Updated March. 13, 2014 06:05
The government plans to allow in the second half of this year the construction of high-rise apartment buildings, large discount stores, restaurants and plants in 17 areas across the country where development restrictions have been eased. Under current regulations, only buildings less than five stories high can be built in such areas. The deregulation sparked high expectations that it will likely cause a development boom on the areas 4.3 times larger than Yeouido, an islet on the Han River that flows through Seoul, stimulating local economy, as well as concerns over the possibility of reckless development.
President Park Geun-hye announced a set of measures Wednesday to revitalize sluggish provincial economy during a meeting on investment promotion and regional development. After the central government revises guidelines on local urban planning, provincial development committees will make detailed plans to develop the new development areas.
Under the measures, the central government will reassign the 17 areas where development restrictions are relaxed as semi-residential, commercial and semi-industrial zones. Seven of the areas are located in Seoul and Gyeonggi Province, while the rest are in provincial areas. The government did not specify the areas out of concern over speculative investment booms.
In areas where the land is designed only for housing, land owners or developers can build only houses three to five stories high due to restrictions on floor area ratios. In semi-residential areas, however, the floor area ratios are increased, allowing land owners or developers to construct apartment buildings 10 to 20 stories high. They are also allowed to build karaokes, golf practicing facilities and hotels in neighboring commercial areas, and factories in semi-industrial zones.
The government has also decided to relax development restrictions on mountain areas where only hospitals were allowed to be built so that parking lots and other auxiliary facilities can be constructed. As the government has allowed hospitals to run profit-oriented auxiliary businesses, the deregulation is expected to spur development in the mountain areas.
The central government also plans to carry out joint projects with local government for development zones in 15 metropolitan cities and provinces befitting the characteristics of each region. Under the projects, the government plans to promote the film industry in Busan, the software convergence industry in Daegu, cultural content business in Gwangju and display device manufacturing in South Chungcheong Province and maritime tourism business in South Jeolla Province, among others. The central government also plans to increase tax benefits to companies that leave highly populated Seoul or Gyeonggi Province to relocate to provincial areas and increase employment. The measure is aimed at spurring corporate investments in provincial areas.
President Park said at the meeting that the central government will support local development strategies so that all people across the country can benefit from an economic recovery.