South Korea's new town projects stalled by 23-month land compensation delays

Land compensation for South Korea's third phase of new town developments in the Seoul metropolitan area is taking an average of 23 months, significantly hindering the government's push for rapid construction. This prolonged process is raising concerns about the potential for further delays in housing supply and exacerbating instability in the capital region's housing market.

Data from the Korea Land and Housing Corporation (LH) reveals that the six new town districts, Goyang Changneung, Namyangju Wangsuk 1 and 2, Bucheon Daejang, Hanam Gyosan, and Incheon Gyeyang, averaged 23 months for land acquisition. Hanam Gyosan district alone required 33 months for its compensation procedures. In the Goyang Changneung district, 45% of cases involved failed negotiations, necessitating applications for land expropriation by the government or local authorities, which further extends the construction timeline.

The Moon Jae-in administration announced the third new town initiative in December 2018, aiming to supply 122,000 homes and targeting sales by 2021. However, the earliest sales for the Incheon Gyeyang district are scheduled for September 2024, with the first move-ins expected by the end of this year. This timeline suggests a minimum of eight years from candidate site announcement to resident occupancy.

Efforts to expedite the process, such as offering cooperation bonuses for residents who agree to compensation quickly, have been proposed but have not yet passed the National Assembly. A system to impose penalty payments on those refusing to vacate is slated for implementation only by the end of the year. For newer sites announced later, the risk of repeating these compensation delays is high, potentially impacting the government's ability to deliver on its housing promises and stabilize market prices.