Osan Segyo 3rd District - A Sacrificial Lamb?

Gyeonggi Province and Osan City expressed strong dissatisfaction over the designation cancellation of Osan's Segyo 3rd District, stating "the unilateral withdrawal of land development by the Ministry of Land, Infrastructure and Transport (MOLIT)."

According to the province on the 31st of last month, MOLIT is treating the cancellation of the Osan Segyo 3rd District development project as a fait accompli while adjusting project districts in accordance with the amended Korea Land and Housing Corporation (LH) Act that passed the National Assembly on December 8 last year.

In response, the province and Osan City expressed dissatisfaction that MOLIT is unilaterally pushing forward the project cancellation by submitting agenda items for deliberation by the Central Urban Planning Committee on the 31st regarding the designation cancellation of Osan Segyo 3rd District.

Osan Segyo 1st, 2nd, and 3rd Districts were areas where MOLIT unilaterally announced new city development in September 2009. However, as the Korea Land and Housing Corporation (LH) fell into a financial crisis due to unplanned mismanagement and a real estate market downturn, Osan Segyo 3rd District is at risk of becoming a sacrificial lamb.

The province and Osan City have taken the lead in discussions regarding business adjustments for Segyo 3rd District, stating that the activation of sales and development of Segyo 1st and 2nd Districts and the adjustment of pending matters such as Segyo 1st District's U-City services and comprehensive traffic improvement measures should be preceded between Osan City and LH.

Additionally, they have maintained the stance that the direction of handling should be determined after sufficient review with a time allowance in a way that does not hinder Osan City's urban development and does not cause damage to residents.

In particular, the province strongly requested that if the project is cancelled, concrete resident support measures to minimize resident damage from long-term restrictions on activities should be implemented, and the western bypass road should be opened early to prioritize resolving resident inconvenience.

In response, MOLIT is known to hold the stance that early project cancellation is unavoidable to minimize resident damage from long-term activity restrictions, and plans to submit the matter to the Housing Policy Deliberation Committee in early April and proceed with project cancellation on schedule.

Gyeonggi Province and Osan City have announced their position to jointly respond to such stances by MOLIT and LH, and to handle new projects to be pursued by LH carefully in the future.

Accommodating Population of Only 150,000... New Cities Abound in Surrounding Areas

The Osan Segyo new city development plan was announced by MOLIT in September 2009. According to the plan, Osan Segyo 1st District has 16,249 planned units (49,641 people), Segyo 2nd District has 12,921 units (37,521 people), and Segyo 3rd District has 22,669 units (63,471 people). Combined, Districts 1-3 are planned to accommodate approximately 520,000 units totaling 1.5 million people.

Compared to Osan City's current population of approximately 1.8 million people this year, this amounts to creating another Osan City. Although Osan City's population continues to grow, there are assessments that Segyo new city still has weaker self-sustaining urban capacity compared to other new cities.

The situation surrounding Osan new city is not favorable either. Right next to it, Dongtan new city already has plans to supply 40,000 units accommodating 1.2 million people, and Dongtan 2nd new city has plans for approximately 1.1 million units accommodating approximately 2.6 million people. Within less than 20km of the area, Pyeongtaek Godeok International new city and Hwaseong Hyangnam new city are also located.

Real estate experts point out that existing unsold units in Segyo 1st and 2nd Districts and units awaiting supply totaling 200,000 units alone would be a considerable burden for LH in terms of development.