The South Korean government plans to invest $ 42 billion (50 trillion won) towards the Urban Renewal New Deal over the next 5 years. The new administration has decided to delegate wide scale authority of the New Deal projects to the local governments. Once the local governments select more than 70% of a total of 550 places over a period of 5 years, the national government will then assess their eligibility.
The Ministry of Land, Infrastructure and Transport (MOLIT) has plans to improve over 50% of all businesses by building residential neighborhoods and constructing small-scale resting facilities akin to the 'Urban Renewal' project.
According to a related industry, 'Urban Renewal' seeks to maximize the insulating performance of exterior walls and windows by Passive House and minimize the use of new and renewable energy sources such as geothermal energy and solar powers.
There are concerns, however, that the government's zero-energy certification system won’t be effective if it uses uncertified Passive House facilities and uses excessively active energy systems.
MOLIT held an unofficial briefing on the New Deal project for officials in the local governments on July 28th.
Once plans are finalized in the coming month, they will begin accepting the local governments’ project plans from the end of September; by December they will have begun the process of selecting the first year’s business site.
This year, the first year of the project, MOLIT plans to select more than 110 new business areas, focusing on areas that need urgent improvement. According to the evaluation guidelines of MOLIT, the metropolitan municipality evaluates itself, after which MOLIT verifies eligibility at the final stage.
According to MOLIT, the Urban Renewal New Deal is an ambitious project with an annual budget of $ 8.3B (10 trillion won) to maintain or repair 500 senescent urban and residential areas nationwide by supporting, among others, parks, libraries, and parking lots for overall lifestyle improvement. In order to reduce the environmental gap between old and new towns, and revitalize stagnant areas, the government is looking to provide facilities and supply new housing through a “mini reconstruction.”
Five business categories comprise this project: “Save our Neighborhood,” “Residential Maintenance Support Type,” “General Neighborhood Type,” “Central City Topography,” and “Economic base Type.” The “Save Our Neighborhood” project will be conducted on a small-scale, low-rise residential area of less than 50,000 ㎡ and in a low-rise residential area with 50,000 - 100,000 ㎡ scale for “residential maintenance support.”
The “General Neighborhood Type” will cover 100,000 - 150,000 ㎡, and the “Central City Topography” will cover 200,000 ㎡ for commerce, establishments, history, tourism, culture and arts area. The “Economic base Type” will cover 500,000 ㎡, and it will be operated in station areas, industrial complexes, ports, and others.
The central public offering will be selected by evaluating the New Deal project proposal presented by the municipality (city / county target) in a competitive manner. The transparent evaluation process will include looking at the business plan proposed by the local governments, such as the urgency and necessity of the business (regional characteristics such as decline), the feasibility of the business plan (financial resources, sites), and the effects of the business (improvement of quality of life).
Passive houses, green architecture, social economic revitalization, and renewable energy are expected to be tests for the government's zero-energy certification.
It also evaluates the Gentrification (Aboriginal mobility) and the management of the property market.
MOLIT will also monitor the selection process of the municipalities and verify their compatibility with the real estate price trends, urban planning and national affairs.
The government intends to invest in the regeneration areas by inducing public financial resources of $ 1.2B (2 trillion won), $ 4.2 billion (5 trillion won), and $ 2.5 billion (3 trillion won) of annual public investment.