Incheon Metropolitan City is one of the fastest-growing cities in Korea. Its population surpassed 3 million in 2016, ranking third among the nation’s seven metropolitan cities. The figure is expected to continue to grow until 2040. Incheon overtook Busan, the second most populous city in Korea, in terms of gross regional domestic product (GRDP) in 2017. This means the city has been growing faster than Busan. Incheon is also ahead of other metropolitan cities in terms of employment rate. Incheon’s fast growth has kept Incheon Metropolitan City Development Corp. busy as it is tasked with supplying housing units to citizens, developing industrial complexes, building new towns and regenerating old city centers. As the city continues to expand, says its president Park In-seo, the corporation has to carry out a growing list of development projects. In an interview with BusinessKorea, Park explained how he has met the challenges and sketched out his business plans for this year. The following are excerpts from the interview. – Ed.
What is Incheon Metropolitan City Development Corp. (IMCD) doing for housing welfare improvement?
The corporation is building houses, supplying rental houses and providing various housing welfare services for rental house tenants. This year, the corporation will supply more demand-specific rental houses and diversify the types of such houses it supplies. We are planning to supply a total of 6,873 rental houses by 2022.
The corporation launched a new remodeling-based rental housing project in April this year in this regard. A rent equivalent to 80 percent of the market price will be applied to the tenants, who will include IT industry workers, artists, young people and low-income households.
In addition, the corporation will improve everyday life facilities for 3,310 families with disabled members until 2023 as a house remodeler for the low-income disabled.
What are obstacles to the projects and how is IMCD overcoming them?
The biggest difficulties are shortages of personnel and financial resources.
In the rental housing project, security deposits are classified as liabilities and an increase in the supply of rental houses, which are rented for over 30 years in some cases, means more liabilities. The corporation must proceed with the project with limited financing means in order to comply with the central government’s debt reduction guidelines.
In this context, we will enhance our financial management and make other new projects successful so that more rental houses can be supplied as planned. At the same time, we will hire more people by, for example, assisting with housing welfare worker license acquisition.
At present, Incheon City is one of the fastest-growing cities in South Korea and new towns are under construction there. What is IMCD’s new town development strategy?
Until recently, new towns in the city focused on supplying a large number of new houses for house price stabilization. At this moment, however, our strategy is focusing on small-scale construction putting well-balanced development first.
When it comes to financing, past new town development projects entailed significant debts and financial risks caused by large-scale construction. Now, however, we are shifting our focus toward minimum corporate capital spending and means leading to no increase in debt in step with ongoing financial paradigm changes.
Also, we are concentrating on Industry 4.0-based smart city development, safety and security enhancement, big data-based city management, new and renewable energy sources and particulate matter reduction so citizens’ expectations can be better met.
New town development tends to negatively affect old urban areas. What is IMCD doing for urban regeneration in such areas?
We are planning to renovate such areas and create innovation centers in those areas at the same time. In the short term, we will launch small-scale renovation projects for old low-rise buildings and proceed with our urban regeneration projects. In the mid to long term, culture-based urban regeneration and renovation of industrial complexes are planned to better reflect the cultural characteristics of the city.
We are currently playing an active role in the central government’s urban regeneration policy as well. Small-scale village regeneration, living environment improvement for vulnerable social groups and old downtown regeneration are well underway.
Incheon City opened its urban regeneration support center last year. What is its job?
The center is to draw citizens’ attention to urban regeneration and enhance the city’s related capabilities. At the center, citizens themselves can organize working groups and set directions via public urban regeneration projects.
Also, the center is running an academy training urban regeneration experts. This year, the basic course is provided twice in response to citizens’ demand. At the academy, they can get practical knowledge related to empty house utilization, social financing, business plan drafting, etc.
Industrial complex development is another main task of the corporation. What is its strategy in making industrial complexes more competitive?
We are playing a pivotal role in regional industrial complex development by developing the Geomdan and Seowoon Industrial Complexes.
In order to make them even more competitive, we introduced the concept of industrial park, which is related to a higher level of cleanliness both inside and outside the complexes and more places where workers can rest.
Also, we are participating in the Eco-science Park R&D Zone project with Incheon City and the Ministry of Environment with regard to Zone 2 of the Geomdan Industrial Complex in order to turn the zone into an environmental industrial complex adopting the concept. Companies housed in the zone are expected to be given tax incentives and government subsidies down the road.
What is the corporation’s goal for this year?
Above all, we are going to enhance our execution capabilities for urban regeneration and housing welfare improvement.
When it comes to urban regeneration, we are planning to launch projects for residential environment improvement and economic revitalization in Jung-gu, Dong-gu and Michuhol-gu, which have been excluded from a lot of new public services for a lack of feasibility. We are going to come up with a blueprint this year by setting up a long-term plan.
In the meantime, the need for renovation of old industrial complexes in the city is rising. Those complexes have come into downtown areas as the city’s urban areas have kept expanding. As a result, residential environments around them are deteriorating. What is needed under the circumstances is structural upgrading of the manufacturing facilities for odor and dust reduction and improvement of surrounding environments for better living and industrial conditions. We will launch pilot projects this year before further cooperation with the private sector.
On the housing welfare side, we will continue to supply rental houses in stages based on mid- to long-term supply plans. Supply will be based on specific needs and type diversification reflecting various demands from low-income households, newly married couples and college students.