physical characteristics of elderly people is a matter of urgency. In particular, there is a need to support house remodeling for elderly people to help them comfortably reside in their existing communities. In particular, there is a need to provide care and support services for elderly people who cannot live alone any longer.
Moreover, a plan for compulsory application of a construction standard for senior housing should be in place before 2018. More specifically, a rule to make elderly housing mandatory should be phased in, including the installation of a senior care facility in any complex over a certain size. Laws related to the criteria for senior housing construction are also required, together with incentive measures.
Promoting a residential policy for elderly people effectively requires understanding the actual living conditions and possible changes in those over 55 or 65 years old by mapping the housing policies for elderly people by city, county and district. There is also a need to develop various housing models that consider the health issues of elderly people and establish a support system.
Promotion of Differentiated Housing Supply Tailored to Regional Housing Demand
In the capital area, particularly Seoul, the housing supply rate has not reached 100% because the housing inventory remains insufficient. Accordingly, it is necessary to continuously supply housing to the regions that are experiencing a shortage in home supply for the purpose of stabilizing the housing market and promoting housing security. Houses should be supplied to large city areas with a housing shortage, e.g., Busan and Daejeon. In small- and medium-sized provincial cities, there is a need to supply houses by re-zoning the old city center, repairing old houses, and utilizing empty houses.
Creation of Urban Residential Space for Demand
Housing market destabilization can be prevented by adopting a balanced housing supply and demand policy in which more houses are supplied to those areas with higher demand.
That requires improving the quality and quantity of national residential conditions by providing the size, location, and facilities desired by the consumer. For a high-rise apartment, a plan for remodeling¡“not reconstructing¡“it into a multi- purpose residential complex with commercial facilities on lower floors (1st~4th floors) and houses on higher floors should be considered. This is to provide both residential and commercial space within the center of the city. For small- and medium-sized provincial cities, multi-purpose
Ratio of the elderly population in Seoul Pie chart of the elderly population in Jecheon, North Chungcheong Province
Figure 3: Residential Status of Elderly People
Source: KRIHS, 2011
development featuring cultural and commercial facilities should be promoted by building lively pedestrian thoroughfares in the center of the existing area, mixed with shops and houses.
Reinforcement of Maintenance and Repair of Existing Houses
Thanks to efforts to expand the housing supply, Korea has secured about 15 million houses as housing inventory as of December 2011. Since the apartment supply sharply increased since the 1980s, it has been the representative housing type, accounting for 59% of the entire housing inventory in 2010. New urban development was in full swing and large volumes of apartments were supplied in the 1970s. Thus, the urban residential environment has seen a sharp increase in old houses built after the 1970s. To effectively manage the housing inventory, standards for both existing houses and newly built houses should be reinforced. Also, the life spans of existing houses should be extended with improvements, and new houses should be constructed with longevity and disaster prevention in mind. There is also a need to establish a policy for the improvement of national residential spending levels.
To this end, relevant policies should be improved to ensure that the groundwork for the smooth supply of healthy houses is laid and the residential environment is improved. In response to the demand for advanced housing types such as eco- friendly houses and leisure homes, there is a need to invest in Korean traditional houses, including reinforcing the safety standards against natural disasters, e.g., earthquakes, and floods, as well as suppressing the building of houses in high-risk areas.
Reinforcement of Low-income and Middle Classes’
There is a need to expand the supply of affordable good-quality houses in which ordinary people can lead comfortable lives. That requires a policy wherein the government subsidizes part of the price of public houses when they are put on the market at market price. Political support should be equally applied to the purchase of public, existing, or private houses, and be available to the consumer.
Additionally, there is a need to review the housing supply measure of leasing land, so as to ease the burden of housing expenses.
Improved housing security has a positive impact on the sense of community, education, and daily life (Lee Soo-wook, 2010). Thus, the government should promote the ratio of houses owned by low- income and middle class members to 65%, at the level of advanced countries. Additionally, the government needs to expand the public housing inventory to the advanced level (12% of the entire housing inventory by 2018), prepare a base for the fundamental stability of the housing rental market, and raise the housing security level of the low- income class.
As shown in the “2010 Population and Housing Census,” socio-economic environment changes, including more single- or two-person households, aging population, and decrease of actual income levels, suggest that the time of “Make and Sell” is long gone and the future housing market will take on a new aspect. There will be different aspects in the future housing market. Such expectations are nothing new, but there are many changes in essential housing demand and supply; even experts have difficulties predicting the future conditions.
The future Korean housing market will not experience sharp fluctuations, owing to the expansion of housing inventory and decrease in expectation of price increases. In the city centers, however, increases of demand for small houses, redevelopment, and reconstruction are expected.
The change in population structure and household formation will have an influence on housing demand and supply from a short-term perspective;
hence the change in the housing market. Note, however, that there is a relation with the “ghetto- ization” of a community or a city in the long-term perspective. Thus, it will be very important to perform the maintenance and repair of houses in the future housing market.
Deepening Division of the Real Estate Market by Region
The real estate market is divided into segments based on region, income, and real estate type due to its unique characteristics. These types appear in various forms of sub-markets. Accordingly, it is important to analyze the phenomenon occurring in the real estate market by identifying the sub- markets in each region and subsequently producing policy implications.
These various divisions have deepened, and the market conditions in each region have been increasingly differentiated. In the early 2000s, apartment complexes in the affluent southern district of Gangnam in Seoul set the tone of the real estate market. In the second half of 2008, however, the market was dominated by detached and row houses in the northern district of Gangbuk in Seoul.
Recently, the real estate market in the Seoul Metropolitan Area (SMA) has weakened, whereas the real estate market in the provincial areas has been relatively strengthened; housing sale prices are showing a downward trend, whereas housing rental prices are rising. The subdivided real estate sub-markets are inspiring new real estate terminologies, a unique phenomenon that changes as time passes. Examples include Gangnam 3-gus (or 4-gus) in the early 2000s, Bubble Seven Areas in SMA and non-SMA regions (Gangnam, Seocho, Songpa, Yangcheon, Bundang, Pyeongchon, and Yongin) in 2006, and house-poor or rent-poor, to name a few.
Currently, differentiation of the real estate market experienced in SMA is also being felt in provincial cities. Thanks largely to the doughnut phenomenon and new town development projects, existing city centers in provinces are declining, while new residential areas are emerging. Even in old and new city center districts, the contrast is pronounced between redeveloping areas and non-redeveloping ones. Such cases can be found in Dong-gu, an old city center of Gwangju metropolitan city and
Gwangsan-gu, a new city center of the city. On the other hand, a close analysis of the provincial real estate market indicates that some areas in a new city center still have poor residential environments, and some areas in the old section of the city center are still preferred by the middle class due to improved residential environment. As shown in Figure 1, the housing prices in Gwangsan-gu, which emerged as a new city center of Gwangju metropolitan city, have largely increased, whereas Docheon-dong in Gwangsan-gu has the lowest housing prices in the city. The housing prices in Dong-gu have dropped, but Gyerim-dong also located in this area is one of the three areas in Gwangju metropolitan city experiencing the highest rises in housing prices. As found in previous studies, this points to the possibility that a subdivided sub-market exists, based on micro-level spaces as a basic unit, i.e., eup, myeon, and dong. This suggests the need to conduct a more micro-level, precise analysis of the real estate sub-market.
Considering the deepening division of the real estate market and the subdivision of sub-markets, it is important to find optimal policy implications by identifying and analyzing the subdivided real estate sub-markets in each region. Most existing studies have targeted a wide range of markets, at a macro level.
Classified Cases of the Real Estate Sub-Markets
Three areas including SMA as a mega city, Gwangju metropolitan city as a large provincial city and South Jeolla Province as a provincial city were selected to identify the real estate market in each region and classify them. First, the specific variables of the real estate market which reflect population, household and housing characteristics, and location characteristics were identified by reviewing existing documents, including previous studies and foreign examples. These characteristics include age, income, housing type, and real estate price. Then, the variables were categorized under a
Real Estate Policies Tailored for Regional Sub-Markets
Park Chun-gyu, associate research fellow, Gwon Soo-yun, assistant researcher
series of criteria, arranged with factor analysis, and used to analyze the characteristics of sub-markets to explain the distribution characteristics of each factor variable. This included a process of grouping similar areas by performing cluster analysis to identify the real estate sub-markets. After the identification and analysis of sub-markets, an effort was made to verify and supplement the result of analysis with the support of field investigation and expert interviews.
As a result of the sub-market analysis, 6 sub- markets each were drawn from Seoul and Gwangju, and 4 sub-markets were drawn from South Jeolla Province. The result of analyzing 6 sub markets in Seoul is shown in Figure 2. The Z-Score and Penetration Index (hereafter referred to as P-Index) of each variable were calculated to explain the characteristics of verified sub-markets from the analysis results. The level of Z-Score of certain variables (e.g., amount of aged population or new housing) can explain whether a variable feature of a certain sub-market is predominant or not.
However, the absolute value of the Z-Score has limitations in reflecting a variety of phenomena, including higher population mobility in heavily populated areas and greater variety of housing types in areas with high concentrations of housing. For example, if a market that has a greater population than other markets, including more elderly residents and children, it is hard to explain whether the market really has a large population of these age groups for a certain reason or if it is merely that the large population is the reason. To compensate for
such limitations, the P-Index was used to help compare relative features (similar to the ratios of aged population or of new housing).
The result of analysing sub-market features through Z-Score and P-Index showed that the suggested six submarkets in Seoul were located in employment-centered areas, dotted with many single-person households, rental households and old housing. To classify individual sub-markets identified with cluster analysis and build a profile, criteria for classifying real estate sub-markets by region were established. First of all, for SMA regions, the progress of city center regeneration becomes a critical standard for classification. Even though the existing city center and residential areas in the SMA are deteriorated, regeneration activities in the area are stronger than ever, because there is insufficient new land for development.
On the other hand, for large provincial cities such as Gwangju metropolitan city, the emerging and existing residential areas are very important in classifying the market. In large provincial areas, there are relatively many developable lands, so there are more opportunities to form new residential areas rather than relying on the regeneration of the existing city center.
For provinces such as South Jeolla Province, the real estate market is classified by the characteristics of employment-centered or farming and fishing areas. For provinces, the residential areas where population and households are concentrated are formed in the employment-centered areas and its environs. But the farming and fishing areas have Figure 1: Real Estate Sub-Market Subdivision: Gwangju Metropolitan City
Source: Kookmin Bank
Gu Dong Apartment Price Per m2
fewer overall households, with a greater percentage comprised of the elderly population, and a large number of old houses.
The real estate sub-market was categorized by putting together the results of market analysis, field investigation, and expert interviews in accordance with these criteria for real estate sub-market categorization. Thus, the 12 sub-markets were organized as shown in Table 1.
Finally, tailored policies can be established in
accordance with each characteristic of the categorized real estate sub-market. For example, for the existing residential area where the regeneration of the city center proceeds or is expected to proceed, there is a need to continue to promote regeneration. At the same time, there is also a need to supply new houses through redevelopment in areas close to employment- centered areas, since those areas are likely to create new demand. For strongly functioning residential areas, the regeneration of the city center should Figure 2: Real Estate Sub-Market: 6 Sub-Markets in Seoul
Seoul Cluster 6
Km 10 7.5 5 0 1.25 2.5
Location of sub-markets
Gu-Goon Eup・・Myeon・・Dong Gu・・Gun Eup・・Myeon・・Dong
Guro-gu Guro 3-dong, etc. Yeongdeungpo-gu Yeouido-dong, etc.
Secho-gu Seocho 3-dong, etc. Gangnam-gu
Nonhyeon-dong, Yeoksam-dong, Samsung-dong, etc.
Jongro-gu Jongro 1~6 Ga-dong,
etc. Jung-gu Myung-dong, Hoihyun-
dong, Uljiro-dong, etc.
-3.00 -2.00 -1.00 0.00 1.00 2.00 3.00 1
-3.00 -2.00 -1.00 0.00 1.00 2.00 3.00 1 2 3
4 5 6
9 10 11 12 13 14 15 1716 1918 21 20 2322 24 25 26 27 28 29 30 31 32
-300 -200 -100 0 100 200 3001 2 3
9 10 11 12 13 14 1615 1817 2019 2221 23 24 25 26 27 28 29 30
31 323334 35
Z-Score: factor variable Z-Score: individual variable P-Index: individual variable
Note: 1) The red-lined area means the eup, myeon, and dong included in individual sub-market.
2) Korea’s municipal-level administrative divisions: si(city), gun(county), gu(district), myeon(township), dong(neighborhood), ri(village) 3) The figures of the radial graphs are numbers of each variable, through which absolute and relative features of sub-markets can be visually
ideally be promoted by encouraging the resettlement of natives and through revitalization of the community. For the area where single-person households are concentrated and which is employment-centered, there is a need to supply office-housing unit types; urban residences and studios should ideally be supplied to meet the needs of a small household. For the emerging residential area that is employment-centered and with many households, there is a need to pay particular attention
to the management of speculative forces due to the relatively better residential conditions that will attract a huge influx of the population. Additionally, there is a need to provide a continuous housing supply with future land development.
Park Chun-gyu(firstname.lastname@example.org) Gwon Soo-yun(email@example.com) Table 1: Categorization on Real Estate Sub-Markets
Classification Market Type Major Characteristics
Existing residential area where the regeneration of city center progresses (or is expected to progress)
Existing residential area where old houses are concentrated and area with influx of new demand with the population and households expected to increase because the regeneration of city center progresses (or is expected to progress)
Existing residential area where the population is concentrated and which is apartment-centered
Existing residential area where comparatively old apartments are concentrated and where demand for remodeling and reconstruction is increasing
Existing residential area that is detached house-centered and where rental housing is concentrated
Existing area where detached houses are concentrated and which is preferred by rental households
4 Existing high-income and
expensive residential area
Areas with higher income and lots of expensive medium- and large- sized houses like Gangnam in Seoul
Area that is employment-centered and where single-person households are concentrated
Employment-centered area with lots of jobs and which has a large number of small-sized and rental houses for single-person households
6 Existing small-sized and rental housing-centered residential area
Large elderly population and large number of single- or two-person unmarried young households owing to the large number of small-sized and rental houses
7 Existing old houses-centered residential area
Areas where old houses are concentrated and which have a large elderly population
Emerging residential area where the population is concentrated and which is apartments-centered
Newly formed apartments-centered residential area where people with relatively higher income are concentrated
9 Employment-centered area with smaller number of households
Areas located in the old city center or industrial complex and with a small number of households and many old houses compared to the total number of houses
Existing residential area that is employment-centered and which has a large number of households
Employment-centered area with a larges number of jobs, office-house coexisting area with a large number of households
Emerging residential area that is employment-centered and which has a large number of households
Newly formed emerging residential area to meet the excessive demand in the existing residential area, which is an employment-centered area with a large number of jobs
Farming and fishing area where the elderly population and old housing are concentrated
Small population and small number of households because it has many characteristics of farming and fishing area; relatively larger elderly population and more old houses
KRIHS Pledges to Contribute to Economic Growth in Developing Nations
On March 20-21, 2012, KRIHS officials attended the World Bank’s South Asia Region Urbanization Knowledge Platform (UKP) launching seminar, held in Colombo, Sri Lanka.
In attendance were representatives of South Asian countries including India, Afghanistan, Nepal, Bangladesh, Bhutan, Pakistan, Maldives, and Sri Lanka, and experts of the World Bank.
The seminar, one of UKP’s last launching events in various regions, discussed three themes: Inclusive Urban Growth; Urban Development and Climate Change; and Urban Regeneration. Abha Joshi-Ghani, World Bank’s sector manager, introduced UKP, noting that global partnership is a central element of solving urbanization issues. He also noted the need for an index for sharing and evaluating information on urban issues.
In a special lunch session arranged for KRIHS, Dr. Sakong Ho-sang, head of GDPC, introduced KRIHS, and Dr. Kim Dong-ju delivered a presentation on “Strategies and Issues on National Territorial Planning and Urban Development in Korea,” which was well received by participants.
KRIHS discussed ways to contribute to the national development of developing countries in the South Asian region, and promised to share the experience and knowledge that led to Korea’s national territory development.
KRHIS discussed ways to contribute to the development of South Asian countries in
individual meetings with the representatives of those countries. They all agreed on creating a partnership network between the South Asian UKP and the East Asian UKP, paving the way for partnerships with experts and governmental officials from India, Bhutan, and Nepal—countries known to have had difficulties forming networks.
Afterward, KRIHS visited the UDA, the Premier Urban Planning Agency in Sri Lanka, which has a keen interest in the housing sector.
The agency expressed a desire to learn more about Korea’s development experience through close collaboration with KRIHS.
Korea and Japan Hold Workshop on Urban Development Cooperation
On March 22, 2012, the Ministry of Land, Transport and Maritime Affairs (MLTM) hosted a seminar on the 29th Korea-Japan Urban Development Cooperation Dialogue, in conjunction with the Japanese Ministry of Land, Infrastructure & Transport. The seminar addressed a variety of issues, including urban policies to cope with climate change, urban development methods to preserve nature and culture, and urban transportation policies. Jeong Youn-hee, associate research fellow of KRIHS, presented on “Compact City: Tailored Application to Korean Circumstances and Review,” explaining that different approaches according to characteristics and features of spatial scope are taken in applying the concept of a Compact City. This concept is regarded as a strategy rather than an ultimate goal for Korean urban policies. She added that further discussions and assessments are needed regarding concrete applications and best practices for Korean compact cities.
ADB Seeks Further Cooperation with KRIHS
On April 9, 2012, Mr. Scott Ferguson, Senior Expert in the East Asia Region of the Asian
Development Bank (ADB), visited KRIHS to further discuss additional consulting projects in the wake of the success of the ADB-Mongolia policy consulting project of March 5-9, which was highly evaluated.
After the courtesy visit to KRISH President Park Yang-ho, Mr. Ferguson met with Director of GDPC Sakong Ho-sang, Dr. Lee Sang-keun and Dr. Jo Jin-cheol to discuss further cooperation between ADB and KRIHS. They discussed the potential and the requirements in order for KRIHS to be ADB’s core partner in conducting various training and research projects.
KRIHS and NILIM Anticipate Future Cooperation
On March 16, 2012, a delegation of engineers from the National Institute for Land and Infrastructure Management (NILIM), led by director Shibata Yoshiyuki, visited KRIHS.
NILIM, which is under the Ministry of Land, Infrastructure, Transport, and Tourism, is acknowledged as a leading think tank in the civil engineering sector. NILIM presented an index and method for its developing land suitability assessment system. Unlike Korea, Japan’s land suitability assessment utilizes index and assessment standards that are intended to be qualitative and subjective.
KRIHS, based on its own relevant experience, gave feedback on the NILIM is system. The two institutes discussed collaborative efforts such as conducting joint research projects, co-hosting seminars, and exchanging human resources, and plan to sign an MOU.
GSD Visits to Discuss National Territorial Development Policies
On March 13, 2012, a group of 8 people from Harvard University led by Peter G. Rowe, dean of Harvard’s Graduate School of Design (GSD) visited KRIHS to participate in a seminar on strategies and policies for national territorial development. From KRIHS, Dr. Kim Dong-ju introduced Korea’s experience in establishing national territory policies. In the seminar, the visiting group and KRIHS had a heated debate on the process of paradigm shift in national territory policies, comparison of the relevant polices with other nations and future directions towards environment friendly national territory policies. They also discussed ways of how GSD can contribute to the operation of the Global Development Partnership Center (GDPC) and decided to promote collaboration between KRIHS and GSD.
Policy Advisory Course for High-level Officials from Mongolia
KRIHS organized a policy advisory course for high-level officials from the Ministry of Road, Transportation, Construction, and Urban Planning (MRTCUD), Mongolia, for five days starting March 5, 2012. The program, funded and commissioned by the Asian Development Bank (ADB), aimed to improve laws and systems in land expropriation, resettlement and land management of Mongolia. The delegation led by Bold Tsengel, vice minister of the MRTCUD, followed an itinerary jam-packed with lectures, visits to relevant institutions and
companies, and field trips.
On the first day of the event, the delegation attended a seminar on Korea’s national territory plans and new town development projects, delivered by Dr. Kim Dong-ju and Dr. Lee Bum-hyun. Afterward, they met with Han Man- hee, Vice Minister of the Ministry of Land, Transport and Maritime Affairs (MLTM), and were informed about laws related to urban development and relevant institutions.
The second day focused on the issues of land expropriation, resettlement and land compensation. The group visited the Korea Association of Property Appraisers (KAPA) to attend a lecture on land expropriation, and met with a company about the use of Geographic Information Systems (GIS). Later, the group attended a seminar about technical issues on land management information systems.
On the third day, the delegation visited relevant institutions including Korea Land and Housing Corporation (LH), Central Land Tribunal and Korea-Housing Finance Corporation to learn more about Korea’s land expropriation and compensation system, and how to raise funds for the housing supply.
The fourth day featured lectures and a field trip. Dr. Kim Dae-jong and Dr. Kang Mi-na lectured on Korea’s land management using GIS, the housing supply, and the housing financial system. The delegation visited the construction site of the multi-functional administrative city, about 160 kilometers south of Seoul.
On the last day, the Mongolian delegation and KRIHS discussed measures to enhance
cooperation among MRTCUD, KRIHS, and MLTM in the fields of land policy, national territory information system, and spatial information infrastructure, among others.
The meeting also addressed the possible role KRIHS can play as policy advisor in the abovementioned fields; measures to implement projects, such as cooperation with Korean consultants, joint research and organizational training programs and seminars; and how to fund the abovementioned projects.
TAMU CHSD-KRIHS Launch Joint Workshop on Health & Longevity in Cities
On March 9, 2012, the Center for Healthy City Studies of KRIHS held a workshop in conjunction with the Center for Health System
& Design (CHSD) at Texas A&M University regarding research directions for the health and longevity of cities in the US and Korea. In the conference hall at the CHSD, Dr. Kim Eun- jeong presented on “Aging Population in Korea and the Need for Forming Cities Of Health &
Longevity.” Professor Chanam Lee, Texas A&M University, presented on the Active Living Research Program conducted by CHSD.
Professor Susan Rodiek, Texas A&M University, made a brief presentation on
“Access to Nature for Older Adults: Promoting Health through Landscape Design,” a study that received a 2010 ASLA Professional Award. Participants pledged to foster continuous exchange through related joint research.
Training Program for Nepali High-level Officials Kicks off
As part of the Lumbini World Peace City master plan project, KRIHS hosted a capacity-building program for high-level officials from Nepal for eight days starting May 7, 2012. Funded and commissioned by Korea International Cooperation Agency (KOICA), the program aimed to formulate visions and strategies for Nepal Lumbini’s master plan. It introduced Korea’s national territorial planning and preservation policies for historic regions and invited Nepali officials to visit urban development sites for Korean historic and cultural assets.
The event, attended by four Nepali government officials in charge of national territorial planning or cultural heritage, featured eight lectures, discussion sessions with MLTM, study visit programs, and three days of field trips.
The eight-day event started with welcoming remarks by the KRIHS president, a formal reply by the secretary of the Ministry of Federal Affairs, Constituent Assembly, Parliamentary and Culture of Nepal, and the introduction of KRIHS. A series of lectures explained Korea’s policy on world heritage, land, housing, intangible heritage, underground heritage management preservation of historical resources, transport and infrastructure development, etc.
For the study visits, the participants visited Seoul City and toured the Seoul Museum of History, Changdeokgung palace, Bukchon Hanok village, and Insadong, a destination famous for art and antique products. They also made the three-day trip to Ulsan,
Pohang, home to globally renowned companies including Hyundai Motor Company and POSCO, and the historical city of Gyeongju to visit Seokguram Grotto, Bulguksa Temple, and the royal tomb of Daeneungwon.
The capacity-building program was a great opportunity for Korea and Nepal to better understand each other and to lay the foundation for further collaboration.
OECD Urban Policy Review of Korea 2012 Unveiled
On April 27, 2012, KRIHS and the Ministry of Land, Transport and Maritime Affairs (MLTM) hosted a conference on the OECD Urban Policy Review of Korea 2012, a report commissioned by the Korean government. In celebration of its publication, the event aimed to share information in the report and discuss future directions of Korea’s urban policy. It featured two sessions: a presentation of the OECD Urban Policy Review of Korea 2012, and a seminar on strengthening urban competitiveness and promoting green cities.
Dignitaries including Kwon Do-yup, Minister of MLTM, Angel Gurría, OECD Secretary-General, Hur Kyung-wook, Korean Ambassador to the OECD, and Park Yang-ho, president of KRIHS, attended the first session. The OECD Secretary- General introduced the content of the report, then conducted a Q&A session.
In the second session, Joaquim Oliveira Martins, Head of the Regional Competitiveness and
N N EWS & ANNOUNCEMENTS
Governance Division at the OECD, presented on the importance of regional-based development polices.
Dr. Park Se-hoon introduced Totatoga, Busan’s downtown cultural cluster to facilitate urban regeneration. The subsequent in-depth discussion focused on future urban policy directions and the significance of the report’s publication.
National Urban Disaster Prevention Research Center Opens
On April 6, 2012, the Urban Disaster Research Center began operation. Its mission is to provide political and technological support in dealing with urban disasters caused by climate change.
Recently, government agencies have agreed on the need to cope with a rapidly changing climate, which leads to increased frequency of natural disasters and greater scope of damage. Accordingly, the Prime Minister’s Office decided to establish a center dedicated to urban disaster under KRIHS. It is one of various efforts to formulate comprehensive measures to manage natural disasters caused by climate change.
KRIHS members and relevant government
officials attended the opening ceremony. They included Park Yang-ho, President of KRIHS; Park Jae-jil, vice president of KRIHS; Dr. Yoo Jae-yoon;
Han Man-hee, Vice Minister of the Ministry of Land, Transport and Maritime Affairs (MLTM); and Ha Soo-young, Director of Disaster Management Task Force Team in the Prime Minister’s Office.
To mark and celebrate the opening of the National Urban Disaster Prevention Research Center, the seminar on “Measures to Safeguard a City from Natural Disasters” was held. The seminar featured three presentations: safeguarding a city from natural disasters, by Mr. Jeon In-jae, MLTM; current water disasters in Seoul and countermeasures, by Dr. Shin Sang-young, Seoul Development Institute; and the role and tasks of the Urban Disaster Research Center, by its leader Dr. Shim Woo-bae. After each presentation, participants including Professor Song Jae-woo from Hongik University engaged in in-depth discussions about paradigm shifts in urban disaster prevention measures, long-term disaster risk management, and ways to collaborate between the center and government agencies.
Korea Research Institute for Human Settlements (KRIHS) is committed to improving knowledge and understanding of the conditions and problems of the nation’s resources and their interactions with people. It assists the government in formulating long-range development plans and makes policy recommendations on related matters.
KRIHS carries out various activities to collaborate with the international research community in solving theoretical and practical problems concerning human settlement issues and planning. Also, it provides research expertise and consulting services along with training programs for foreign governments and institutions.
Copyright c June 2012
Korea Research Institute for Human Settlements
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E-Mail: firstname.lastname@example.org Homepage: www.krihs.re.kr Publisher: Park Yang-ho Editor: Kim Hyun-sik Editorial Committee:
Cho Chun-man, Chung Jin-kyu, Jeong Youn-hee, Kang Mi-na, Kim Eun-jung, Kim Kirl, Kim Myung-soo, Lee Sang-gun, Lee Pan-sik, Lee Yoon-jeong, Min Seong-hee, Yoon Ha-jung
KRIHS GAZETTE June, Vol. 49