Ministry of Land's Public Contribution Guidelines, Principle of Burdening within 70% of Land Development Price Increase
The Ministry of Land, Infrastructure, and Transport has established the 'Public Contribution Guidelines' to strengthen the predictability and public interest of urban development.
These guidelines provide criteria for reasonably sharing the profits generated during the land development process with the local community and plan to legalize them to enhance the stability of the system.
In particular, this measure focuses on minimizing confusion between private developers and local governments and ensuring that the burden of public contribution does not excessively increase or raise concerns of preferential treatment.
Public Contribution Limited to 70% of Land Price Increase
According to the recently announced guidelines, if construction restrictions are relaxed due to the designation of district unit plans and spatial innovation zones, a portion of the resulting land value increase can be recovered in the form of public contribution.
The burden of public contribution is generally limited to within 70% of the land price increase, although the local government may impose up to the legal limit of 100% if special reasons are presented.
This change is expected to provide clearer burden predictions for developers, enabling local governments to secure funding necessary for the expansion of public facilities and infrastructure. Consequently, it is anticipated to contribute to regional development and the enhancement of public welfare.
Redevelopment and Reconstruction Projects Excluded from Guidelines
These guidelines apply when urban planning changes occur through district unit planning or spatial innovation zones. However, redevelopment and reconstruction projects are not subject to the public contribution system under the National Planning Law and therefore are not included in these guidelines.
As a result, existing urban maintenance-type projects continue to be operated under separate procedures and laws, and there is no impact from these guidelines. It is necessary to recognize this point and proceed with related projects accordingly.
Clarification of Public Contribution Methods and Reduction Criteria
Public contributions can be made in various ways. For example, providing land for public facilities, installing facilities, and covering the costs required for installation are possible methods. However, facilities exclusively for residents are excluded from these public contribution items.
Additionally, regulations are established to reduce or exempt the burden of public contributions in specific situations. Considerations for relief include the supply of public rental housing, job creation within the region, and low-profit or non-residential centered developments. Exemption or reduction targets include development projects in areas with declining populations or projects implemented by public institutions and public enterprises.
These regulations help ensure that the application is more flexible to meet regional characteristics and policy goals.
Securing Objectivity in Land Price Increase Assessment
The land price increase, which forms the basis for public contribution, is determined through appraisal. The evaluation points are clearly divided.
Firstly, the prior evaluation occurs the day before the public notice and announcement of the plan, while the subsequent evaluation is conducted on the decision and announcement day of the plan.
To ensure a fair evaluation, two appraisers are selected by lottery, and the arithmetic mean of the evaluation amounts they propose is applied. This procedure helps prevent subjective evaluations by local governments and minimizes disputes between businesses.
16 Leading Projects in Spatial Innovation Zones... Expecting Acceleration in Promotion
The establishment of this guideline is expected to have a positive effect on the promotion of 'Spatial Innovation Zones,' where density and use regulations will be significantly relaxed.
In July last year, the Ministry of Land, Infrastructure and Transport selected 16 regions nationwide as leading project candidates for spatial innovation zones, and currently, local governments are preparing development plans.
Here is the list of 16 candidate sites.
In Seoul, Seocho District Office, Gimpo Airport, Doksan Military Base, and Cheongnyangni Station are included. In Busan, Yeongdo District and Geumsa Parkland have been nominated, while Incheon Station has been selected in Incheon. In Daejeon's case, Banseok Station has been identified, and in Gyeonggi Province, Gwangmyeong Station, Deokjeong Station, and Uijeongbu Station Neighboring Park are included. Ulsan's Unyang Temporary Intercity Bus Terminal has been nominated, while Chungbuk's Cheongju Teacher's Cooperative Association has been included, Gyeongbuk's Sangju City Hall, and Gyeongnam's Tongyeong Shin-A Shipyard are also among the sites. Finally, the Busan-Yangsan area has the Busan National University Yangsan Campus selected as a candidate site.
These areas have been evaluated as central areas with good transportation convenience, idle national and public lands, and a significant need for maintenance. As the criteria for public contribution become clearer, negotiations between local governments and private developers are expected to become smoother, leading to an acceleration in project promotion.
Future Legislation and Accelerated Promotion of Spatial Innovation Zones
The Ministry of Land is planning to test-run this guideline and then legalize it by incorporating feedback.
In particular, it is expected that this guideline will provide a reasonable criterion for planned profits in the promotion of the leading projects for the 16 spatial innovation zones selected last year, thereby reducing conflicts and speeding up decision-making.
The head of the Ministry of Land, Architecture, and Urban Affairs stated, “From now on, development projects that balance public interest and profitability will be the regional growth engine,” and noted that, “By making the social return of development profits under clear standards, uncertainties will be reduced and trust will increase.”
Institutional Foundation for Coexistence of Development and Public Interest
The newly established guidelines represent an important starting point for fairly sharing the profits generated from development projects with the public and enhancing the public's interest in urban planning.
Now, local governments can demand public contributions based on unified criteria, and private developers also have a path open to them to secure predictability and institutional stability.
These guidelines are expected to become an essential standard for enhancing the transparency and trustworthiness of community-based development in the future.
#MinistryOfLand, #PublicContributionGuidelines, #LandDevelopment, #LandPriceIncrease, #DevelopmentProfitSharing, #UrbanPlanningChanges, #DistrictUnitPlanning, #SpatialInnovationZone, #PublicFacilityDonations, #SecuringPublicInterest, #RealEstatePolicy, #UrbanDevelopmentSystem, #NationalPlanningLaw, #PublicContributionSystem, #ExemptionFromRedevelopment, #ExemptionFromReconstruction, #LandPriceIncreaseRecovery, #UrbanPlanningStandards, #Appraisal, #PublicContributionReductions, #PopulationDeclineAreas, #PublicInstitutionDevelopment, #PublicFacilityInstallationStandards, #DevelopmentProjectPredictability, #DevelopmentProfitReturn, #LocalGovernmentDevelopmentPolicy, #MinistryOfLandPolicy, #RealEstateGuidelines, #PublicInterestDistribution, #RegionalGrowthEngine
