The government is speeding up the creation of the third new towns to expand dwelling supply in the capital region, but attracting corporations and building industrial facilities to create jobs is progressing relatively slowly. As a time gap widens between dwelling supply and the creation of self-sufficient facilities, there are concerns that the third new towns could degenerate into bed towns for commuting to and from Seoul.
According to relevant ministries and others on the 30th, the Ministry of Land, Infrastructure and Transport approved a change to the district plan for the Hanam Gyo-san public dwelling district on the 8th, extending by two years the project period for an approximately 547,000-square-meter corporations transfer complex from the end of 2026 to the end of 2028. Earlier, Gyeonggi Housing & Urban Development Corporation said in 2022 that about 300 corporations hoped to transfer and that it planned to complete the transfer by 2027.
The background to the project's prolongation is delays in designating the corporations transfer complex and in compensation and relocation procedures. Because the corporations transfer complex was designated on average three years later than the main district where multifamily dwellings will be built, transfer, demolition, and construction are being delayed in succession. According to the Hanam City Council, as of last year the land compensation rate for the corporations transfer complex was 85%, but the compensation rate for obstacles was only 42.7%.
Incheon Gyeyang Techno Valley secured letters of intent to invest from six corporations, including KT, CJ, LG Uplus, and MBC, starting in 2021, but there has been no actual investment contract to date. According to Incheon City, KT put off moving in in 2024, citing organizational changes. High sales prices for industrial land and a lack of transportation infrastructure are cited as obstacles. Gyeyang is set to see first apartment move-ins in December, but the approximately 757,000-square-meter urban high-tech industrial complex only received overall plan approval at the end of August.
Goyang Changneung also lacks results in attracting corporations. In the Goyang City Council, criticism continues that responsibilities for attracting corporations are dispersed across multiple departments, preventing comprehensive management of performance. According to the Goyang Research Institute, of the approximately 1,124,000 square meters of planned self-sufficient land in Changneung, about 396,000 square meters (35.2%) is reserved land. Reserved land is standby land left without a predetermined specific use when developing a city or housing site, to respond to future changes in demand or unexpected facility needs. The institute analyzed that if this is converted to land for dwellings, the ratio of self-sufficient land would fall from 14.2% to 9.2%.
Namyangju Wangsuk attracted investments from large corporations such as Kakao, but actual project promotion is facing setbacks. Kakao signed a memorandum of understanding for "creating a digital hub" with Gyeonggi Province, Namyangju City, and the Korea Land & Housing Corporation (LH) in June last year, announcing it would build an AI data center in Namyangju Wangsuk worth about 600 billion won. When completed, this data center would be Kakao's second data center after "Kakao Data Center Ansan," which is currently inside the Hanyang University ERICA campus in Sadong, Ansan.
However, due to delays in administrative procedures related to the industrial complex, the groundbreaking originally planned for this year has become difficult. The fact that Namyangju City said it would reconsider building the data center is another variable. On the 20th, Namyangju City asked the Korea Land & Housing Corporation (LH) to reconsider the land supply conditions for attracting corporations.
Bucheon Daejang District is the only one among the third new towns where major efforts to attract corporations have led to actual contracts. According to LH and Bucheon City, in December last year four corporations—Korean Air Lines, SK Innovation, SK hynix, and DN Solutions—signed move-in and land sale contracts for industrial land totaling 132,432 square meters. The contract amount is about 410 billion won, roughly one-third of the total industrial facility land. These corporations plan to invest about 2.6 trillion won by 2030.
The third new towns were planned with a 13.8% ratio of self-sufficient land to resolve the separation of jobs and housing seen in past new towns. That is about double the 7.7% in the first new towns and 6.7% in the second new towns. The ratio of self-sufficient land was increased to attract corporations within the districts and create job-housing proximity cities where residents commute to nearby corporations.
However, with efforts to attract corporations lagging, concerns are growing as the government is even reviewing a plan to convert some self-sufficient land into residential land. Gyeonggi Province pointed out at a National Assembly forum last month that reducing self-sufficient land could deepen the separation of jobs and housing and hinder attracting anchor corporations.
Seo Jin-hyung, a professor in the real estate law department at Kwangwoon University, said, "The third new towns are unlikely to grow into self-sufficient cities in terms of scale," and added, "In the end, as in Korea's existing new town cases, they should be seen as moving toward bed towns."
