Obligatory Construction Ratio of Small Size House to Be Revived

The regulation reform committee, which disagreed with the Ministry of Construction and Transportation (MCT) on the issue of revival of the ratio system of obligatory construction of small size house, decided to accept the proposal of the MCT in the subcommittee meeting yesterday.

Following this, `the obligatory ratio system of small size house` will be enforced as early as at the end of this month. According to this system, when apartments are built or rebuilt in Seoul and 16 metropolitan cities, 15 to 25 percent of the whole households should be small size apartment under 18 pyong.

The first regulation reform committee member Song Yoo-Chul from the prime minister`s office said yesterday, "Although it is the principle that a long-term supply of house should leave to the market autonomy, the committee decided to adopt the MCT`s proposal considering the sudden rise of the prices of real estates. The system is likely to be enforced as early as at the end of this month through the whole meeting of the regulation reform committee on Friday."

According to the MCT, 16 cities, including Seoul, Incheon (partially), Sungnam, Ahnyang, Yijungboo, Guri, Hanam, Koyang, Namyangjoo (partially), Suwon, Bucheon, Kwangmyong, Kwacheon, Kunpo, and Shiheong (partially), are to be subject to the system when they build more than 300 houses through reconstruction or privately run house businesses.

Low population complex areas, such as Jamshil, Cheongdam, Dogok, Banpo, Amsah, Myongil, and Hwagok, and other areas in which the business plans were already approved or construction plans were reviewed before the enforcement day of the new principle are excluded.

The MCT decided to make 20 percent as the basic obligatory construction ratio of small size house, and to allow city mayors or provincial governors to adjust the ratio within 5 percent range. The MCT also plans to allow the mayors and governors not to apply this system temporarily with the approval of the Minister of Construction and Transportation if the number of unsold apartments increases.

Jae-Seong Hwang jsonhng@donga.com