SPACE & ENVIRONMENT is primarilyintended to help foreign experts and pro-fessionals in relevant fields understandoverall present situations of spatial plan-ning and policy of Korea, and publishedbimonthly by KRIHS.

KRIHS is a government-sponsored researchinstitute founded in 1978 to carry outresearch on territorial planning and poli-cies of Korea.

Future Prospects of Korea’s National 1

Territory

Industrial Location Policy Directions for 5

Green Growth

Diagnosis and Forecast of Real 9

Estate Market Using Consumer

Sentiments

Establishing a Housing Safety 13

Net for Public Rental

Housing Residents

International Collaboration 16

News & Announcements 19

SPACE & ENVIRONMENTDecember 2011, Vol. 46

By 2030, Korea will become the world’s tenth largest economicpowerhouse in terms of GDP and an advanced country with

USD 50,000 per capita GDP. The population will exceed 49.34million in 2018, only to decrease to 48.63 million in 2030. By 2030,Korea will become a highly aging society, with 24.3% of the totalpopulation aged 65 years and older. Single-person households willalso rise above 25%, and Korea will become a multicultural society.New technologies centered on INBEC1) or FT(Fusion Technology)industries will be developed, with a new breakthrough to bepresented to solve the problems of mankind through technologyconvergence and compound.

Housing Developments

Given the low birth rate, decreases in population, and housing supplyrate of more than 100%, Korea’s housing market will be stabilized.The housing demand is estimated to decline gradually from 460,000 in2010 to 410,000 in 2020 and to less than 410,000 in 2030. Housingprices are likely to be stabilized, and there is a low possibility of asudden turn in housing prices.

The demand for small houses will increase, so various smallhousing types will be supplied and niche housing market will becreated. The demand for a second house for leisure and recreation isalso likely to grow, especially centered on waterfront spaces. Thesize and level of rented housing will become diversified, and demandfor rented housing will increase. Housing targeting specific purposesor demand brackets will need to be supplied.

Dwellings are a basic requirement for future housing, and e-

Future Prospects of Korea’s National Territory

KR

IHS

’ 33rd anniversary

Lee Yong-woo, senior research fellow

INBEC stands for IT(Information Technology), NT(Nano-Technology), BT(Biotechnology),ET(Energy and Environment Technology), and CT(Culture and Cogno Science Technology).

learning and tele-care functions are likely to becompounded with concepts of leisure space andworkplace. Thus, housing will be more convenientwith the newest functions and will include greenhousing through the combination of resourcesavings and technologies of energy production.People can enjoy a rural lifestyle even in apartments,and detached houses will be as convenient asapartments.

As for housing types, relocation toward theoutskirts is predicted to emerge in the forms ofpurchasing rural houses for retirees or second housesfor wealthy households. Meanwhile, as unmarriedsingle-person households and elderly households areexpected to prefer residing in the city area, housingtypes will be diversified. Multi-habitation andinvisible families will increase, and internationalmulti-habitation will emerge.

Futures of existing houses will depend on regionsand housing types. The existing apartments inmetropolitan areas are expected to be remodeled orreconstructed, and those in agricultural, mountainous,and fishing villages are likely to become decrepit.Low-rise housing can be redeveloped as apartmentsor town houses. Rural housing in metropolitan areasis projected to be repaired or used as second houses.

Industrial Location

One promising future industry is the FT industry,wherein INBEC technologies are combined. The FT

industry is expected to developcentered on metropolitan areas,where a high level of humanresources and implicit knowledgecan be easily acquired and whereinfrastructure services such astransportation, communications,business, and living environmentsare well established.

Location demand for manufacturingindustry will change according tointernational competitiveness.Important variables related to thedemand for future industry locationsinclude the advent of the Chineseeconomy and internationalcompetitiveness of the industry. Ifstructural enhancement fails in thefuture, the decline of location

demand for key industrial clusters in the SeoulMetropolitan Area, Chungcheong, and Yeongnamregions is predicted. Meanwhile, when the networkwith China’s three major economic regions namely,Chang Jiang, Zhu Jiang, and trans-Balhae isstrengthened, the demand for industrial location in thewest coast regions can increase.

Industrial spaces will become compound, rented,and eco-spaces. The overall need to develop large-scale industrial complexes led by the public sector isexpected to diminish. Futures of industrial spaces inthe metropolitan areas can be compounded intohybrid types. The private sector’s weight canincrease the industrial location supply, and thedemand for rental locations is expected to rise.Moreover, intelligent and green industrial spaces areexpected to become popularized as eco-spaces.

Transportation

Traffic jams during rush hour will be eased. Theneed for passage and the number of passing cars andpeople are predicted to decline. The time to work atcompanies will also be reduced.

Public transportation means in metropolitan areaswill be diversified. In metropolitan areas, publictransportation means including city railways can bediversified and the transportation sharing ratio islikely to increase. To ease traffic jam in metropolitanareas, policies to reduce traffic demand and parkinglimit systems in city centers are expected to be

2SPACE AND ENVIRONMENT

Figure 1: Prospects for Korea’s per Capita GDP

Source: Presidential Council for Future & Vision, Data Presented to the 7th CouncilMeeting, in 2010.

*KDI: Korea Development Institute, Future Vision 2040**GS: Goldman Sachs, Global Economics Paper***Vision 2030: The Presidential-Advisory Committee for a Policy Planning, A

Comprehensive Long-term National Strategy

actively implemented.U-Green cars and roads will become popular. The

number of cars per 1,000 people as well aspreferences for cars are likely to continue to rise andat least one out of every two people owns onevehicle. In other words, every car owner over theage of 20 has more than one car. In the future, moreenvironmentally friendly and smart cars will becomeprevalent, contributing to considerations for basicfunctions such as quality, price, and fuel efficiency.U-Green roads including smart roads and solarenergy roads may become important as well.

Super high-speed railway network will beexpanded, and spatial structure of both nationalterritory and Northeast Asia will be reorganized.Since new national territorial axes are projected tobe shaped along a new super high-speed railwaynetwork on the east, west, and south coasts, thewhole national territorial axes are expected to bereorganized. Major cities will most likely be onehour away. Urban development and city regions canbe consolidated by being centered on stationsinfluencing areas of the high-speed railway network.

New logistics systems including an undergroundtube, container conveyor belt, and high-speedlogistics trains will be adopted, and an unmannedautomatic container transportation system is

projected to become operational. Thus, logisticsspeed will improve innovatively. A multimodalsystem in which passengers can transfer to otherforms of transportation and cargo can be shippedmay develop. If the North Pole route is opened dueto climate change, the logistical competitiveness ofKorean ports will be enhanced in Northeast Asia.

Land Use

Environmental value of farmland and mountainousland will improve. Farmland is expected to bereduced, thus, securing adequate farmland willbecome critical to the food security dimension. Thevalue of mountainous land can be re-valued as theperception of the forest's carbon absorption functionis enhanced. Residential demand by peoplereturning to farming or retirees seeking secondhouses in agricultural, mountainous, and fishingvillages located in easily accessible places orsurrounded by superb natural landscapes is expectedto increase.

Waterfront spaces are expected to be activated asleisure, cultural, and health spaces. In particular, inwaterfront spaces along city rivers, cultural andinformation exchange functions can be consolidatedthrough approaches between city centers and

3 December 2011

Figure 2: Korea’s Peak Population by Age Group

Source: The Korea National Statistical Office, Population Projections for Korea, 2006.

waterfront spaces. The spatial structure of the citycan also be shifted from the long-term perspectivecentered on waterfront spaces.

Diverse demand for leisure tourism will increase.As leisure time increases, people can enjoy diverseleisure activities and in particular, city leisuretourism is projected to rise. Leisure tourism inagricultural, mountainous, and fishing villages witha high attraction factor can be activated. However,benefit disparities arising from leisure tourismservice between cities and between income bracketsare expected to persist.

Demand for urban land will increase gradually.Although the rate of increase in the demand forwhole urban land is predicted to slow down, thedemand for public land is expected to rise. Whileenergy-efficient management of national territoryfor green growth is emphasized, urban regeneration

is likely to be a general trend rather than anew development project. Regionaldifferences in urban regeneration patternsare likely to occur.

Large cities will become multi-layeredand compound. City spaces centered onlarge cities are likely to become multi-layered and compound. As more high-riseand underground buildings are built incities, a disaster-prevention, pleasantenvironment will be critical.

City services will become intelligent,diverse, and barrier-free. Future cities areexpected to become intelligent with thedevelopment of science and technology.Demand for various city services willincrease, and zero disturbances are likely tobe a general trend. However, benefitdisparities can deepen according toresidential area and income level in termsof future intelligent, diversified, andbarrier-free city services.

Abnormal climate changes are projectedto take place more frequently and strongly,thus, natural disasters will frequently occurand become more large scale. Facilities andservices for the underprivileged arepredicted to increase. Despite the lowpossibility of disasters arising fromearthquakes and tsunamis, they cannot becompletely excluded.

Future Prospects of National Territory andPolicy Agenda

Concerning the common future images of nationalterritory, perceptions of sustainable nationalterritory development are enhanced, the response todemand for land use focuses on urban regeneration,and land use becomes diversified. Although a U-Green national territorial era is unfolding, the imageof national territory shows the occurrence of naturaldisasters due to severe rainstorms or super typhoons.By wrapping up the impacts of megatrends onnational territory and future scenarios, a desirableimage of national territory has been established as"Sustainable U-Green National Territory."

In the future, the demand for the development ofnational territory is not likely to increase as much asit did during its high-growth period, relying on

4SPACE AND ENVIRONMENT

Figure 3: Change in Population Aged 35-54 and Housing Price Indices

Figure 4: Concept of Second Home

Source: The Korea National Statistical Office, Analysis on Factors of SocialChange over the Next 10 Years and Implications, 2009.

changes in population, industrial structure, andindividual consciousness. Accordingly, the softpower of national territory, which enhances both thehealth and beauty of national territory by utilizinginherent natural resources for value-addedresources, will be more important than the hardpower of national territory, such as quantitativeexpansions of housing, industrial location,transportation, and infrastructure. Without

development projects focused primarily on theoutward expansion of developed areas, there is aneed to transform national territory into safe,convenient, and pleasant spaces where various usersof national territory can manage their own economicactivities or everyday lives.

Lee Yong-woo(ywlee@krihs.re.kr)

The term “green growth,” which was coined tocope with climate change, is becoming a

prerequisite for local development and a newparadigm affecting various fields in society. Greengrowth requires change in life and territory use aswell as change in industrial technology.Accordingly, applying the new paradigm of greengrowth is being common in various fields, such aseconomy, city, and transportation as well asindustrial location policy.

The three main goals of the Korean IndustrialLocation Policy are as follows: smooth supply ofindustrial land and reasonable arrangement of theindustry; balanced development of territory andcontinuous promotion of industrial development,and; balance between industrial locations andenvironment. The development of the industrialpark by the public sector has been applied as themain means to accomplish these goals.

Regarding the goal of the industrial location

5 December 2011

Industrial Location Policy Directions for Green Growth

Ryu Seung-han, research fellow

Figure 5: Changes in Travel Time from Seoul to Busan by Train

6SPACE AND ENVIRONMENT

policy through its relation with green growth, it canbe classified into the industrial location policy forthe green industry and the industrial location policyfor the creation of green territory.

Fostering the Green Industry

Despite the international attention, much controversyremains regarding the range of the green technologyindustry, which can also be divided into variouscategories. Statistics Korea is using the term“environmental industry” in the same breath as thegreen industry. It is defined as activity that producesgoods and services to measure, prevent, control, andminimize environmental factors harmful to water, air,and soil as well as waste, noise, and issues related tothe environmental system. This includes variouskinds of industries such as the new regenerationenergy industry to use resources and energy moreefficiently as well as treat or prevent pollution. It canbe divided into three categories: pollution control,clean production, and resource management.

Current Status of Korea’s Green Industry

As of 2007, the green manufacturing industry inKorea employed 736,253 persons, or 22.08% of theentire manufacturing industry. Compared to 1997,employment in the green manufacturing industryshrank by an average of 0.53% per year, fallingshort of the increase in employment in themanufacturing industry by 0.07% during the same

period. Such declines are definitely different fromthe general expectation; i.e., the green industryshows a higher rate of increase in employment. Themore important fact is that the rate of individualcompanies that actually advanced into the greenindustry is unlike the rate of firms classified asgreen growth companies by the Korea StandardIndustrial Classification extremely insignificant.

For example, a survey conducted by the KoreaFederation of Small and Medium Business revealedthat only 2.4% of small and medium businessesadvanced into the green industry, with only 7.9%attempting to do so. Specifically, there are only afew companies that fall within the category of thegreen industry in the Korea Standard IndustryClassification and actually participate in the greenindustry; thus, the Korean Green Industry is still inits infancy.

Meanwhile, according to the regional distributionof the green industry, the green industry is said tobe growing faster in the low-developed area.According to the change in employment in thegreen industry in each province for the last 10 years,among areas where employment in the manufacturingindustry recorded positive growth, all areas thathave a higher rate of increase in employment in thegreen manufacturing industry than that of the entiremanufacturing industry show relatively lowdevelopment level for the manufacturing industry.This can explain why low-developed areas in Koreahave recently taken a keen interest in attracting thegreen industry.

Still, the green industrial location can hardly besaid to be widespread to the low-developed areabecause the Korean green industry currently has thecharacteristics of a traditional manufacturing

Figure 1: Goals of the Korean Industrial Location Policy

Figure 2: Areas with Employment Rate of 50% in Each Industry

(%)

industry that is stronger than a true green industry.Moreover, even the green industry located in thelow-developed area tends to be concentrated on agrowth pole developed in that area. According tothe location of the green industry in Eup(town),Myeon(district), and Dong(neighbourhood), 13.8%or about 3,500 Eups, Myeons, and Dongs in Koreaaccount for 50% of employment in the entireindustry. In comparison, 3.6% and 1.8% make up50% of the employment in the entire manufacturingindustry and green manufacturing industry,respectively. Such a tendency has not changedduring the last 10 years.

Measures to Boost Green Industry

As a result of analyzing the correlation betweenemployment in the green manufacturing industryand other elements to examine the factors affectingthe location of the green manufacturing industry inEup, Myeon, and Dong, employment in the greenmanufacturing industry is most closely related tothat in other manufacturing industries. This resultsuggests that it is difficult to achieve the objectivewith the development of an industrial park by tryingto attract only companies that mass produceproducts in the field of green industry because theKorean green industry is still at an initial stage ofgrowth, with a strong connection with the existingmanufacturing industry.

Thus, the need exists to promote the industriallocation policy to foster the green industry focusingon support for the greening of existing industries, theconstruction of clusters among related companiessuch as an eco-industrial network rather than physicalagglomeration, support for the commercializationand cultivation of markets, support for the installationof public facilities required for the green industry,etc. The development of industrial parks should alsobe promoted by focusing on the small-scale sciencepark to support the commercialization of keytechnology instead of aiming at attracting massproducing companies. In addition, the promotion ofthe project should be reviewed at the great-sphereeconomic bloc or the national level not at the localgovernment level to secure economies of scale forfacilities.

Creating Green Territory

From the perspective of territory development anduse, the most important task for green growth in theindustrial location policy is to suppress thehaphazard, unnecessary development of industrialland while simultaneously establishing a greenimage not gray for the industrial land. The maingoal of the Korean Industrial Location Policy is tosupply industrial land intentionally and collectivelyby developing the industrial park. Despiterestrictions on the haphazard development of

7 December 2011

Figure 3: Annual Average Rate of Increase in Employment of 16 Metropolitan Cities

factory sites for the last 40 years, the industrial parknow makes up only approximately 50% of the entireindustrial land in Korea.

Meanwhile, the government has not given anysupport to the industrial cluster except for theindustrial park to encourage individual plants torelocate to the industrial park. However, this resultled to the increase in industrial areas wherein theenvironment or infrastructure is not properlymanaged, not the relocation of the company to theindustrial park from the outside.

Tasks to Promote Policy Effectiveness

Accordingly, the need exists to establish ameasure to secure the effectiveness of theindustrial location policy as follows: first, preparesupport measures to promote the business locationin the industrial park and, second, minimize thedamage from thoughtless development to theenvironment caused by the factory locationoutside the industrial park, while furthersupporting the maintenance of the environment inthe existing industrial cluster.

On the other hand, the development of theindustrial park does not always contribute to thecreation of a green territory. Nowadays, thedesignation of industrial parks is rapidly increasing inKorea. Despite the gradual slowdown in the growthof the manufacturing industry, the area of industrialparks designated since 2000 is larger than that in the1970s, when Korea saw sudden industrialization.

Accordingly, people have expressed concernsabout the excessive supply compared with demandand the long-term neglect of the designatedindustrial park without factory construction. On theother hand, many industrial parks developed in the1960s and 1970s are losing their competitivenessdue to the lack of infrastructure and green space.

Therefore, the government needs to enhance theefficiency of land use by promoting the regenerationof the existing old industrial parks prior to thedesignation of a new industrial park. Theregeneration of existing industrial parks bringsabout various effects, such as the improvement ofurban environments, the supply of businesslocations, and the minimization of damage tofarmland and forests. However, huge costs will berequired to secure infrastructure or public facilitiesbecause most of the industrial parks are located in

cities. Thus, it is impossible for companies to bearthat cost.

Accordingly, the government needs to shouldersome of the projected costs to ensure the economicfeasibil i ty of such regeneration projects.Furthermore, the regeneration of small factorysites neglected in cities needs to be promoted. Asurvey by the Korea Industrial Park Corp. revealedthat 196 companies among those with 100 or moreemployees in the capital area recently moved tothe provinces, but most of their existing sites weredeveloped as housing sites.

In some areas, there are restrictions on theconstruction of houses on the existing factory site;such sites are now neglected due to the absence of aplan for application that can satisfy the stakeholders.Accordingly, the regeneration of small factor sitesshould be supported for the purposes ofemployment, including the regeneration of largeindustrial parks.

Going Green of Industrial Complex

The last task of the industrial location policy tocreate green territory is the greening of the industrialpark. As one of the representative land developmentprojects, the industrial park typically has a grayimage. The greening of the industrial park is aprerequisite to the realization of green territory aswell as one of the starting points to lead greengrowth. The greening of the industrial park which isspatially separated from other functions such asdwelling or commerce and which becomes anunwelcome facility can contribute to the greening ofnational territory and urban spaces as well asfacilitate the integrated development of industrial

8SPACE AND ENVIRONMENT

Figure 4: Area of Industrial Park Designated in Each Period of Time

9 December 2011

When real estate markets are in a stablecondition, fluctuations of real estate prices

can be explained by fluctuations in the present valueof profits. Note, however, that in reality, there areoften abnormal situations in which real estatemarkets should be explained mainly by extremechanges, such as surging real estate prices.

Previous studies analyzed, via various methods,Korea’s real estate markets and presented policyimprovement suggestions to advance the real estatemarket and increase policy effectiveness. Still, despitesuch efforts, some have expressed the opinion that theexplanation capabilities for the real estate marketshould be consolidated.

As of 2000, the real estate market in Korea hasbecome more segmented due to the expansion of thehousing supply and easing of socio-economicfluctuations, as well as more complex behaviors ofmarket participants. Consequently, it is even moredifficult to establish suitable policies by identifyingpossible changes in the real estate market, or tostabilize the market.

However, there is a strong argument that, ratherthan being due to a localized and segmented realestate market, this trend is primarily attributable to aphenomenon not easily explained by traditionaleconomic theories or measurement techniques. Thisargument posits that consumer behaviors in the realestate market take on various forms depending onthe real estate market’s internal environmentchanges. Accordingly, the consensus is growing thatconsumer sentiment should be actively reflectedwhen analyzing real estate markets.

Yet, proper means to reflect consumer sentimentshave yet to be found. Although some studies revealedthat coefficients change when a variable of consumersentiment is added to real estate prices, they were infact nothing more than what we perceived them to be.

It is well known that one of the most useful researchmethods to measure consumer sentiment is the survey,a non-quantitative method widely used in not only realestate markets but also general markets. Surveys helpto identify users’ disposition or recognition levelsregarding real estate markets. For instance, people

and urban, manufacturing, and living spaces.In addition, the greening of the industrial park has

environmental effects as well as positive effects onindustrial park developers, companies, andcommunities. Moreover, it is expected to improvethe image of the community, location environment,and health environment in the community;companies can also expect some positive effects,such as the improvement of efficiency in managingthe environment, reduction of expenses for wastedisposal, facilitated search for workers, andincreases in land values.

The greening of the industrial park requires areflection upon the elements of green growth fromthe planning stage. In addition, the need exists tosupport the construction of green infrastructures inthe industrial park, such as environmental treatment

facilities, new generation energy facilities, andresource recycling facilities.

Meanwhile, the enhancement of managementstandards for construction in the industrial park,reinforcement of responsibility for landscapingarchitecture on the factory site, and landscapemanagement in the industrial park, etc., should bereviewed, and a support measure should be preparedto ease the burden on business due to the rising costsexpected with the enhancement of standards.Finally, the need exists to review the plan tostrengthen the capability of the industrial parkmanagement agency to support the service functionrequired for green growth.

Ryu Seung-han(shryu@krihs.re.kr)

Diagnosis and Forecast of Real Estate Market Using Consumer Sentiments

Lee Soo-wook, research fellow

10SPACE AND ENVIRONMENT

tend to become more risk-averse when real estateprices fall, leading to an increase in housing sales. Onthe other hand, people are more risk-prone if housingprices rise, because they have higher expectations of afurther rise in housing prices. Or there is a distinctdifference in real estate value appraisals as perceivedby housing owners and tenants.

As described above, surveys allow us to quicklyidentify consumer behaviors in real estate marketswhich are greatly influenced by real estate policyand economic situations and subsequent consumerdecisions. In this regard, the survey is the mosteffective method of analyzing real estate markets.

Introducing the Real Estate ConsumerSentiment Index(RCSI)

The Consumer Sentiment Survey helps users moreprecisely identify changes in real estate markets. Somestudies conducted in the U.S. and the Netherlands havealready concluded that analyzing real estate markets by

measuring consumer sentiments has a strongerexplanation capability.

In Korea, however, there has been little effort toconduct consumer sentiment analyses and to calculateindices related to the real estate market as estimated bytrusted evaluation institutes. This has made it difficultto understand the real estate market in a more practicalway.

Realizing the importance of the issue, KRIHS hasconducted consumer surveys to accumulate data ofreal estate consumer sentiments since 2009. As aresult of its efforts, for the first time in Korea, theKRIHS-conducted “Real Estate ConsumerSentiment Survey” and its subsequent “Real EstateConsumer Sentiment Index (RCSI)” were approvedas national yardsticks by the National StatisticalCommittee in June 2010. Since August 2011,KRIHS has compiled and published the “Real EstateConsumer Survey Index” on a monthly basis.

The “Real Estate Consumer Sentiment Index” hasbeen well received, since it serves as a useful basis

Figure 1: Real Estate Consumer Sentiment Index by Region and Nationwide

11 December 2011

to identify real estate market trends and makemarket forecasts. KRIHS, a state-funded researchinstitution, enjoys public trust, particularly since ithas secured the longest published time-series data inKorea. For this reason, there has been a steadyincrease in the use of the index from various sectorsincluding the general public, experts, relevantindustries, and academia.

Conducting the Real Estate Consumer Survey

A survey analyzing consumer sentiment isconducted targeting 6,400 general households and2,400 real estate agents in 150 regions including Si,Gun, and Gu in Korea. The target areas for thesurvey are shown in <Table 1>. The survey isconducted by phone across different time periodsfor both real estate agents and general householdsduring the last week of each month and the lastweek of each quarter, respectively.

The survey contains 16 items, including housingselling/purchasing trends compared to previousmonth, housing rental/lease trends, housing and landprices and their transaction trends. Each item isdeveloped into an index and measured using the

following equation for analyzing and forecasting thereal estate market.

Compiling the RCSI

KRIHS has conducted surveys of generalhouseholds and real estate agents in 150 urbanregions in Korea to measure real estate consumersentiment and create a market outlook. The resultscomprise into the Real Estate Consumer SentimentIndex, which is built by combining the ConsumerSentiment Index for Homes consisting of housingsale and rent prices, demand and supply trends ofhousing and lease/rental, and housing and Jeonse (aunique housing lease system in Korean) transactiontrends with the Consumer Sentiment Index for Land,comprised of land sale prices, demand and supplytrends of land, and transaction trends of land. Insum, the Real Estate Consumer Sentiment Index is a

Classification Index

Downward phase

3step Below 65

2step 65 ~ 85

1step 85 ~ 95

Steady phase

Steady with downward tendency 95 ~ 100

No change 100 ~ 105

Steady with upward tendency 105 ~ 115

Upward phase

1step 115 ~ 135

2step 135 ~ 175

3step Over 175

Table 2: Classified Phase of the RCSI

Individual index equation by survey item :[(very high 1+high 0.5-low 0.5-verylow 1)/number of respondents 100+100

Region Classification

Seoul metropolitan areaSeoul Metropolitan City(25 Gus), Incheon Metropolitan City(9Guns/ Gus, except Ongjin-gun),44 Sis/Guns/Gus*

Local metropolitan cities 5 Metropolitan Cities(39Sis/Guns/Gus)

Local cities 33Sis/Guns/Gus

Table 1: Survey Areas for the RCSI

*Sis/Guns/Gus are the intermediate units of Korea’s administrative divisions, similar to cities, counties and districts of the U.S.

12SPACE AND ENVIRONMENT

comprehensive value system that aggregates overallmarket participants’ recognition of real estatebusiness cycles including housing, rental and land.

The Real Estate Consumer Sentiment Index(RCSI) is designed to measure levels of consumersentiment toward the overall real estate market trend.Thus, it is important to help users better understandthe system. The lowest and highest values of theconsumer sentiment index have been adjusted to be 0and 200 respectively. To show the level of consumersentiment by region, the consumer sentiment index isdivided into 9 classes and marked on the map (seeFigure 1 on page 10). Thus users can identify acurrent regional status in the index by region as wellas nationwide status, which is expressed in 3 stages(steady, upward, downward) and 9 steps (3 steps in

each phase) on the map.When the index is between 95~115, it is

considered that the level of real estate consumersentiment remained almost unchanged from theprevious month. Indices below 95 confirm adowntrend; over 115 confirm an uptrend of realestate consumer sentiment.

Utilizing the RCSI

Along with various social and economic indices, theReal Estate Consumer Sentiment Index serves as auseful tool to predict possible changes in the realestate market because it helps identify consumerbehaviors in the real estate market. As mentionedearlier, the Real Estate Consumer Sentiment Index

is closely associated with pricechanges, so it can predict aninfection point in real estate markets.

The evaluation results on verifyingcorrelation between real estate pricesand the Real Estate ConsumerSentiment Index indicate that theConsumer Sentiment IndexDiagnosing Real Estate appeared tocoincide with or lead by one monthagainst the fluctuation rates ofhousing prices in Korea, while theConsumer Sentiment IndexForecasting Real Estate had a lead ofone or two months against thefluctuation rates of housing prices inKorea.

As for the correlation between the

Figure 4: Changes of Consumer Sentiment Index Diagnosing/Forecasting Nationwide Real Estate

Figure 2: Consumer Sentiment Index Diagnosing/Forecasting Nationwide Real Estate

Figure 3: Fluctuation Rate of Housing Prices

13 December 2011

consumer sentiment indices, the ConsumerSentiment Index Forecasting Real Estate was foundto lead by about one month against the ConsumerSentiment Index Diagnosing Real Estate.

Analyzing and forecasting real estate markettrends using consumer sentiments is expected toincrease. Thanks to three years of efforts, KRIHShas built a solid foundation for analyzing andpredicting the market. If continuous efforts aremade to increase surveyed target groups andenhance the survey credibility, the Real Estate

Consumer Sentiment Index will become anupgraded model whose explanation power is moreconsolidated. Furthermore, efforts to publicize theexcellence of the model throughout the world willbe made. Then, it will not belong before readersencounter the KRIHS-initiated model through majorrelevant literature.

Lee Soo-wook(swlee@krihs.re.kr)

Korea’s housing policy has focusedon homes as buildings thus far. In

other words, the core theme of thehousing policy is: “How many homesshould be supplied, and where do theyneed to be supplied?” Regarding the low-income bracket, the question has beenhow many publicly supported rentalhomes or small-sized homes should besupplied and to whom they should bedistributed.

Note, however, that housing is one of themost fundamental factors in human life.Therefore, the resident’s quality of life aswell as residential space needs to beconsidered. Quality of life refers to thelevel of personal welfare or happiness. Aresidence is one of the extremely importantfactors that can enhance quality of life, butdoing so is difficult and requires solvingresidential problems. For this reason, acomprehensive approach should be takenwith regard to factors including income, education,and health.

The housing safety net is a system that protectsand supports the economic population bracket thatcannot typically afford to reside in healthy and safedwellings, and that suffers from poor quality of lifebecause residential expenses are excessive compared

to incomes. Therefore, housing policies for low-income residents should be approached from theperspective of building a housing safety net.

As a result of the continuous supply of publicrental housing for the past 20 years, Korea’s long-term public rental housings in 2009 numbered1,311,000 and accounted for 9.1% of the total

Establishing a Housing Safety Net for the Public Rental Housing Residents

Chun Hyeon-sook, research fellow

Figure 1: RIR, Monthly Average Management Costs and Management Costs/Income by Rental Type

number of homes in Korea (14,456,000). Note,however, that the percentage of long-term publicrental housing for more than a period of 30 yearsexcept for those publicly provided homes that weredesignated to be put on the market after a certainperiod of time, i.e., five years or ten-yearsamounts to a mere 4.8%, falling short of the averageof OECD countries.

Characteristics of Korea's Public Rental Housing

Korea’s public rental housing mainly consists ofthree types: the Permanent Rental Housing providedto basic living allowance beneficiaries, the PublicRental housing for periods of 5 years to 10 years,and national rental housing. The second type refersto homes converted into property to be sold after 5or 10 years of renting. The National Rental Housingis used as rental housing stock for 30 years, andresidents can live without time limitations when the

income requirements are met. Although national policy has

focused on the expansion of publicrental housing supply, now is the timeto seek efficient measures to managethe existing public rental housing.Aside from physical inventorycontrol, there is a growing need tomanage those who are waiting forpublic rental housing.

When the residential situations ofpublic and private rental housing arecompared, we found that residents oflong-term public rental housing leadmore stable residential lives thanks tolower management costs and longerresiding periods, although the averagesize of public rental housing isslightly smaller. The average residingperiod of residents of permanent

rental housing in the Seoul Metropolitan Area is 8.6years, which is the longest among the three mainresidential types mentioned above. Note, however,that the prolonged residing period also means that itis difficult to accumulate assets and overcomepoverty due to reliance on public residentialsupport.

We also found that the lifecycle distributionshave some differences according to rental housingtype. Depending on the household’s lifecyclestage, there is a need to adjust residentialconsumption. As shown in <Figure 2>, there arebig differences in the residential area per personaccording to lifecycle stage, with households ofretired people taking up the largest area. In Korea,however, residents of public rental housing are notallowed to move between regions where publicrental housing is located or within the sameapartment complex.

Thus, even when residential movement is

14SPACE AND ENVIRONMENT

Figure 2: Residing Period and Area per Person by Lifecycle

CategoryResiding

period (year)No. of rooms

used Area used (m2)

Area per person (m2)

Seoul Metropolitan AreaPermanent rental 8.6 2.1 32.7 12.9

National rental 2.8 2.2 49.8 16.5

Non-Seoul Metropolitan AreaPermanent rental 6.7 2.1 34.7 15.2

National rental 2.6 2.2 52.5 16.8

Table 1: Status of Home Usage

necessary, residential defects force residents toadapt rather than relocate. If a retired couple hopesto downsize to a smaller home after their childrenleave home, residential movement is impossible.

Since these problems were actually been causedby the concentration on public rental housingsupply arising from an initial lack of rental housing,no housing inventory management measures havebeen established. Thus, an integrated informationnetwork measuring the inventory of public rentalhousing, residents, and candidate residents shouldbe built.

Ways to Support Public Rental HousingResidents

The average income level of public rental housingresidents is lower than that of those who reside inprivate rental housing. Furthermore, these residentsare often financially unstable because many of themhold temporary jobs. Continual public support canlead to such problems as taking assistance from thegovernment for granted and a diminishing will towork. To encourage residents of public rentalhousing to actively seek a better life, jobinformation, consulting, and training need to beoffered in addition to housing. Offering job-relatedservices according to region of public rentalhousing is also desirable. Training in baking,cooking and the like can be activities that the low-income population can engage in easily.

Actually, baking training is already activelytargeting basic living allowance beneficiaries, andgood training results have been generated. There arealso public rental housing complexes that offer part-time jobs in the making and selling of handcrafts.All these activities can contribute to incomecreation and quality of life.

Child care and elderly care services are necessary,given the fact that the ratios of two-incomehouseholds and elderly people are high amongresidents of long-term public rental housing. Assuch, relevant facilities need to be built, consideringthat demand for after-school classes and libraries foryouth is higher than that for apartment units to besold. In the Suseo permanent rental housingcomplex in Seoul, the residents are actively engagedin chrysanthemum cultivation. When a saleschannel is developed, such plant cultivation canserve as a program contributing to income creation

beyond being a mere hobby. Studies on public rental housing have found that

demand for housing safety net services, includingdwelling, jobs, childcare, education, health, andmedical services, is high. Since it is difficult to offerall these facilities and programs in public rentalhousing complexes, complexes should ideally bespecialized. Childcare facilities and programsshould be offered in complexes with many children.Facilities and programs for elderly people need tobe provided specifically to those complexes withmany elderly people. Furthermore, movementbetween public rental homes needs to be facilitated.This way, a resident can choose to live in a housingcomplex where specifically needed facilities andprograms are offered.

For the housing safety net to be effective, variousfactors including specific programs and jobopportunities should function comprehensively.When there is no income generation, even if homesare provided, asset accumulation becomesimpossible. When there is no educational support, itis difficult for children to overcome poverty.Consequently, considerations of all these need to beincluded in the Act to Support the Quality of Life ofLong-term Rental Housing Residents.

When the act is revised to enable public rentalhousing residents to move freely between housingcomplexes, overall satisfaction and residentialsuitability can be enhanced, and more effectiveoperations can occur. To date, the main purpose ofthe relevant policy has been to increase the publicrental housing inventory ratio with an emphasis onproviding the rental housing. Now is the time toseek measures to properly manage rental housing aswell.

Chun Hyeon-sook(hschun@krihs.re.kr)

15 December 2011

16SPACE AND ENVIRONMENT

INTERNATIONAL COLLABORATION

2011 U-City World Forum Shedding Lighton a Sustainable Green City

The 2011 U-City World Forum (UWF) was heldOctober 13-14, 2011, in the port city of Incheon,hosted by the Ministry of Land, Transport andMaritime Affairs (MLTM) and sponsored byKRIHS. The forum sought to establish a globalnetwork and cooperation for a vision of citydevelopment.

Under the theme of “U-city for sustainablegreen city development and city regeneration,”the event brought together government officialsfrom overseas local governments that arepushing forward with U-city projects, U-cityexperts from research institutions, and privatecompanies across the world, to establish aninternational forum.

This year’s forum was also significant, as itintroduced Korea’s U-city project and U-CityWorld Forum to nearly 4,000 institutions aroundthe world with the support of domestic localgovernments and the European Union Chamberof Commerce in Korea (EUCCK).

The two-day forum included an inauguralassembly, conference, and business meetings. Inthe conference, KRIHS invited experts,including Dr. Marc Wolfram from IOER andMichael R. Linfield from The Philippines. Theyled the discussion on major problemsencountered in developing smart cities and newstrategies for globalizing the concept of ‘smartcity.’

The APMCHUD Seeks Cooperation in theHousing Finance Sector

The 3rd Meeting of the 3rd Bureau of APMCHUD(Asia Pacific Ministerial Conference on Housingand Urban Development) was held in Seoul,Korea on October, 28, 2011. All eight membercountries, including Indonesia, Iran, India, Iraq,Fiji, Jordan, Korea and Pakistan, attended toassess progress on the agenda selected in the2nd Meeting of the 3rd Bureau held in Nairobi,Kenya. On behalf of the Korea delegation, Dr.Kang Mi-na submitted a report titled “TheEvolution of Housing Finance System in Korea”and made a presentation on the history ofKorea’s housing and housing finance policy.The conference helped to raise Korea’s profileand strengthen international cooperation in thehousing finance sector.

Workshop on National Base Map, MapSymbol Standards, and a Master Plan forthe NSDI in Cambodia

The National Infrastructure & GIS ResearchDivision of KRIHS held a workshop onCambodia’s National Base Map, Map SymbolStandards, and Master Plan for the NSDI onOctober 19, 2011, in Phnom Penh, Cambodia.The two- day event, attended by approximately70 Cambodian government officials, wasdesigned to report on the progress made on aKOICA (the Korea International CooperationAgency) commissioned project to build

17 December 2011

Cambodia’s national base map and establish amaster plan for national spatial information andgather opinions on the results.

On the first day, the report on the establishedCambodian National Base Map was released andits outcome demonstrated for the participants. Dr.Shin Dong-bin introduced the Cambodian mapsand diagrams, approved by the Ministry of LandManagement, Urban Planning and Constructionof Cambodia on September 21, 2011, andcollected opinions from relevant Cambodiangovernment officials in the transportation andenvironment sectors. On the second day, Dr. KimKirl made a brief presentation on the overallCambodian NSDI master plan. This workshopwas well received by participants as bothinformative and educational.

GDPC Hosts Third Global Forum onDevelopment and Cooperation

On November 2, 2011, the Global DevelopmentPartnership Center (GDPC), a KRIHS affiliate,hosted the Third Global Forum on Developmentand Cooperation. Seventeen participantsattended, including members who hadparticipated in the previous two forums andprivate business individuals.

In the forum, Mr. Koo Yun-cheol, Director ofthe Ministry of Strategy and Finance, delivereda presentation titled “An Exploration Strategy ofNeo-Columbus for the Latin American Market,”focusing on the growing importance of the LatinAmerican market, that continent’s promisinginvestment areas and ways to make inroads intothe market. The presentation was based on his

three-year service with the Inter-AmericanDevelopment Bank (IDB).

Serving as a bridge between foreign traineesand persons from domestic private companies,the GDPC will continue to host a series ofdevelopment forums with a view to providingan opportunity for all to share knowledge andpromote mutual exchange. The 4th forum willbe held to time with the 1st anniversary seminarfor the GDPC.

ULI Vice President’s Lecture on the Globaland US Real Estate Market

On October 12, 2011, Dr. Uwe S. Brandes, VicePresident of Initiatives at the Urban LandInstitute (ULI) and advisor to Korea’s Ministry ofLand, Transport and Maritime Affairs (MLTM),gave a lecture titled “Prospects and Major Issuesof the Global and US Real Estate Market.”

In this event, Mr. Brandes first introducedULI and discussed the Global and US RealEstate Market from the viewpoints ofprivatization, response to climate change, and the global economy. Attended by 12

18SPACE AND ENVIRONMENT

participants, including Dr. Sakong Ho-sang,Director of the GDPC, the ensuing Q&A sessionfocused on the characteristics of ULI as a bodycooperating with the World Bank and ULI’smulti-sector strategy to deal with climatechange.

ULI is a nonprofit research and educationorganization supported by members in 95countries worldwide. It represents the entirespectrum of land use and real estatedevelopment disciplines’ working in privateenterprise and public service efforts.

The KRIHS-TCPA UCL Joint Seminar onthe Transit-Oriented Corridor for theGreen City

The seminar on Transit-Oriented Corridor forthe Green City was held on October 24-25, 2011in London. It was jointly organized by KRIHS,the Town and Country Planning Association(TCPA), a planning and environment body inthe UK, and University College London (UCL).The seminar was attended by researchers andprofessors from the TCPA, the UCL, andKRIHS, including Dr. Chung Jin-kyu and SeoMin-ho. Dr. Chung introduced KRIHS and theGlobal Development Partnership Center(GDPC) and discussed ways to promote jointcooperation research between the threeinstitutions on realizing Green cities and Seopresented the concept and effects of establishinga public transportation corridor when creatingGreen cities. Michael Chang from the TCPAintroduced the institution and presented cases of

building transit-oriented corridor in Europe andtheir implications.

Early this year, KRIHS and the TCPAconducted joint research on building a publictransportation corridor to realize the Green Cityand plans to further promote their researchcooperation in the Green City and publictransportation sectors. KRIHS will seek a jointresearch with the UCL, with which KRIHSsigned an MOU on finding polices for urban andtransportation projects and overseas’ citydevelopment efforts

Chief Demographer of SCAG DiscussesRegional Planning of the US

On September 20, 2011, Dr. Choi Seong-youn,Chief Demographer of the Southern CaliforniaAssociation of Governments (SCAG) wasinvited to discuss “Policies and Trends ofLinkage and Cooperation between Regions ofthe US.” Dr. Choi made a presentation onSCGA’s role, its process of consultation, andcooperation practices, and explained the processof US regional planning, which involves a longperiod of consultation based on trust betweenregions. It presented important implications forKorea’s regional policy.

SCAG is a metropolitan planning organizationin Southern California, representing 6 counties,191 cities and more than 18 million residents.SCAG undertakes a variety of planning andpolicy initiatives to encourage a moresustainable Southern California.

19 December 2011

The Fourth 2011 Digital National TerritoryExpo Held

The Fourth 2011 Digital National Territory Expokicked off on October 26, 2011. The four-day event,one of the Korea’s largest gatherings for the spatialinformation sector, was hosted by the Ministry ofLand, Transport and Maritime Affairs (MLTM) andjointly organized by KRIHS, the Korea CadastralSurvey Corp (KCSC), the Korea Land and HousingCorporation (LH), and the Korea Association ofSurveying & Mapping (KASM). The global-scaleevent was joined by big- name IT corporations, SKT,KT, DAUM and Samsung SDS, SK, C&C, to name afew, and also 100 relevant government departments,local governments, companies, universities andresearch institutions. This year the expo was heldtogether with the inaugural assembly of the UnitedNations Forum on Global Geospatial InformationManagement (UN-GGIM) and a leadership meetingof the Open Geospatial Consortium (OGC),attracting further global attention.

At the opening ceremony on October 26, 2011,close to 1000 high- ranking government officialsand members of the National Assembly attended,including Prime Minister Kim Hwang-sik; the ViceMinister of MLTM, Han Man-hee; and KRIHSPresident, Park Yang-ho. In his keynote speech,Mark E. Reichardt, Chairman of OGC, highlightedthe influence of spatial information, its applicationpractices, and its future direction on a global level.

On the sidelines of EXPO, the 15th internationalseminar on OGC Korea Interoperability Day was

held on October 27, 2011, jointly by KRIHS and theKorea Institute of Construction Technology (KICT)to discuss measures to seek global cooperation nrealizing a global spatial information society. Theseminar featured presentations by seven experts fromKorea, Italia, Canada, Japan, Taiwan, and Vietnam.Another international seminar held on the same daywith the theme of “National and RegionalPerspectives on SDI Policy,” was jointly organizedby KRIHS and the Open Geospatial Consortium(OGC). This event aimed to share the best practicesconducted in America, Asia, and global organizationsand discuss measures to boost cooperation.

On October 28, 2011, a seminar titled “ServicesUtilizing Spatial Information” was held to target thegeneral public and promote the establishment of asystem of trade areas analysis and its applicationpractices and raise awareness of the applicationpotential of spatial information.

In the expo, KRIHS showcased the Korea PlanningSupport System (KOPSS) and the Land UseRegulation Information System (LURIS) at its booth.KOPSS is a computer tool used to support sustainabledevelopment, Green growth, participatory urbanplanning and the transparent planning process.LURIS was exhibited along with the UrbanPlanning Information System (UPIS) and theArchitectural Information System (AIS) to helpvisitors understand the complete process from landuse regulation to urban planning and building.

Seminar on Preparedness for the Age ofCentenarians Launched

In a KRIHS professional seminar held on September30, 2011, Dr. Kim Eun-jung gave a presentation onthe “Directions and Future Tasks of Urban andNational Territorial Policies in Preparation for theAge of Centenarians,” which were mainly focusedon urban, housing, and transportation sectors. Theseminar was meaningful in that it offered anopportunity to examine the policies to beimplemented in the national territory and urbansectors in preparation for the age of centenariansand also collect a wide range of opinions to reach a

NNEWS & ANNOUNCEMENTS

consensus on drawing up related policy tasks.Moderated by Dr. Sohn Kyung-hwan, Vice-President of KRIHS, the discussion session wasattended by relevant government officials,professors, and experts from the Ministry of Land,Transport and Maritime Affairs (MLTM), the dailynewspaper Dong-Ah Ilbo, universities including theUniversity of Seoul, KRIHS and the Land andHousing Institute (LHI).

Federal Chamber of German Architects SeeksCooperation with Korea

On October 26, 2011, the Federal Chamber ofGerman Architects visited the Architecture & UrbanResearch Institute (AURI) to discuss ways tocooperate with Korean experts and organizationsdedicated to construction and urban planning. In adiscussion meeting, the visited members of theinstitute including Tobias Jortzick, CEO of MarinaStankovic Architekten BDA discussed Germany’sterritorial development systems, its environmentfriendly integrated designs, and ways to regenerateand preserve cities or historic monuments. Themeeting served as a good opportunity to share theexperience of German experts in the construction,urban design and landscaping sectors, setting forth aclear future direction for Korea’s urban architecture.

The KRIHS 33rd Anniversary Logo Unveiled

On October 4, 2011, KRIHSin celebration of i ts 33rdanniversary, unveiled i tslogo, symbolizing KRIHStaking a giant leap forwardand creating a new pathtoward the future. KRIHS hascontributed to balanceddevelopment of the national terri tory andimproving the quality of life since its inception in1978. It has implemented government policiesthrough conducting approximately 2,000researches. In a ceremony commemorating its33rd anniversary, KRIHS pledged itself again tobecoming an excellent state-funded institution andleading national territory development policy inthe G20 era.

Korea Research Institute for Human Settlements (KRIHS) iscommitted to improving knowledge and understanding of theconditions and problems of the nation’s resources and theirinteractions with people. It assists the government informulating long-range development plans and makes policyrecommendations on related matters.

KRIHS carries out various activities to collaborate with theinternational research community in solving theoretical andpractical problems concerning human settlement issues andplanning. Also, it provides research expertise and consultingservices along with training programs for foreigngovernments and institutions.

Copyright c December 2011Korea Research Institute for Human Settlements254 Simin-daero Dongan-gu Anyang-si Gyeonggi-do, 431-712, KoreaTEL: 82-31-380-0164 FAX: 82-31-380-0474 E-Mail: gazette@krihs.re.krHomepage: www.krihs.re.krPublisher: Park Yang-ho Editor: Kim Hyun-sik Editorial Committee: Chung Jin-kyu, Jo Jin-cheol, Kang Mi-na, Kim Eun-jung, Kim Kirl, Kim Myung-soo, Lee Yoon-jeong, Lim Jeong-chun, Seo Yeon-mi, Yoon Ha-jung

KRIHS GAZETTE December, Vol. 46

20SPACE AND ENVIRONMENT

KR

IHS

’ 33rd anniversary