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Space & Environment is a quarterly magazine published by KRIHS. Its purpose is to introduce current issues on territorial planning in Korea and disseminate research achievements and international activities of KRIHS and other Korean institutes.

Contents

Korea’s Urban Planning Policy and Habitat III

Introduction: Korea’s Urban Planning Policy for Sustainable Development

Setting Legislative Framework for Urban Development and Economic Growth (1960s and 70s)

Improving Quality of Urban Spaces (1980s and 90s)

Sustainable Urban Development (Since 2000)

Lessons from Korea’s Urban Planning Policy

Challenges in Achieving Sustainable and Inclusive Economic Growth in Korean Cities

New Strategies for Urban Economic Growth: Sustainability and Inclusiveness

Challenges and Tasks for Urban Economic Development in Korea: Achieving Sustainability and Inclusiveness

Implications for Developing Countries: Building a Solid Foundation for Economic Development

Habitat III: Policy Direction and Challenges for Urban Inclusiveness

What Is Urban Inclusiveness per Habitat III?

Which Urban Issues Can be Addressed via Urban Inclusiveness?

Direction and Challenges for Korea’s Urban Policy

Overview of Smart City Development in Korea

Habitat III and Housing Pathways in Korea

Importance of Housing in Habitat III

Housing achievements in Korea after Habitat II

Remaining Issues and Lessons Learned

Changes in the Korean Public Transportation System: Achievements and Challenges

Public Transportation in 20th-century Korea

2004 Overhaul of Public Transportation System

Overhaul of Public Transportation System: Achievements and Future Tasks

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67 Special Edition 2016. 10

Vol.

KRIHS

SPACE & ENVIRONMENT

Beyond Habitability: Korea's Urban Policy

The Global Development Partnership Center (GDPC) was established in December 2010 as a consulting arm of

KRIHS to strengthen its global development cooperation endeavors. Through collaboration with the central

government, public corporations and universities in Korea, international development banks, and overseas

governments and research institutes, it has conducted development partnership activities, such as capacity

building programs, research and consultation for developing countries, and the Global Development Partnership

Forum for domestic companies.

KRIHS (Korea Research Institute for Human Settlements) was established in 1978 with a mission of creating a beautiful and pleasant living environment. To achieve the mission, KRIHS has been committed to enhancing the quality of life and well-being of the people in the nation with its spatial planning studies and policy suggestions.

Since its foundation, KRIHS has carried out a variety of studies on the efficient use, development, and conservation of territorial resources. Its research areas range from sustainable and balanced territorial development and conservation of the territory to the provision of housing and infrastructure.

67Special Edition 2016. 10

Vol.

SPACE & ENVIRONMENT


Habitat III, held in Quito, Ecuador, is significant in

influencing the setting of the direction of urban and human

settlement policy despite the country’s economic level,

urbanization rate, and urban and housing problems. Twenty

years ago at Habitat II in Istanbul, an innovative idea of

housing rights was promoted, and since then, housing issues

have been brought up worldwide and numerous efforts have

been made to reach solutions to severe housing problems.

Over the next three decades, the global urban population

is expected to nearly double, and consequently, the human

settlement sector faces a number of problems and challenges.

In this respect, Korea has decades of experience tackling

and resolving problems through trial and error. Accordingly,

Korea is confident that its experience at the urban and human

settlement level is extremely significant to the world. So this is

the underlying motive to produce this Special Edition, namely

Korea’s policy responses toward national urban planning and

economy, housing, transportation and a smart city approach.

This edition will also include the results and issues from the

perspective of Habitat III.

Prologue

Korea is also preparing for a new challenge in line with

Habitat III’s mission and vision. We certainly hope to use our

experience and efforts to help countries and peoples suffering

from urbanization and urban problems, no matter how small

the contribution. With Korea’s territorial and urban planning

and development as the frontier, KRIHS, as a national think

tank, will continue assisting efforts toward better solutions for

urban development all over the world.

October, 2016 KRIHS

Contents

06Issue 01Korea’s Urban Planning Policy and Habitat III

18Issue 02Challenges in Achieving Sustainable and Inclusive Economic Growth in Korean Cities

28Issue 03

Habitat III: Policy Direction and Challenges for Urban Inclusiveness

36Issue 04

Overview of Smart City Development in Korea

44Issue 05

Habitat III and Housing Pathways in Korea

54Issue 06


1Issue

Beginning in the 1950s, Korea’s urban planning policy has gone from

supporting economic growth to improving the quality of urban spaces

and toward sustainable urban development in response to socio-

economic changes. Such policy over the years has made cities more

competitive and improved the urban living environment for residents,

thereby creating optimal conditions for sustainable growth.

Korea’s Urban Planning Policy and Habitat III

Kim, Tae-hwanSenior Research Fellow, KRIHS

[email protected]

Korea’s Urban Planning Policy and Habitat III 7

01. Introduction: Korea’s Urban Planning Policy for Sustainable Development

Korea has achieved rapid economic growth since the 1950s,

having transformed itself from a poor country with an agriculture-

based economy into one where the majority of its people live in

urban areas (Figure 1).

Figure 1. Urbanization rate and economic growth

Urbanization rate (%) GDP (in KRW billions)

80.0

70.0

60.0

50.0

40.0

1.200.000

1.000.000

800.000

600.000

400.000

200.000

01970 '74 '78 '82 '86 '90 '94 '98 '02 '06 2010

12.0

10.0

8.0

6.0

4.0

2.0

0

(%)

Real GDP growth

Urban population growth

'70~'75 '75~'80 '80~'85 '85~'90 '90~'95 '00~'05 '05~'10

Space & Environment Vol. 67 Beyond Habitability: Korea's Urban Policy 8

Over the course of this transformation, cities

have driven the nation’s economic growth. Korea’s

urban planning policy has evolved as a way to

manage this rapid urban growth, the pace of

which is unprecedented in human history.

In the 1960s, the Korean government utilized a

policy of state-led economic development that

lead to rapid urbanization. Thus urban policy

was closely linked with the national goal of

promoting economic growth. Acting in harmony

with economic policy, urban policy effectively supported rapid

industrialization.

In the process of their nation’s industrialization and urbanization,

Korea’s demographics shifted from a predominantly rural

population to one based mostly in cities, thus providing the

labor force necessary for industrialization. Urban planning

and development systems also functioned as major drivers of

industrial growth.

Additionally, the scope of Korea’s urban policy has expanded

to cover social problems such as poverty, shantytowns, traffic

congestion, pollution and shortage of livable housing. Korea’s

urban policy has ultimately made its cities more competitive and

improved the urban living environment for residents, thereby

creating optimal conditions for sustainable growth.

Urban planning and de-velopment systems also functioned as major driv-ers of industrial growth. Additionally, the scope of Korea’s urban policy has expanded to cover social problems such as pov-erty, shantytowns, traffic congestion, pollution and shortage of livable hous-ing.


02. Setting Legislative Framework for Urban Development and Economic Growth (1960s and 70s)

In the 1960s, the Korean government placed the utmost priority

on economic growth and crafted its urban policy with this goal in

mind. First, the necessary legislative framework for modern urban

planning was formed to accommodate the growing population of

cities. Laws such as the Urban Planning Act (1962) and the

Building Act (1962) were passed, and regulations on urban land

use grew more systematic. To meet the rapidly rising demand for

housing, the Urban Readjustment Business Act (1966) was

enacted.

In the 1970s, the focus of the government’s

industrialization policy shifted toward the heavy

and chemical industries. The policy focused on the

construction of large-scale industrial sites and the

ensuing urban development around those sites,

leading to the creation of planned industrial cities,

or Korea’s first “new towns.” To manage them

effectively, the Industrial Site Development Promotion Act (1973)

was enacted and public organizations actively participated in the

urban development process.

Another major achievement in urban policy was the introduction

of greenbelts in ten major urban areas in response to the

concentration of the country’s population and industries in large

cities. The objective was to direct the progress of urban growth,

that is, to encourage cities to develop in a more manageable and

sustainable manner through better planning. This policy initiative

was conducive to forming a cleaner urban setting and also

protected the natural environment near cities.

The policy focused on the construction of large-scale industrial sites and the ensuing urban de-velopment around those sites, leading to the cre-ation of planned indus-trial cities, or Korea’s first “new towns.”


03. Improving Quality of Urban Spaces (1980s and 90s)

In the 1980s and 90s, industrialization and urbanization in Korea

continued at an accelerated pace. The urbanization rate took a

huge leap from 28 percent in 1960 to 56.7 percent in 1980 and

79.6 percent in 2000 (Figure 2).

Unfortunately the nation’s progress along its path toward greater

urbanization led to a number of problems: a housing shortage,

substandard housing and inflated housing prices. These prompted

policymakers to focus on cooling the overheating of the housing

market and expanding the supply of decent and livable housing

units. Korea also faced increasing pressure to develop the outskirts

Figure 2. Urbanization rate and economic growth

Source: Se-hoon Park, Dong-ju Kim, Youn-hee Jeong, Geun-hyun Park, and Eun-young Lee. 2012. Demographic Change and Spatial Transformation in Korea: Recent Development and Policy Directions. Anyang: KRIHS. [in Korean]

90

80

70

60

50

40

30

20

10

0

25,000

20,000

15,000

10,000

5,000

0

1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010

Per capita GDP (in US$)

Urbanization rate


of its cities, which led to the expansion of those cities. This then

caused problems including pollution in areas adjacent to cities,

damage to the natural landscape and shortage of infrastructure.

Beginning in the 1980s, the housing shortage was especially acute

in large cities and the government built new cities on the outskirts

of Seoul to increase the housing supply. Five large new cities

were built in areas adjacent to Seoul, resulting in a significantly

greater supply of housing units and stabilization of housing and

real estate prices. The Housing Site Development Promotion

Act, enacted in 1980, allowed the public sector to lead land

development projects systematically for a short time (Figure 3).

Rapid urbanization, however, also led to

a preponderance of large-scale settlements

(shantytowns) where impoverished economic

migrants lived illegally in unsafe and substandard

housing. To tackle this problem, cities introduced

“joint redevelopment projects” under the legislative

framework of Korea’s Urban Redevelopment Act.

The private sector led these projects, minimizing

the burden on the public sector, and utilized the

land of residents in target areas along with the

funding and knowhow of private construction

companies. The law allowed private companies

to purchase public land to carry out these projects, and created

incentives for doing so. The results included the building of

higher quality infrastructure such as decent housing, parks and

parking lots, and many of the illegal housing developments

disappeared. Yet the projects led to the displacement of residents

in such areas and thus gave rise to serious social issues.

To tackle this problem, cit-ies introduced “joint rede-velopment projects” under the legislative framework of Korea’s Urban Redevel-opment Act.The private sector led these projects, minimizingthe burden on the public sector, and utilized the-land of residents in tar-get areas along with the funding and knowhow of private construction com-panies.


Figure 3. Location of first-and second-generation new cities near Seoul

First-generation new city Second-generation new city

Paju Unjeong

16.578,454Setptember 2006June 2009

Jungdong

5.5 41,400 Sanbon

4.2 42,000

Pyeongchon

4.2 42,000

Ilsan

15.769,000

Bundang

19.6 97,600

Gimpo Han River

11.759,844August 2008June 2011

Incheon Geomdan

18.192,0001H of 20132H of 2016

Hwaseong Dongtan 1

9 40,921 June 2004January 2007

Hwaseong Dongtan 2

24111,4132H of 20122H of 2014

Gwanggyo

11.331,000Sep 2008July 2011

Pyeongtaek Godeok International City

13.5 54,267 1H of 20132H of 2016

Yangju (Okjeong, Hwacheon)

11.458,975December 2011December 2013

Songpa Wirye

6.842,947June 20112H of 2013

Seoul Seongnam Pangyo

8.929,263March 2006December 2008

Region

Area (square kilometers)No. of homes built (housing unit)First sale of housing unitsFirst residents move-in


04. Sustainable Urban Development (Since 2000)

By 2000, the national urbanization rate had exceeded 80 percent

and cities had reached the mature phase of urban development.

Whereas urban policy had focused on the quantitative expansion

of city infrastructure and main streets in the early stages of Korea’s

economic development, as opposed to improving quality of life in

urban areas, this was about to change. Higher income levels drove

higher demand for a more pleasant living environment and other

amenities in cities. Other major issues in urban policy included

heightened awareness of the need to preserve a cultural identity

and historical properties in cities and promote healthy

communities. In addition, policymakers began to pay more

attention to the widening gap between urban and rural residents

and considered the best method of stemming the decline of

smaller and midsize cities.

In the 2000s, balanced land development was

highlighted nationwide, and urban policy sought

to promote the growth of “hub cities” to assist

the development of smaller and midsize cities. A

major example was the establishment of a new

administrative city, Sejong, in central Korea,

where many government organizations eventually

relocated to from Seoul and vicinity. Ten “innovative cities” were

built as the new bases for public organizations, and “business

cities” were set up to attract more companies.

The focus of urban policy shifted toward enhancing livability

and quality of life, emphasizing preservation over development,

and turned away from development of the outskirts of cities

and toward the rehabilitation of downtown areas. Across the

nation, efforts were made to preserve the unique character of

smaller communities and make them stronger. In accordance

with the national development paradigm of “low-carbon, green

growth,” urban policy also sought to maximize the efficient use

In the 2000s, balanced land development was highlighted nationwide, and urban policy sought to promote the growth of “hub cities” to assist the development of smaller and midsize cities.


of space in cities and modification of structures in consideration

of the environment. Land was designated for multiple uses, and

policymakers sought to cut greenhouse emissions through a

variety of initiatives like the development of renewable energy

sources, green construction methods and more eco-friendly

transportation systems.

Today, Korea’s cities face new challenges: stagnant economic

growth, rapidly aging populations and low birthrates. Moreover,

fears are growing over aging urban infrastructure and the decline

of smaller and midsize cities. In response, the government is

improving its urban policy systems in a variety of areas through

making cities more competitive, reorganizing urban infrastructure

and improving quality of life for residents. State support for

urban development initiatives pursued by local governments is

also rising, including sustainability evaluations and pilot projects

for urban rehabilitation (Figure 4).

Figure 4. Influence of paradigm changes on direction of urban

Paradigm Before 1960 1970 1980 1990 After 2000

Economic growth

・ Urban Planning Act

・ Industrial Site Development Promotion Act

・ Industrial cities

Social justice

・ Urban Readjustment Business Act

・ Housing Site Development Promotion Act

・ Housing Construction Promotion Act

・ Redevelopment, residential environment improvement projects

・ Act on Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents

・ Five new cities near Seoul

・ New Town Project

Environmental sustainability

・ Han River, Walking Street (planned street for walking tours)

・ Environment impact assessment

・ National Land Planning and Utilization Act

・ Cheonggye Stream, Livable City Project

Creation of sustainable cities


05. Lessons from Korea’s Urban Planning Policy

Habitat III is the first comprehensive global campaign to

cooperate on sustainable development. The idea behind the “New

Urban Agenda,” which Habitat III has adopted, is to maximize

opportunities for urban development to advance sustainable

development. To this end, urban policy should proceed with

a view to “(achieving) social inclusion and ending poverty,”

“inclusive urban prosperity and opportunities for all,” and

“environmentally sustainable and resilient urban development.”

Over the past 60 years, urbanization in Korea has progressed in

tandem with rapid economic growth, and urban policy has always

sought to achieve the sort of sustainable urban development now

highlighted by Habitat III. The Korean government has made

various efforts to progress in this direction—for example, by

embracing urban development policy initiatives focusing on

achieving national economic growth, building urban

infrastructure and implementing measures for eco-friendly urban

development that improve quality of life (Figure 5).

The government has long considered urban

development as integral to raising national

competitiveness. Accordingly, it has pursued plans

for efficient urban development and strategies

to improve urban infrastructure and support

economic activities in cities. Other public sector

goals are to build a network of provincial cities

and promote cooperation in the development of

metropolitan cities.

As the majority of Koreans live in cities, the

government has taken on the challenges of raising

the quality of life in cities. As a result, the quality of life in urban

areas has steadily improved thanks to continued investment

in housing, water supply and sewerage, waste disposal and

For the sake of long-term and sustainable urban development, the government has sought to balance development and preservation and re-duce pollution resulting from urban development projects. It has also es-tablished an eco-friendly management system and is making efforts to tackle climate change by creat-ing green cities.


Figure 5. Urban policies in response to socio-economic changes

Social and economic developmentUrbanization and policy

1st Five-year Economic Development Plan (1962–66)

Industrial cities: Ulsan(1962)and Pohang(1968)

Housing Construction Promotion Act(1972)

Act on Readjustment Planning for Seoul Metropolitan Area(1982)

First-generation new cities (1988)

Special Act on Balanced National De-velopmet, Sejong Administrative City Plan (2004)

Urban Regeneration Act (2013)

Establishment of innovative city criteria (2006)

National Land Planning and Utilization Act (2002)

Housing Site Development Promotion Act(1980)

Act on Maintenance and Improvement of Urban Ar-eas and Dwelling Conditions for Residents (2002)

Introduction of greenbelts (1971)

Urban Planning Act (1962)

Urbanization rate 40%(1970)

Launch of Gyeongbu Expressway (1971)

Korea’s exports reach US$10 billion (1977)

Announcement of national plan for heavy and chemical industries (1973)

Urbanization rate 70% (1988)1988 Seoul Summer Olympics

Per capita GDP reaches US$10,000 (1995)

Half of population lives in large cities (2010)

1960

1970

1980

1990

2000

2010

Fo

un

datio

n fo

r natio

nal

gro

wth

establish

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ocu

s on

balan

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men

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uality o

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uan

titative gro

wth

and

systematic ap

pro

ach

to u

rban

plan

nin

g

Housing supply ratio of 100 (2008)

Introduction of local autonomy system (2003)


treatment, parks and greenbelts, public transportation, cultural

facilities and efficient urban management.

For the sake of long-term and sustainable urban development, the

government has sought to balance development and preservation

and reduce pollution resulting from urban development projects.

It has also established an eco-friendly management system and is

making efforts to tackle climate change by creating green cities.

Korea’s experience and knowhow in the urban development

process can provide valuable lessons for developing countries

undergoing rapid industrialization and urbanization as Korea

did in the past. To assist in the formulation of short- and long-

term urban development strategies in response to rapid urban

growth, Korea’s urban planning experience with respect to urban

development and land use should be shared with the world.

References

Kim, Tae-hwan, et al. 2015. Strategy and Challenges of Korea’s National Urban Policy. Anyang: KRIHS. [in Korean]

Korea Research Institute for Human Settlements. 2008. See Change (Sangjeonbyeokhae), 60-Year History of National Territory. Anyang: KRIHS. [in Korean]

Se-hoon Park, Dong-ju Kim, Youn-hee Jeong, Geun-hyun Park, and Eun-young Lee. 2012. Demographic Change and Spatial Transformation in Korea: Recent Development and Policy Directions. Anyang: KRIHS. [in Korean]

Cities need to establish creative urban environment for the sustain-

able growth, and to utilize a sharing-based urban regeneration model

for inclusive environment development.

Challenges in Achieving Sustainable and

Inclusive Economic Growth in Korean Cities

Issue2Kim, Eunnan

Research Fellow, [email protected]


19

01. New Strategies for Urban Economic Growth: Sustainability and Inclusiveness

Strategies for stimulating urban economic growth, a key part of

the United Nations Habitat III agenda, are necessary to ensure

that all urban residents share in a community’s prosperity by way

of sustainable and inclusive growth. The objective of urban

economic development over the next two decades is to provide

equal opportunities to access knowledge, technology and

education, so that urban residents from all walks of life can

improve their skills and obtain work both rewarding and well

paying. To this end, such growth strategies must pay more

attention to women, youth, people with disabilities, provincial

communities and those marginalized in society. They must

emphasize the need to recognize the economic contributions of

women, youth and the elderly and raise their participation in the

workforce. At the same time, creation of better job opportunities

is crucial in the creative culture, tourism, art and performance

fields as well as promotion of industrial diversification,

technological development and research innovation to enhance

productivity in high value-added business sectors.

Strategies for urban spatial development and

planning vehicles have important roles to play in

achieving sustainable and inclusive urban growth.

Key planning vehicles include transportation,

mobility, technology, communication networks

and infrastructure, whereas strategies for urban spatial

development are instrumental for upgrading urban settlements

and the planned expansion of cities. Other requirements include

better access to public spaces, renewable energy resources

and transportation infrastructure, public facilities and social

infrastructure. The value and utility of sharing-based urban

regeneration deserve attention, given the potential of this

Strateg ies for u rban spatial development and planning vehicles have important roles to play in achieving sustainable and inclusive urban growth.


approach to alleviate urban problems such as the rise in single-

person households, shortage of affordable housing, high youth

unemployment and the decline of communities as more homes

and offices are left vacant.

In addition, building a governance system that enables wider

participation and partnerships is important. The role of

organizations at the national, regional and local levels should

be enhanced in a way to facilitate integration, collaboration

and coordination among the central government, regions and

stakeholders and to support regional economic development.

02. Challenges and Tasks for Urban Economic Development in Korea: Achieving Sustainability and Inclusiveness

1) Need for Creative Urban Environment Conducive to Sustainable Growth

Korea saw rapid job growth in creative services and the science

and technology sector between 2008 and 2012. The number of

companies in creative industries rose 24 percent over that time,

far faster than that in the IT sector (10.3 percent). Employment

in creative job categories expanded 9.1 percent, outpacing

overall employment growth (5.5 percent). Of those working

for creative businesses founded over the same period, creative

services accounted for the highest proportion with 28.4 percent.

Of creative jobs generated over the same period, science and

technology accounted for the highest proportion with 45.9

percent (Figure 1).


21

Figure 1. New jobs in creative industries & creative class occupations

Employment share of each industry in overall employment of start-ups in creative industries (2008-12)

Creative services

New media

Design

AudiovisualCultural assets

ICT device

ICT communication service

Visual artsPublishing and print-ing

Performance arts

Employment share of each occupation in all new creative (2008-12)

Artists & creative experts

Cultural administration experts

Core R&D workforce

Key professionals

Health, welfare and religion ex-perts

Education and administra-tion profession-als

Specialized public managers

Science, IT and engineering spe-cialists

Finance and management professionals


According to a 2012 analysis of income levels and employment

rates in 163 municipalities and districts in Korea with a high

concentration of creative businesses, the high number of workers

in creative services and science and technology had a positive

impact on income levels as well as employment rates. That is,

cities with a greater number of jobs in the two sectors had higher

levels of income and employment. For every additional job

created in creative services, the average hourly wage increased

KRW 1,700 and employment rose 4.6 jobs per 10,000 people.

For every job added to the science and technology sector, the

average hourly wage increased KRW 1,500 and employment grew

1.5 jobs per 10,000 people (Figure 2).

The study also looked at Jeju Island and Paju,

Gyeonggi Province, both of which are magnets

for creative talent, to determine what urban

environmental factors might have been behind

such an impressive inflow of creative workers.

To attract and retain creative talent, the study

found that a city must be made attractive through

improving basic services and amenities, the job environment

and living conditions, as well as establish a creative ecosystem.

The cases of Jeju Island and Paju show that external inflow of

creative talent is the result of satisfaction with the city in such

aspects as climate and natural scenery, but also the availability

of basic amenities that meet the needs of creative professionals.

So the lesson here is to support the cultural environment

through tax incentives, overhauling the business infrastructure to

attract startups, renting out shared spaces to enhance incubator

programs for small businesses, and expanding public investment

in fundamental services such as public transportation and

healthcare.

To attract and retain cre-ative talent, the study found that a city must be made attractive through improving basic services and amenities, the job en-vironment and living con-ditions, as well as estab-lish a creative ecosystem.


23

Figure 2. Concentration of creative industries & creative class & urban economy: income & employment

Creative industries

Income effects

Income & employment

effects

Employment effects

New media

Cultural places

Audiovisual

ICT devices

Creative services

Creative class occupations

Income effects

Income & employment

effects

Employment effects

Education & administra-

tion professionals

Scien-tists,

IT and engineer-ing work-

ers

Core R&D workforce,

Public man-agement

professionals

Workplace

Creative class occupations

Income effects

Income & employment

effects

Employment effects

Education & administration professionals

Scientists, IT and

engineering workers

Health, welfare & religion experts

Finance & man-agement profes-sionals

Public management professionals, sci-

ence, IT & engineering spe-

cialists

Residence


2) Potential of Inclusive Economic Development: Toward a Sharing-Based Urban Regeneration Model

The development of internet and mobile technologies has

made information more accessible and enables transactions

across shorter distances and timespans, thereby lowering entry

barriers to many business areas. The scope of spaces to be

shared encompasses accommodation spaces such as rooms and

houses; workspaces such as offices; and spaces for gatherings,

events, hobbies and cultural pastimes. Accordingly, space

sharing has the remarkable potential to alleviate urban problems

and regenerate cities. In Korea, various startups as well as the

public sector are recognizing the value of space sharing and its

commercial potential to resolve problems stemming from single-

person households, shortage of affordable housing, high youth

unemployment and the decline of communities as a result of an

excessive number of vacant homes and offices.

Table 1. The sharing of urban space & its effects

Type of sharing Characteristics Urban policy & urban regeneration effects

Accommodations ∙ Sharing of empty houses & rooms for accommodations (e.g., B&B services)

∙ Economic effects (income growth)

Housing ∙ People can share housing in response to rise in one-person households

∙ Stable housing & social safety net

Offices ∙ Use of offices & workshops as co-workspaces

∙ Start-up support, job creation

Parking ∙ Sharing of idle parking lots (shared parking)

∙ Can alleviate parking space shortage

Public facilities ∙ Opening & use of public facilities such as community centers & facili-ties for culture, training & education at night & on weekends

∙ Increased use of public services

Other idle spaces ∙ Sharing of various spaces such as kitchen gardens, churches, reading rooms, unused stores & workshops (creative sharing model)

∙ Expansion & use of shared space


25

The sharing of accommodations and workspaces

is instrumental to stimulation of economic vitality

in urban regeneration areas. Under the Tourism

Promotion Act, a minbak (bed and breakfast)

normally reserved exclusively for foreigners can

accommodate Korean tourists in urban revitalization areas. Even

amid an economic slowdown, the formation of slums can be

prevented by using empty offices as cooperation and start-up

spaces, encouraging people to share homes to alleviate an excessive

vacancy rate while also providing housing stability for low-income

families, and converting empty stores and offices into “pop-

up” stores. In urban regeneration areas struggling economically,

a sharing-economy model is suggested in connection with

zoning deregulation. Space-sharing activities such as shared

accommodations and work spaces are likely to run afoul of land-

use regulations under existing policy plans, but problems can be

minimized if space sharing is promoted in deregulated zones,

where the mixed use of land is allowed (Figure 3).

Figure 3. A sharing-based urban regeneration model

In urban regeneration areas struggling economi-cally, a sharing-economy model is suggested in connection with zoning deregulation.

∙ Prevention of slum formation despite economic slowdown∙ Income growth, startup support & job creation∙ Housing stability for young people & low-income households∙ Reduced number of vacant homes & regeneration of dilapidated housing

Empty stores →Pop-up stores

Empty offices →co-working spaces →‌‌Startup support

spaces

Minimum regulation zones Promotion of spaces for cooperation and startup support

Empty houses →‌‌Urban B&B

establishments →Share houses

Urban regeneration

areas


03. Implications for Developing Countries: Building a Solid Foundation for Economic Development

1) Need for Job-oriented & Inclusive Strategy for Economic Development

The global malaise of jobless economic growth, increase in

low-paying service jobs and worsening youth unemployment

reflect the need for creating decent jobs and ensuring equality of

opportunity in the job market.

In developing countries, the number of workers in informal

employment is disproportionately high relative to the number

of quality jobs. So a crucial task is to develop strategies to create

decent jobs and devise plans to move those in vulnerable groups

into formal and stable employment.

2) Creation of Physical & Institutional Frameworks for Economic Development

Cities must lift physical and nonphysical

restrictions that keep them from realizing their

full economic potential. In an urban economy,

the importance of infrastructure and facilities

must be recognized, as well as the need for making

public spaces and an urban environment, the

foundation for economic development, more

efficient and eco-friendly. In today’s knowledge-based economy,

urban development increasingly depends on skilled talent, and

this underlines the importance of creating optimal conditions

in which to live and work. Uncertainty and unpredictability

in institutional environments are detrimental to economic

development. In developing countries, the most important task

for economic development is to create a human-centered urban

environment and eliminate institutional uncertainty to build a

more solid basis for economic growth.

In developing countries, the most important task for economic develop-ment is to create a hu-man-centered urban en-vironment and eliminate institutional uncertainty to build a more solid ba-sis for economic growth.


27

References

Kim, Eunnan, et al. 2015. Improved Way of Using Urban Space based on Shared Economy. Anyang: KRIHS. [in Korean]

Kim, Eunnan, et al. 2014. Urban Regeneration Using Creative Industries and Creative Class.Anyang: KRIHS. [in Korean]

Park, Gyeonghyun et al. 2013. Cluster of Creative Industries and Regional Engagement Strategies. Anyang: KRIHS. [in Korean]

Because the Korean economy has graduated from the growth-driven

stage to a more mature phase, growth is no longer the country’s

highest priority. More concerning are the widening gaps in income,

generation and region, and these problems are fueling conflicts that

are becoming more costly to resolve.

Kim, Soo jinAssociate Research Fellow, KRIHS

[email protected]

Habitat III: Policy Direction and

Challenges for Urban Inclusiveness

Issue3

Habitat III: Policy Direction and Challenges for Urban Inclusiveness 29

Because the Korean economy has graduated from the growth-

driven stage to a more mature phase, growth is no longer the

country’s highest priority. More concerning are the widening gaps

in income, generation and region, and these problems are fueling

conflicts that are becoming more costly to resolve. In the interest

of creating a sustainable society, urban communities must now

choose an alternative set of values and set their priorities

accordingly. With these realities in mind, this paper focuses on

urban inclusiveness, a topic of recent discussion by international

organizations, especially U.N. Habitat.

The U.N. Habitat conference is held every 20

years for the main purpose devising a vision

and implementation strategy for sustainable

development and human settlement. The

inaugural conference was held in Istanbul, Turkey,

in 1976 and the second in Vancouver, Canada, in

1996. This year’s conference, titled Habitat III, will take place in

Quito, Ecuador, and the declaration of a New Urban Agenda is

scheduled for October.

Interestingly the agenda identifies social conflicts caused by the

shift to a mature stage of industrialization from the growth-

driven phase with issues on inefficient urban management and

urbanization. Urban inclusiveness should be a precondition to

this end in that well planned and managed urbanization, the

agenda claims, can address such issues (U.N. Habitat, 2016).

This paper aims to discuss 1) the meaning of urban inclusiveness

in the context of Habitat III, 2) which urban issues can be

resolved through a stronger sense of urban inclusiveness, and 3)

the direction and challenges of Korea’s urban policy.

01. What Is Urban Inclusiveness per Habitat III?

As part of the preparation for Habitat III, ten policy units were

Urban inclusiveness should be a precondition to this end in that well planned and managed urbaniza-tion, the agenda claims, can address such issues (U.N. Habitat, 2016).


set in October 2015. Two hundred experts and 20 co-leading

organizations around the world have since worked together to

develop policy papers. The first policy unit, “Right to the City

and Cities for All”, suggests a comprehensive vision of urban

inclusiveness. In this unit, the concept of urban inclusiveness is

interchangeable with the “right to the city”, meaning a collective

right to use, appreciate and transform a city, which is understood

as common goods (including basic services, opportunities and

access to resources) that are essential for a better quality of life for

all inhabitants (U.N. Habitat, 2015).

From the perspective of Habitat III, urban inclusiveness has

three principles: diversity, equal access and urban governance

(U.N. Habitat, 2015). First, social, economic, cultural and

environmental diversity should be respected and utilized as means

of social cohesion. Additionally, access to resources, infrastructure,

basic services and economic opportunities offered by cities should

be provided to all on equal footing. And all urban dwellers should

have the ability to participate in and influence the political

decision-making processes that affect their collective quality of life.

What is impressive about the inclusive city

concept promoted by Habitat III is its emphasis

on diversity. Inclusion begins by acknowledging

differences, so the process whereby inhabitants

with different ways of living reach social consensus

is critical. In other words, urban inclusiveness

means embracing diversity and ensuring that all

inhabitants can participate in and influence the decision-making

process through capacity-building.

To strengthen urban inclusiveness, the first step is to identify the

major components that affect inclusiveness. In the view of this

author, such components are exclusion, vulnerability, capacity and

In other words, urban inclusiveness means em-bracing diversity and en-suring that all inhabitants can participate in and influence the decision-making process through capacity-building.


participation (Soo Jin Kim, 2015). Inclusion is both a state and a

process, and thus always undergoing change. The level of urban

inclusiveness can be determined by examining the relationships

among those components.

02. Which Urban Issues Can be Addressed via Urban Inclusiveness?

The problems deserving priority are exclusion and vulnerability;

capacity building and participation are issues to be resolved over

the long term. Efforts to fight exclusion and reduce structural

vulnerability, which exacerbates exclusion, will spell the end of

poverty and reduce inequality.

The OECD, World Bank, Asian Development

Bank and others have suggested an inclusive

growth model related to urban inclusiveness as

a means to end poverty and inequality; their

views on this matter differ depending on their

perspectives of the pace and pattern of growth.

First, the World Bank (2009) pursues the concentration of

resource investment in large cities and rapid economic growth

then equal distribution of consequent benefits, rather than

pursuing inclusive growth based on support for socially vulnerable

groups. The faster growth is, the more progress can be made in

reducing poverty (World Bank, 2009). Meanwhile, the OECD

(2014) focuses on social issues overlooked during the world’s

growth-driven period and seeks to provide socially vulnerable

groups with basic services such as education and healthcare and

opportunities to enter the labor market. These are the OECD’s

strategies to achieve sustainable development and alleviate

poverty and inequality resulting from growth-driven economic

development.

To strengthen urban inclu-

siveness, the first step is to

identify the major compo-

nents that affect inclusive-

ness. Such components

are exclusion, vulnerability,

capacity and participation.


The sort of urban inclusiveness suggested by Habitat III is more

in line with the OECD’s vision (2014) than that of the World

Bank (2009). As envisioned in Habitat III, urban inclusiveness

seeks to end poverty and reduce inequality by providing basic

services to the vulnerable, as well as a social safety net, with

sustainable development as the ultimate goal.

03. Direction and Challenges for Korea’s Urban Policy

This section is on the direction and challenges of Korea’s urban

policy from the perspectives of diversity, equal access and urban

governance.

First for diversity, support should go to vulnerable

groups such as the elderly, women, people

with disabilities and migrants so that they can

participate in economic activities as members of

the community. Benefits including better access

to public transportation, housing affordable

for eveyone regardless of mobility barriers,

while public housing units near public transportation routes

should be provided to the elderly so that they can remain in

the communities where they have lived even after retirement

(Hyunsook Cheon and Minjun Oh, 2013). For women,

infrastructure is needed to encourage full participation in

society and jobs, as child-rearing and geriatric care- traditionally

considered women’ work-should now be viewed as community

responsibility (Taewon Park and Hyunsook Cheon, 2012).

To achieve equal access, more efforts should be made to create

productive jobs. More than a million young people, including

informal workers, are jobless in Korea, and this problem cannot

be solved if the blame is put on lack of skills on the part of

For women, infrastructure is needed to encourage full participation in so-ciety and jobs, as child-rearing and geriatric care- traditionally considered women' work-should now be viewed as community responsibility.


individuals. The gap between generations is widening whereby

the potential for developing new skills is low, social exclusion is

apparent and structural vulnerability is high. In the case of rising

youth unemployment, high structural vulnerability leads to less

inclusiveness. To strengthen inclusiveness, opportunities to get

decent and productive jobs should be provided equally so that all

can enjoy the benefits of economic growth.

And to boos t urban governance , urban

rehabilitation projects must have adequate

budgetary resources allocated for long-term

programs to strengthen community spirit and

solidarity, not only to improve the physical

environment (Joongjin Shin et al., 2013). At

the municipal level, educational programs

should promote diversity in communities, and a community

business model should be developed to invigorate the social

entrepreneurship. At the central government level, a system of

subsidies and corresponding guidelines are needed to develop a

self-sufficient business model by consensus between municipalities

and communities (Haejin Lee, 2015).

The goal of sustainable development was announced in 2015

and that of Habitat III will be in 2016, so this article reviewed

recent discussions about inclusive growth and inclusive cities

led by international organizations. As Korean urbanization has

been driven by the central government, several interpretations

of inclusiveness should be considered in that context. Moreover,

what level Korea has reached and what issues have been addressed

for urban inclusiveness must be identified. To strengthen urban

inclusiveness, the central government should provide guidelines

for local governments to follow and pay attention to the

development of qualitative indicators that reflect future-oriented

values such as safety, happiness and quality of life.

At the central government level, a system of subsi-dies and corresponding guidelines are needed to develop a self-sufficient business model by con-sensus between munici-palities and communities


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KR

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. [In

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References

Kim, Soo Jin. 2015. A Study on Building Inclusive Cities in Korea. Anyang: KRIHS. [in Korean]

Kim, Soo Jin and Chan Park. 2015. Inclusive urban development in Korea. In Proceedings of Seminar for KRIHS’s 37th Anniversary. Anyang: KRIHS. [In Korean]

Park, Taewon, and Hyunsook Cheon. 2012. The Concept of the Female-friendly City and Components of Urban Planning. Planning and Policy. Korea Spatial Planning Review 372, 29-40. [in Korean]

Shin, Joongjin, Ilyoung Kim, and Gyteack Bae. 2013. A Study on the Maeul- Mandulgi Process for Community Empowerment. Journal of Korea Planning Association 48(6), 43–56. [in Korean]

Lee, Haejin. 2015. Social Economy and Community Development. Korean Journal of Sociology, 49(5), 77-111. [in Korean]

Cheon, Hyunsook and Minjun Oh. 2013. Housing for the Elderly and Support Measures. KRIHS Policy Brief, 1-6. [in Korean]

OECD. 2014. Report on the OECD Framework for Inclusive Growth. Paris: OECD. World Bank. 2009. What is Inclusive Growth? Washington, D.C.: World Bank.

U.N. Habitat. 2015. Habitat III Issue Papers 1-Inclusive Cities. New York: U.N. Habitat. http://unhabitat.org/wp-content/uploads/2015/04/Habitat-III-Issue-Paper-1_ Inclusive-Cities-2.0.pdf [accessed Dec. 21, 2015]

U.N. Habitat. 2016. Surabaya Draft of the New Urban Agenda - 28 July 2016. New York: U.N.Habitat. https://www.habitat3.org/bitcache/b581c7d6129c25b03b0102e2a7e5e175e901953 5?vid=586129&disposition=inline&op=view

Issue

A smart city is an information hub that integrates data from urban

networks like that on roads, water, electricity and sewerage through

smart sensors and cutting-edge communication technology for the

purpose of resolving serious urban issues in transportation, security

and disaster prevention.

Lee, Sang KeonSenior Research Fellow, KRIHS

[email protected]

4Overview of Smart City Development in Korea

Overview of Smart City Development in Korea 37

A smart city is an information hub that integrates data from

urban networks like that on roads, water, electricity and sewerage

through smart sensors and cutting-edge communication

technology for the purpose of resolving serious urban issues in

transportation, security and disaster prevention. The Integrated

Operation and Control Center (IOCC) is a information platform

and hub for smart city applications as illustrated in Figure 1.

Information and communications technology

(ICT) is considered highly useful in scientifically

and efficiently identifying, analyzing and deducing

the best solutions for urban problems. Through

ICT, a smart city offers diverse smart services

that inform drivers of the fastest routes based on

data gathered from real-time traffic monitoring

devices and a smart disaster service that broadcasts

essential information through variable message

signs or personal SMS. In addition, the installation

of and real-time monitoring by CCTVs help to

promote public safety, reduce crime, protect the environment and

prevent disasters.

Smart city services that enhance the quality of urban life and

protect the environment are emerging as essential parts of many

cities around the world. Over the last 20 years, the Korean

government has encouraged smart city projects by providing legal

and institutional support, R&D and human resources as shown

in Figure 2.

Korea in 2008 enacted the Act on the Planning, Construction

and Management of Smart Cities. More than 120 million USD

of investment has gone into R&D, smart city test beds and

human resource development. Figure 3 shows the status of the

Smart city services that enhance the quality of urban life and protect the environment are emerging as essential parts of many cities around the world. Over the last 20 years, the Korean government has encouraged smart city projects by provid-ing legal and institutional support, R&D and human resources.


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Figure 3. Development of Korean Smart Cities

Around 50 cities in Korea start constructing Smart City-Total Cities in Korea: 163 57% of Seoul Metropolitan Area (19 cities) has construccting Smart City-Total Cities in Seoul Metropolitan Area: 33 cities

23% of Other Area (31 cities) has constructing Smart City-Total Cities in Korea Except Seoul Metropolitan Area: 130 cities

● Pilotcity

● Ubiquitousurbanplanning

● U-cityInfrastructureBuildingoperating

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Seoul

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Incheon

●Pilotcity

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operating

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Siheung,Namyangju,Uijeongbu,

Gimpo,Suwon,Seongnam,Paju,

Gwangmyeong

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Yangju,Yongin,Goyang,

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Daejeon


operating

Chungcheong(8)

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●Gyeongju,Gumi,Yeongyang

●Jinju,Gimcheon

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country’s smart city development and the cities’ locations.

Studies have shown that smart city projects are beneficial and

effective for resolving urban problems across the spectrum, from

traffic congestion to pollution, as summarized in Figure 4.

Smart city projects in crime prevention areas

have shown remarkable success since the opening

of the U-integrated center in Anyang, Gyeonggi

Province. Comparing the situation before and

after the center went online, the crime rate in

Anyang saw a significant annual decrease of 17.8

percent. So the effect of crime prevention proved

widely successful for the realization of a safer city

through implementation of the smart city system. In the case of

Namyangju, Gyeonggi Province, based on the field survey, the

average speed of traffic flow increased approximately 7.2km/

h thanks to the provision of real-time traffic data, dispersion

of traffic volume and suggestion of detours. The average queue

length at four main intersections within the central business

district (CBD) fell six to 12 meters, while the average waiting

Figure 4. Benefits of Smart City Projects

• Traffic flow• Public transport usage• Citizen convenience(survey)• Arrest rate• Efficiency of facility management• Energy saving• Transparency(survey)• Citizen participation• City competitiveness(survey)

Need to be measured to prove smart city feasibility• Crime rate• Response time to incidents• Loss from disater• Air and water pollution• Water leakage

Enhanced

Decreased

How beneficial are these Smart Cities?

In the case of Namyangju, Gyeonggi Province, based on the field survey, the av-erage speed of traffic flow increased approximately 7.2km/h thanks to the pro-vision of real-time traffic data, dispersion of traffic volume and suggestion of detours.


time due to control decreased 43.2 seconds. With the higher

use of traffic information, public awareness of intelligent

transportation systems has increased from 64 percent to 82

percent. Public satisfaction with traffic information has also shot

up from 30 percent to 80 percent. Approximately 68 percent of

drivers choose to use detours by using the information on VMS

and 82 percent request additional VMS installation (Figure 5).

The similarities among cases of Korean smart city development are

as follows, First, smart city projects are largely focused on systems of

intelligent transportation and crime and disaster prevention. Second,

they have built more than 100km of fiber-optic networks for use as

communication infrastructure. And third, the majority of smart cities

are developed based on a comprehensive information strategic plan

(ISP).

Particularly for functions like water leakage

management, an active CCTV system, multi-

functional smart poles and public interaction

portal can be good reference points for other cities

worldwide interested in the smart city initiative,

especially those in developing countries.

Based on 20 years of development experience, the

following five issues need analysis and discussion

for successful implementation of a smart city.

The first is what is more important, privacy or security? Will the

project turn into a white elephant or a must-have item? Which

sector will drive the project, public or private? What kind of

system will be used, ready-made or tailor-made? Who will lead

the project, rotating or specialized official staff? Collaboration is

needed to find the proper answers to ensure the continued success

of the smart city project.

Particularly for functions like water leakage man-agement, an active CCTV system, multi-functional smart poles and public interaction portal can be good reference points for other cities worldwide in-terested in the smart city initiative, especially those in developing countries.


Figure 5. Effects of smart city projects in Korea

Figure 6. Five issues for Smart City development

Five issues for smart city development

❶ Privacy vs Security?❷ White elephant vs Must-have item?❸ Public-driven vs Private-driven?❹ Ready-made vs Tailor-made?❺ Rotating staff vs Dedicated staff?

Unit: km/h

pre-test

post-test

Travel speed7.2km/h

1

500

400

300

200

100

information2 3 4

338 331 354

475

373

445

371

534

Unit: km/h

pre-test

post-testIntersectionwaiting time

43sec

500

400

300

200

100

information1 2 3 4

345

151128

385

219

117

66

303

Crime rate18.5%

20,854

cases

2006

16,990

cases

2012

Arrest rate25.3%

2009 2010

• CCTV image evidence provision to police (since 2009): 22,204 cases

• No. of arrest through smart city center monitoring (since 2009): 1,266 cases

• Citizen satisfaction rate on traffic information:

30% (2011) → 80% (2012)

Anyang city

Namyangju city

Housing is at the heart of the drive toward achieving the New Ur-

ban Agenda under Habitat III. Global housing goals can be attained

through the adoption and enforcement of a comprehensive housing

framework. Such goals can be achieved through programmatic at-

tention to five elements: an integrated housing framework, inclusive

housing, affordable housing, adequate housing and upgrade of infor-

mal settlements.

Habitat III and Housing Pathways in

Korea

Issue5Park, Miseon

Associate Research Fellow, [email protected]

Habitat III and Housing Pathways in Korea 45

01. Importance of Housing in Habitat III

Housing is at the heart of the drive toward achieving the New

Urban Agenda under Habitat III. According to a Habitat III

policy paper, global housing goals can be attained through

the adoption and enforcement of a comprehensive housing

framework. Such goals can be achieved through programmatic

attention to five elements: an integrated housing framework,

inclusive housing, affordable housing, adequate housing and

upgrade of informal settlements.

This article reviews the achievements made since

Habitat II by briefly comparing Korea’s housing

conditions today to those of 20 years ago. Also

examined are the lessons learned and remaining

tasks ahead if Habitat III’s vision is to be achieved, and follow-

up steps in the context of socioeconomic change in Korea are

suggested.

02. Housing achievements in Korea after Habitat II

Since the 1996 adoption of the Habitat II Agenda, Korea has

made huge strides in the housing sector, with quantitative and

qualitative deficits being significantly reduced. The increase in

housing supply outpaced that of households. Korea’s housing

stock has shot up 260 percent since 1990, with home quality

greatly improving over the same period.

Table 1. Easing quantitative housing deficit

1990 2000 2010 2014

No. of housing units (thousand) 7,357 11,472 17,672 19,429

No. of households (thousand) 10,167 11,927 17,339 18,773

Ratio of housing units/households 72.4 96.2 101.9 103.5

Dwellings per 1,000 inhabitants 170 249 364 -

Housing is at the heart of the drive toward achieving the New Urban Agenda under Habitat III.

Source: Statistics Korea; MOLIT (2015); http://index.go.kr/


Table 2. Improving housing quality

1990 2000 2010 2014

Average no. of rooms per household 2.5 3.4 3.7 3.8

Average floor area per person (m²) 14.3 20.2 28.5 33.5

Share of dwellings with modern toilets (percent) 51.3 86.9 97.0 98.6

Share of dwellings with hot water in bathroom (percent) 34.1 87.4 96.9 99.5

The nation’s housing supply has expanded dramatically since

1990, with the number of housing units increasing at an annual

average of 536,000 units to reach 13.94 million in 2015. The

private sector supplied 380,000 housing units per year on average

and the public sector 155,000. The private sector supplied mostly

owner-occupied units, accounting for 71 percent of all housing,

whereas the public sector supplied 29 percent, primarily focusing

on rental units.

Table 3. Housing supply by sector (1990-2015)

Total Private Public

1990-2015 Total supply 13,940,284 9,894,505 4,045,779

Annual supply 536,165 380,558 155,607

Proportion (percent) 100 71.0 29.0

Public rental housing policies were implemented

from the late 1980s as part of the government’s

plan to build two mil l ion housing units

nationwide. The supply of public rental housing

was marginal until 1990, but expanded to as

much as 9 percent of overall housing output afterwards. The

volume of public units of rental housing leaped more than

threefold to 1,938,000 units in 2015 from 584,000 in 1997. The

number of such units with a guaranteed rental period of more

than ten years was 1,163,000 in 2015, or 5.9 percent of overall

housing stock. The central government played a pivotal role in

Source: Statistics Korea; http://kostat.go.kr/

The supply of public rental housing was marginal until 1990, but expanded to as much as 9 percent of overall housing output afterwards.

Source: Statistics from MOLIT http://stat.molit.go.kr/


expanding the housing market, designing various types of rental

homes through devising housing supply plans, setting up public

entities to implement such plans, overhauling legal and regulatory

frameworks, supplying serviced land and selecting tenants for

affordable units of rental housing.

Figure 1. Changes to public rental housing stock by type

thousand unit

2000

1500

1000

500

01997 2000 2005 2010 2015

long term rental short term rental purchased rental

A simultaneous twin-track approach that encourages both curative

(slum upgrading) and preventive (new provision) housing policies

was adopted per Habitat’s recommendation. Under curative

policies, the upgrading of slums was conducted in various forms

such as projects to improve living conditions in the lowest-income

communities, redevelopment initiatives conducted by private

developers and reconstruction projects driven by homeowner’s

associations comprising relatively affluent residents. Most projects

were economically feasible thanks to a higher ratio of floor area

and the positive impact of rising housing prices on asset value.

Source: http://www.index.go.kr/


In housing policy, the Korean government is overhauling

institutions in charge of such policy. Comprehensive housing

plans are developed in ten-year cycles to reflect housing supply

and demand, and the government monitors the implementation

of such plans every year. In particular, a two-pronged program for

housing policy based on income level has been devised. On the

supply side, for instance, permanent rental housing is offered to

those in the bottom tenth of the income distribution chart, while

housing benefits are provided as part of policy support on the

demand side. Policy measures such as National Rental Housing

and Chonsei (which allow tenants to put down large lump-sum

deposits in lieu of paying monthly rent) are available to those

above the bottom decile. In addition, support for affordable

housing and mortgage loans are provided to middle-income

households. Recently, the government has focused its policy

efforts toward attracting the private sector’s participation in the

private rental housing market for middle-income families as well

(Figure 2).

Korea is one of more than 100 countries that

recognizes the right to adequate housing in

legislation. The government has pursued policies

geared to creating policy, institutional and

regulatory frameworks that facilitate housing

construction. Recently, the Framework Act

on Housing granted official recognition of the

right to housing and codified the government’s

responsibility to ensure adequate housing for all citizens. Amid a

severe housing shortage, the Housing Construction Promotion

Act was passed to facilitate the construction of mass housing

units in a timely fashion by encouraging private participation in

the housing market and providing financial support through the

National Housing and Urban Fund (formerly known as National

Korea is one of more than 100 countries that rec-ognizes the right to ad-equate housing in legisla-tion. The government has pursued policies geared to creating policy, insti-tutional and regulatory frameworks that facilitate housing construction.

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Housing Fund). Because legal institutions must change with the

times, the legal framework for the housing sector was overhauled.

The government is working to amend legislation governing the

construction of rental housing in its efforts to expand housing

supply for people from all walks of life, not just for homeowners.

03. Remaining Issues and Lessons Learned

1) Limitations and issues

Korea has substantially reduced its quantitative

and qualitative deficits, yet vulnerable households

remain who have not benefited from formal

subsidies and/or any type of help. Households

living under the substandard units accounted

for around 5 percent of all households in 2014,

a vast improvement over 23 percent in 2010.

Nevertheless, the government’s proactive support

for families living in substandard housing is clearly still needed

(Figure 3).

In addition, housing policy targets assistance to vulnerable

groups including the homeless and those living in substandard

accommodations. While an estimated 12,347 people were

homeless in 2015, another 113,704 households relied on

makeshift dwellings such as tents, shacks and huts (Population

and Housing census, 2010) and 136,998 households lived in

gosiwon, or budget inns with tiny rooms (Survey of Ministry of

Health and Welfare, 2011). An estimated 263,000 households

were estimated to live in vulnerable housing conditions.

Korea has substantially reduced its quantitative and qualitative deficits, yet vulnerable house-holds remain. Thus, the government’s proactive support for families living in substandard housing is clearly still needed.

At the neighborhood level, the two-track approach of slum

upgrading and new provision of housing found caveats. A key

problem in redevelopment is that low-income households with

limited financial resources are likely to be pushed out of their


neighborhoods to the city’s fringes via gentrification process.

Other negative effects also emerged such as the loss of a sense of

community and belonging and the dissolution of social capital

(Ha, 2010).

Figure 3. Households living in substandard units

household (thousand, Left) Percentage (%, Right)

7,000

6,000

5,000

4,000

3,000

2,000

1,000

01995 2000 2005 2010 2014

1995 2000 2005 2010 2014

No. of households (thousand) 5,892 4,071 2,536 2,029 954

Proportion (percent) 46.3 28.7 16.1 11.8 5.3

2) Emerging problems needing resolution

Korea’s rapid economic growth, social change and

continuing demographic shift are expected to

have a profound impact on housing policy. The

number of single- or two-person households is on

a sharp rise, with average household size shrinking

due to one of the world’s lowest birth rates and a

rapidly aging population. The most recent census in 2015 showed

that more than a quarter (27.3 percent) of households were single

person. In the housing market, rising real estate prices are causing

more households to rent instead of buy homes, and higher rental

Source: Choi et al. (2012); MOLIT & KRIHS (2014)

Note: Results of 1995-2010 based on Population and Households Cen-sus data each year; Results of 2014 based on Housing Conditions Survey

The number of single- or

two-person households

is on a sharp rise, with

average household size

shrinking due to one of the

world’s lowest birth rates

and a rapidly aging popula-

tion.


costs create a heavier rent burden for tenants. Homeownership is

difficult for most Koreans, and an imbalance is emerging between

supply and demand in the housing market. In addition, real

estate inflation is driving higher levels of household debt, creating

an economic burden on society as a whole. Calls are thus growing

for the government to deal more effectively

with housing problems and enhance housing

welfare, especially for low-income households.

This situation is a significant departure from

the past, when the most urgent concern was the

sheer supply of housing units. The government is

looking at measures such as building dormitories

for college students and public rental homes

for the elderly and recent college graduates who

entered the workforce by expanding reverse

mortgage programs, encouraging private

developers to increase the supply of rental housing units, and

pursuing evidence-based research and policymaking.

3) Lessons learned

Housing issues are constantly evolving and vary among countries

as well as regions within a nation. They also change over the

lifecycle of a household. Even if a policy succeeds in one country

at a certain point in history, there is no guarantee that such success

will be replicated in other places or at other times. In addition,

expecting a policy solution of one size fits all is unrealistic. In this

context, Korea’s experience might not be comparable to those

of countries with severe housing shortages in both quantitative

and qualitative terms. As the Habitat III New Urban Agenda

suggests, however, housing is a basic human right and requires

dedicated efforts to resolve related problems of gargantuan scale

and magnitude. Korea has shaped relevant policies by overhauling

its legal frameworks and public entities, conducting ex-post

Housing issues are con-stantly evolving and vary among countries as well as regions within a nation. They also change over the lifecycle of a household. Even if a policy succeeds in one country at a certain point in history, there is no guarantee that such success will be replicated in other places or at other times.


monitoring, shifting policy focus to meet changing conditions

over time and benchmarking advanced economies after thorough

analysis. Housing is more crucial than ever if the world is to

achieve the New Urban Agenda, which envisions “cities for all.”

Korea will continue efforts toward making housing better, safer,

more affordable, more accessible, more resilient, better integrated

and more inclusive.

References

Choi, Eunyoung, Youngchang Kim, and Soonpil Kwon. 2012. Spatio-temporal changes of households failing to meet the 2011 new minimum housing standard (1995~2010). Journal of the Korea Real Estate Analysis Association. 18(4): 171-195. [in Korean]

Ha, Seong-Kyu. 2010. Housing, social capital and community development in Seoul. Cities vol. 27: 35-42.

Kim, Kyung-Hwan and Miseon Park. 2016. Housing Policy in the Republic of Korea. ADBI Working Paper Series No.570. Tokyo: Asian Development Bank Institute.

Statistics Korea. 2016. Press Release on 2015 Population and Housing Census. [in Korean]

Ministry of Land, Infrastructure and Transport (MOLIT). 2015. Housing Guidebook. [in Korean]

MOLIT and Korea Research Institute for Human Settlements (KRIHS). 2014. Housing Conditions Survey. Anyang: KRIHS. [in Korean]

Nam, Won-seok. 2013. Housing vulnerable groups: Definition and typology in Korea. Housing Studies Review 21(2): 47-71. [in Korean]

U.N. Habitat. 2016. New Urban Agenda: Draft outcome document for adoption in Quito, October 2016. September 10, 2016. NY: U.N. Habitat.

U.N. Habitat. 2015. Habitat III Issue Papers: 20- Housing. NY: U.N. Habitat.

U.N. Habitat. 2015. Habitat III Issue Papers: 22- Informal Settlements. NY: U.N. Habitat.

The Seoul city government in 2002 raised the quality of public trans-

portation services and set up complementary relations between

modes of public transportation through reform of public transporta-

tion, and this ultimately provided stable public mobility within the city.

Changes in the Korean Public Transportation

System: Achievements and Challenges

Issue6Kim, Hye-ran

Assistant Research Fellow, [email protected]


55

01. Public Transportation in 20th-century Korea

Public transportation systems in Korean cities in the 20th century

focused on bus service. Since the end of the Korean War in 1953,

the country’s population grew far more concentrated in the Seoul

metropolitan area as a result of rapid industrialization. While

the nation’s population jumped from 21.5 million in 1955 to

48 million in 2010, that of Seoul leaped more than six-fold—

from 1.6 million to 9.6 million—over the same period. The

capital accounted for 20 percent of the national population in

2010, nearly three times the level (7 percent) in 1955. For the

Seoul metropolitan area (spanning Seoul, Incheon and Gyeonggi

Province), the corresponding figures were 18 percent in 1955

and 49 percent in 2010. Yet Seoul and vicinity occupy only 0.6

percent and 11.8 percent, respectively, of the country’s overall

territory; as of 2010, Seoul also had 16,221 people per square

kilometer. The result was that the Seoul metropolitan area was

especially vulnerable to the negative effects of overcrowding:

chronic traffic congestion, urban sprawl and greater commuting

distances. As a result, traffic jams spread well beyond city centers

to intercity routes.

To alleviate chronic traffic congestion in Seoul,

one of the first policy measures to be implemented

was the introduction of subways. Subways

accounted for a significant proportion of all public transportation

use, and by reducing the number of cars on roads, they kept

traffic flowing in downtown Seoul to a certain extent. The mode

share of subways relative to all forms of transportation rose from

30 percent in 1996 to 35 percent in 2002.

In addition, policy prioritizing buses was implemented. Bus-

only lanes were introduced on a pilot basis in two major

Buses had a competitive rather than complementary relationship with subways.


thoroughfares(Wangsan-ro and Hangang-ro) in 1986 and

expanded to 59 roads covering a combined 218.5 kilometers

in 19971. Yet the mode share of buses relative to all forms of

transportation fell from 30 percent in 1996 to 26 percent

in 2002, showing that buses had a competitive rather than

complementary relationship with subways.

1 Sungwan, Kim, et al. 1997. Evaluation of Bus-only Lanes in Seoul and Suggestions for Im-provement. Seoul: Seoul Institute. [in Korean]

Figure 1. Prevalence of Use for Different Modes of Transportation (1985–2000)

1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000

30,000

26,000

24,000

22,000

20,000

18,000

16,000

14,000

12,000

10,000

8,000

6,000

4,000

2.000

Bus TaxiSubway Passenger carOther Other+Passenger car

Source: Seoul Research Data Service (data.si.re.kr/node/268, accessed August 27, 2016)


57

02. 2004 Overhaul of Public Transportation System2

The competitive relationship between buses and subways raised

the question of the feasibility of additional investments in public

transportation. The problems with the Korean public

transportation system at the time can be summarized as follows.

First, the bus market was driven by operators

that cherry-picked more profitable, high-demand

bus routes. Lucrative bus routes ran alongside

subway lines, fueling competition between the

two modes of public transportation. Second,

profitable bus routes would overlap, worsening

both traffic congestion and the quality of bus

service (in operating speed and frequency).

Furthermore, bus operators rarely serviced less

profitable routes, leaving certain areas with inadequate access to

buses. Bus companies held licenses for a limited number of routes

and could not afford to service those incurring losses. Poor public

transportation service lowered the quality of life for residents and

ran the risk of turning disadvantaged communities into slums.

Accordingly, a comprehensive overhaul of the public

transportation system came in 2004. The primary objectives were

to improve the quality of public transportation service in aspects

such as operating speed, wait time and affordability, assure equal

access and ensure business stability for bus operators regardless

of a bus route’s profitability. The highlights of the overhaul are

summarized below.

1) Overhaul of Bus Routes

The bus system overhaul had two objectives. For users, it was

to ensure punctuality and promptness, ease crowded routes

2 Kwon, Taebeom. 2005. Overhaul of the Public Transportation System in Seoul: Case Study and Implications. Daegu: Gaegu-Gyeongbuk Development Institute.

The primary objectives were to improve the qual-ity of public transportation service in aspects such as operating speed, wait time and affordability, assure equal access and ensure business stability for bus operators regardless of a bus route’s profitability.


and secure social equality through greater accessibility and

opportunities for bus services. For operators, it was to provide

stable service, set up comprehensive transportation systems, limit

environmental damage and reduce energy consumption.

① Formation of Functional Hierarchy by Dividing Bus Routes into Arterial and Feeder Routes

Arterial routes cover long distances, operating mostly on arterial

roads to enable fast intracity connections. Feeder routes cover

short distances, operating on minor arterial roads to facilitate

intracity mobility.

② Types of Bus Routes per Service Zone

Arterial and feeder bus routes are classified into four types

according to service zone (Figure 3).

③ Expansion of Central Bus Lanes

The number of central bus lanes increased from covering one

route spanning 7.6 kilometers to 14 spanning 177.6 kilometers in

an effort to increase ridership by ensuring stable arterial coverage.

The expansion of bus lanes in this manner has enabled faster and

more punctual bus service in Seoul.

Figure 2. Functional Hierarchy in Bus Operations

Arterial bus routes

Feeder bus routes

Operating speed

Short distance

Medium distance

Long distance

Source: Taebeom Kwon. 2005. Overhaul of Public Transporta-tion System in

Seoul: Case Study and Implica-tions, p.12.


59

Fig

ure

3.

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, 13.


2) Overhaul of Bus Operations

The overhaul of Seoul’s bus operations centered on the

introduction of a semipublic system of bus management that

prioritized the public good. It involved joint revenue management

and the auctioning of bus routes. In making this change,

policymakers emphasized financial support to alleviate the

financial deterioration of bus operators; introduced the concept

of public service to enhance the public nature of bus routes; and

sought to minimize social ills by ensuring job security and other

protections for workers in the bus service sector.

① Auctioning of Bus Routes

Nineteen routes, each with a strong profit outlook, were

auctioned off to stimulate competition. In a competitive bidding

process, qualified operators were selected in accordance with

criteria encompassing management and financial capabilities,

service improvement plans and intent to improve employee

welfare. Successful bidders were granted contracts for a limited

term of six years.

② Joint Management of Profits

A system of joint profit management (between the public sector

and private operators) was introduced for 70 arterial bus routes

and 291 feeder routes in Seoul. Based on standard cost (calculated

by the number of buses multiplied by that of kilometers), revenue

is shared in a manner commensurate with operating performance

and losses are fully covered by the Seoul Metropolitan

Government.

3) Overhaul of Public Integrated and Intermodal Fare System

The fare system is based on distance traveled; the base fare covers

a certain distance and the fare increases thereafter. This type of


61

fare system is intended to enhance social equity.

A free transfer system was introduced in which users of all modes

of public transportation would pay only the basic fare (KRW 800

in 2004) for trips up to 10 kilometers, regardless of the number

of transfers, and an additional KRW 100 for each increment of 5

kilometers beyond that. The discount, however, applies only for

users paying with smart transportation cards.

03. Overhaul of Public Transportation System: Achievements and Future Tasks

1) Achievements

The semipublic bus management system has enabled the

operation of less profitable routes and seen relative success

in improving public mobility across Seoul. And with the

introduction of bus-only lanes, the speed of bus travel has grown

faster since 2004 to an acceptable level despite increased travel

time for passenger cars in the downtown area, suggesting that bus

service has improved (Figure 4).

Figure 4. Speed of Different Modes of Transportation (1984-2010)

Passenger Cars (Total) Passenger Cars (Downtown)

Passenger Cars (Suburban) Buses

26

24

22

20

18

16

14

12

1984 1990 1995 2000 2005 2010

Source: Seoul Research Data Service (data.si.re.kr/node/102, ac-cessed August 27, 2016)


The use of public transportation has gradually

increased in Seoul with the improvement of

bus service and the introduction of the policy

of free bus-subway transfer in 2004. Public

transportation accounted for 64.3 percent of daily

travel in 2010, or 28.1 percent for buses and 36.2

percent for subways. In addition, the mode shares of buses and

subways relative to all forms of transportation have increased

simultaneously, indicating a shift from a competitive relationship

to one that is more complementary (Figure 5).

The mode shares of buses and subways have in-creased simultaneously, indicating a shift from a competitive relationship to one that is more com-plementary.

Figure 5. No. of Daily Trips for Different Modes of Transportation (1996-2010)

Buses Subways

Passenger Cars Taxis

12.000

10.000

8.000

6.000

4.000

2.000

0

1996 2002 2003 2004 2006 2008 200920072005 2010

Source: Seoul Research Data Service (data.si.re.kr/node/103, ac-cessed August 27, 2016)


63

The positive effects of the overhaul of the public transportation

system in Seoul have encouraged other Korean cities to follow

suit, leading to improved mobility for the public nationwide.

2) Remaining Tasks

Despite the positive effects discussed above, the

Korean public transportation system has room

for improvement. The semipublic bus system was

introduced as a means of combining the public

nature of bus service with the efficiency of private

operators, but the latter have few incentives

to pursue efficiency. This, in turn, makes it difficult to create

competitive dynamics in the market, and consequently, moral

hazard is prevalent among bus operators. The deficit of bus

operators in Seoul has risen every year to KRW 330 billion (USD

300 million), or 1.5 percent of the city’s overall budget, adding to

the public burden in the form of enormous subsidy payments.3

Overhauling the subsidy system and enhancing operational

efficiency are crucial if Korea is to ensure the operational

sustainability of its public transportation systems.

References

Kwon, Taebeom. 2005. Overhaul of Public Transportation System in Seoul: Case Study and Implications, Daegu: Daegu-Gyeongbuk Development Institute.

Kim, Sungwan, Jongseok Cho, and Mijin Shin. 1997. Evaluation of Bus-only Lanes in Seoul and Suggestions for Improvement. Seoul: Seoul Institute. [in Korean]

Yun, Hyeokryeol, Seungjun Kim, Seongil Shin, Shinhae Lee, and Kijeong Ahn. 2011. Suggestions for Developing Semi-Public Bus System in Seoul. Seoul: Seoul Institute. [in Korean]

Seoul Research Data Service. data.si.re.kr/node/102. Accessed August 27, 2016.

3 Yun, Hyeokryeol, et al. 2011. Ways of Developing Semi-Public Bus System in Seoul. Seoul: Seoul Institute. [in Korean]

Overhauling the subsidy system and enhancing operational efficiency are crucial if Korea is to ensure the operational sustainability of its public transportation systems.

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