Raising the floor area ratio at South Korea's third-phase new towns to 300% could add more than 63,000 homes — a volume comparable to Ilsan new town — without acquiring any additional land, according to an analysis. President Lee Jae-myung has called for expanding supply through higher density, giving momentum to plans that raise the intensity of land already secured. With new housing sites hard to find in the greater Seoul area, the approach is seen as an alternative for building supply capacity. But turning the added volume into actual move-ins will require expanding infrastructure such as transit networks while also speeding up project timelines.
Lee Sung-hoon, president of the Korea Land & Housing Corporation (LH), briefed the president on a plan to raise the average floor area ratio at the third-phase new towns from about 206% to 250% or higher, industry sources said on the 21st. The briefing came the previous day when the president visited the Gyeyang third-phase new town site in Incheon. Such a change is estimated to add roughly 30,000 to 40,000 homes. "That figure simply compares the increase in the floor area ratio," an LH official said. "The number of households will vary depending on how presale and rental units are allocated and how floor space is assigned to each unit."
Calls to raise the floor area ratio at the third-phase new towns have been persistent, because housing supply can be increased without designating new sites or acquiring more land. The Korean Urban Real Estate Association said a recent analysis of apartment-zoned land across the six third-phase new town districts found an average floor area ratio of 194.1%. Raising that to 300% would lift the planned volume from 144,892 homes to 208,569, adding about 63,677 units. That is on par with Ilsan new town's original plan for 69,000 homes. The president also said of the plan to raise the ratio above 250% that "areas near rail stations or along arterial roads should have even higher floor area ratios," leaving room for a further increase, analysts said.
Supporters also point to redevelopment and rebuilding projects in Seoul where floor area ratios of around 350% have been applied, and to the first-phase new towns, where redevelopment is proceeding with ratios of 300% to 350% under the special act on aging planned cities. With housing supply short in the greater Seoul area, raising density at the third-phase new towns is a realistic alternative for securing supply capacity, proponents say.
The additional units are also expected to help absorb demand from residents displaced by redevelopment projects in central Seoul. Expanding supply in the capital region while absorbing that relocation demand could ease instability in the rental market, and tempering buying sentiment driven by fears of a supply shortage could also hold down price gains spreading to Seoul's outskirts and Gyeonggi Province.
Still, higher density alone does not improve living conditions, and some argue that wider transit networks, schools, parks and everyday amenities must be expanded in step. Others raise concerns about vacancies stemming from long-term population decline. "There is no sunlight without shadow, so the positives should be considered first," said Park Won-gap, senior real estate specialist at KB Kookmin Bank. "With housing sites for supply in short supply in the capital region, raising the floor area ratio at the third-phase new towns can rein in current buying sentiment to some degree."
The test is whether the expanded plans can be carried through to actual groundbreaking and move-in. How quickly land compensation and acquisition, permits and infrastructure work can be advanced, alongside the higher floor area ratio, is expected to determine the success of efforts to expand housing supply in the greater Seoul area.