3. Seoul’s Land Readjustment with Gangnam Development
<Land Readjustment Module 3>
I will introduce to you Seoul’s Land Readjustment project. I will explain some legal environment. and the case of Sooyou, which was one of the earliest Land Readjustment projects. The flow, procedures of Land Readjustment in Seoul.
Many countries have similar ideas, but the procedures and the details of regulations are somewhat different for Seoul. And some achievements. As you can see, the legal term “Land Readjustment” appeared in the Urban Planning Act, enacted in 1962.
This act specified the procedures, site designation, land exchange and how to complete the process. We also see that an independent Land Readjustment Act was enacted in 1966. But as you can see from the statistics, the Land Readjustment project was one of the most important tools used in many cases.
We had 30 projects in the 1950’s, 121 projects by the 1960’s and about 600 projects nationwide later on. So even without the specific legal system many Land Readjustment projects were underway. And in its earlier stages, the ideas from Farmland Consolidation were adapted into the urban setting and the Land Readjustment Act developed later on.
While some may say that the legal groundwork for Land Readjustment was required first, the legal systems around Land Readjustment were developed later on based on Seoul’s experience of Land Readjustment. Although the legal environment may be important, it may not be a necessary prerequisite. This is the exemplary case of an early Land Readjustment project in Seoul.
The basic idea, in terms of physical setting, is the transformation from a non-urban to an urban land. Through Land Readjustment, Seoul aimed to formalize each parcel of land and construct orderly arranged roads and infrastructure for better city development. And Land Readjustment is a great way to acquire a “network” of public space, which is the base of a good city.
And especially, the most important characteristics of the project is that it is run without budget. So in terms of the physical transformation, the left is the parcels before Land Readjustment project. As you can see, there is only one public space in the middle and the rest of the areas are occupied by private owners.
These parcels in the middle of nowhere did not have proper access to transportation and it was hard to supply the necessary infrastructure. Such environment limited further development, further increase in productivity in terms of more housing and economic activities. But here after the land readjustment, there are lots of public spaces, which we usually call streets.
Although we call it a street, it is not only for cars and transportation. The streets are kind of the blood veins that deliver all the necessary nutrients to each cell. Suppose the parcels are cells and the streets are the major veins in trunk infrastructure, a network of public space. This vein delivers water, electricity, gas, communication as well as access to transportation.
Also, this network serves as a conduit for garbage collection and returning of waste water to the treatment system. With this public space network, each piece of land can do more than before. That’s the main idea behind Land Readjustment.
Land Readjustment increases land productivity as it can house more people and host commercial and industrial activities compared to a non-urban land. And Land Readjustment pools land of a neighborhood and land owners contribute some portion of their lands for free for the urban communities.
Some of you may wonder why the owners contribute their land to the public. This is because there is a trade-off where the reward is the increase in land value. For example, although you contribute half of your land to the public,with a better urban environment the land value, or price, increases by more than five times.
In case of Seoul, it increased about seven or ten times. So although you contribute half of your land, the value of land increases by five times. This is the engine that makes the Land Readjustment project work. The contributed land is partly used to build public facilities such as roads and parks at appropriate locations or partly sold for revenue to provide public service and infrastructure.
I want to emphasize the role of the street. Simply called a street, or a road, it is a public space. But the streets are not only for cars, but more importantly a key public space for public services. It is an artery for transportation, water, energy, communication, sewer and the subway system.
The most important characteristic of a public space is how it is networked. It’s not just a big chunk of land. Good cities need to have good networks of public spaces. This is the change in land use before and after Land Readjustment.
Around 90 percent of the land in Sooyou was privately owned before Land Readjustment but after the readjustment more than 40 percent of the land was secured for public space. This kind of transformation is inevitable in becoming a good city. In a good city, we should at least secure 40 or 50 percent of the land to be public, and only then can the city function properly. This diagram shows the financial aspect of readjustment. This shows where we can generate the revenue.
Most of the revenue comes from the resale of contributed lands. The resale revenue can cover all costs in the development including the road construction or development infrastructure. It is kind of a self-financing project.
Transformation can be brought about without public budget input. This kind of a scheme is referred to as “build together and benefit together”. Which means each individual, the private entity in a community, contribute to some part of a development and every individual can enjoy the benefits of the development project.
These are the numbers for the contribution and resale rates. These are projects in Seoul and the contribution rate ranges from about 40 percent to 70 percent at highest, which means that the owners contribute about two thirds of their land for the public.
Rate of land for sale is about a little higher than 10 percent so 10 percent of resale covered all the costs to build the community infrastructure. The revenue from the land sale was the key public financial resource for infrastructure and development.
Public infrastructure and facilities can be located in the right location. This is another important characteristic of Land Readjustment. I will explain some procedures. The first thing is who can drive this project. The legal system dictates that one of the four subjects can initiate a Land Readjustment project.
Land owners can start a Land Readjustment project and cooperatives, municipalities and sometimes the central government can run a Land Readjustment project. Cooperatives are established when more than seven landowners agree.
The cooperative may make internal rules and plan. Then the cooperatives can ask for permission on its own Land Readjustment project. Even though a cooperative can be established, they still have to work with the government in terms of permissions and regulations.
And these are the schematic procedure of a Land Readjustment project. Suppose there is pieces of land and the land owners. And the government has a very important role to designate which areas are applicable for Land Readjustment and also agreement from the land owners are required.
And after Land Readjustment, original owners receive a piece of their original land and some resale goes to the investors. The first key step in terms of legal framework is area designation where the government makes the project official. Designation defines which areas are needed to be readjusted.
It has a very important function. The designation allows Land Readjustment enforcement with super-majority agreement. This is a problem in Land Readjustment because in most cases there cannot be a 100 percent agreement from all owners
so we need some legal system to enforce the project.
This is a controversial issue and we may discuss it in detail later. We need some agreement from the owners. For the designation we need at least more than half owners in agreement and at least the two thirds or more of the total land area.
We also went through the public hearings, readjustment plans and public hearing again. There is another agreement that should be met after the plan is ready. The owners have to agree on the new plan then we can implement the actual development.
Finally, the revenue is used to implement Land Readjustment and public services.
Achievement. How much land is developed with Land Readjustment? Urban land supply by Land Readjustment project is 140 km2, which is about 40 percent of the urban land in Seoul. So about 40 percent of urban land nowadays is developed through Land Readjustment. And during the 1960’s and 70’s, we had large scale Land Readjustment projects and 20 projects over 100 hectares.
It was a large scale Land Readjustment. Another interesting characteristic is the project duration. Project duration decreased as citizen’s preference for the project increased. You can see that the duration drops from 14 years, 7 years, 6 years to 4 years because citizens are more and more aware of this process and they know the benefits and costs of the process. As their understanding grew, they began to agree with this kind of project.
And this is the picture of the Land Readjustment site in Seoul. From the 1950’s up until the 1980’s, you can see the scale of the development around Seoul city. It took place both in the existing old areas and new areas like the Gangnam area.
Gangnam area is here. Gangnam, in Korean Gang is the river and Nam is the south. So it refers to the area to the south of Han River. And also there are lots of newly developed areas that have been developed through Land Readjustment.