This chapter looks at the major policy elements of land use planning and urban regeneration in Korea. It begins with an analysis of the institutional framework for urban regeneration emphasising the complexity of the dedicated legislative framework. The chapter then moves to analyse urban regeneration in Busan, as a case study. It highlights the need for adopting efficient land use and urban regeneration programmes to strengthen the city’s economy. It argues that public assets and infrastructure may act as catalysts for urban regeneration. The discussion stresses that brownfields are important assets for urban regeneration and investment. The chapter then analyses how land-use plans and urban regeneration could be operationalised by focusing on density, zoning and floor area ratios. Finally, the chapter presents some policy recommendations to revamp urban regeneration strategies in Busan.
The Governance of Land Use in Korea
Chapter 2. Urban Regeneration and Land Use in Korea
Abstract
Land use and urban regeneration are inextricably linked as mechanisms to achieve sustainable urban development. Land use determines health, environmental, social and economic outcomes and its governance cuts across numerous policy areas. For it to be effective, sectoral issues must be co-ordinated across a territory, between institutional actors and between levels of government. However, land-use planning and policies cannot prevent urban decline, economic shocks and disinvestment; to be effective they must be designed and implemented alongside economic, social and environmental plans and polices. Urban regeneration is “a comprehensive and integrated vision and action which leads to the resolution of urban problems and which seeks to bring about a lasting improvement in the economic, physical, social and environmental condition of an area that has been subject to change” (Roberts, 2000[1]).
The institutional framework for urban regeneration
The evolution of urban regeneration in Korea
The Korean national government introduced comprehensive urban renewal programmes in the 1960s in response to the negative impacts of rapid urbanisation and industrialisation (OECD, 2018[2]). Since then, land use, spatial planning and regeneration aligned to pursue long-term economic growth and development (United Nations, 2016[3]). As in most OECD countries, this approach has not shielded Korean cities from economic shocks and urban decline but rather highlighted the need for integrated policy making and delivery. Like other OECD countries, Korea is now facing low growth, low birth rates and an ageing society. These challenges, together with decades of growth-oriented policies and housing-led renewal demand a different approach. In response, a critical shift in focus has emerged through the 2013 Special Act on the Promotion of and Support for Urban Regeneration which promotes a more integrated approach to respond to the more complex challenges of social inclusion, job creation and economic revitalisation.
The 2013 Special Act on the Promotion of and Support for Urban Regeneration marks a greater shift towards national and local governments working in partnership to create a more integrated framework for urban regeneration. The new framework comprises national guidance, strategic planning and implementation strategies focused on two thematic strands: economy and community. The system has been designed to allow for greater collaboration between levels of government and local stakeholders. National government assumes a supportive role to unlock local growth potential and to build local capacity. The Act set out a vision to make cities more competitive whilst promoting the well-being of citizens. As a result, urban planning laws were revised to encourage mixed-use development in inner city areas; funding for urban regeneration related programmes increased across government departments; regulatory reforms were implemented; and measures were taken to reinforce the competencies of cities to adopt Smart City technologies, mainstream social innovation and build community capacity (OECD, 2018[2]).
Based on the Act, national government supports local governments to create their own Urban Regeneration Strategic Plans through establishing the Basic Policy for National Urban Regeneration, a national urban regeneration strategy which aims to push forward urban regeneration in a comprehensive, planned, and efficient manner (Korean Government, 2016[4]). National government also plays a role in approving local governments’ Urban Regeneration Strategic Plans and Urban Regeneration Master Plans through the Special Committee on Urban Regeneration and the Working Committee. To help local governments establish their own Urban Regeneration Master Plans and implement urban regeneration projects, Urban Regeneration Assistance Organisations (URAO) were established in three public institutions: LH (Korea Land & Housing Corporation), KRIHS (Korea Research Institute for Human Settlements) and AURI (Architecture & Urban Research Institute) by the Ministry of Land, Infrastructure and Transport (MOLIT). These organisations support national and local governments through project management, consulting and training. In a similar way, local governments are required to establish Urban Regeneration Support Centres (URSC) to support the preparation of Urban Regeneration Strategic Plans, Urban Regeneration Master Plans, and relevant projects.
A dedicated legislative framework with a complex legislative environment
Urban regeneration is implemented through its own legislative framework of the Special Act on the Promotion of and Support for Urban Regeneration (2013), the Act on the Improvement of Urban Areas and Residential Environments (2002), and the Special Act on the Promotion of Urban Renewal (2005). However, urban regeneration operates within a complex policy context influenced by 40 other different legal frameworks (Lee, J. and Nam, 2016[5]). The basis for this is to ensure that policies align across government and that vertical and horizontal co-ordination are designed into the system. However, this complex approach can lead to inefficiencies and may require further reforms. For example, whilst the Special Act on the Promotion of and Support for Urban Regeneration allows local governments the flexibility to create tax incentives for urban regeneration, tax legislation has yet to be amended to make this possible (Lee, J. and Nam, 2016[5]).
Table 2.1. Examples of urban regeneration related laws
Source: Lee and Nam (2016), “Coherence study on Urban Regeneration in Korea”, Journal of the Korean Urban Management Association .
The election of President Moon in 2017 has led to an even greater emphasis on urban regeneration, strengthening the Act through a five-year Urban New Deal which will designate 500 projects supported by an investment of KRW 50 trillion (68 regions in 2017 and 99 regions in 2018). For the New Deal to meet its ambitious goal to achieve inclusive growth through sustainable urban development and urban regeneration regulatory coherence will be required.
Urban regeneration is a plan led system
The Special Act on Urban Regeneration stipulates that regional governments have responsibility for Urban Regeneration Strategic Plans, and that local governments are responsible for the Urban Regeneration Master Plans. The Strategic Plan focuses on socio-economic development, environmental protection and well-being, and spatial and non-spatial factors relating to urban regeneration in a given jurisdiction. The Master Plan is established once the urban regeneration areas have been designated. Following designation, a rigorous process of evaluation, project implementation and annual performance assessment takes place, as well as a comprehensive evaluation of outcomes at the end of the project and evaluation of the roles of various stakeholders. Figure 2.1 shows the overall urban regeneration planning structure.
Figure 2.1. Structure of urban regeneration related plans
Source: KRIHS (2015), A study on consolidated management method of planning process and procedure in legal urban regeneration projects.
Korea implements a comprehensive approach to planning through statutory plans adopted at each administrative level of government (Silva and Acheampong, 2015[6]). The system places a strong emphasis on regional economic planning at the provincial, metropolitan and “capital region” levels as well as on “special development regions”. However, Silva and Acheampong (2015[6]) observe that as in Greece, Japan and Sweden, the system in Korea is “extremely complex due to the large number of legislations and their interaction within and across administrative units at the national and sub-national levels”.
The current system has both strengths and weaknesses. The hierarchical planning system in Korea sets out to achieve vertical co-ordination between plans largely because the Special Act on the Promotion of and Support for Urban Regeneration states that the urban regeneration strategic plans should be set up in accordance with the Comprehensive National Land Plan and the Urban Master Plan (Article 4, 12). However, some plans can be partially overlapped which can lead to administrative inefficiencies. For example, the Urban Master Plan and the Urban Regeneration Strategic Plan analyse socio-economic development, environmental protection and land-use suitability in a given region which can lead to a duplication of efforts and resources. In small and medium-sized cities, the Urban Regeneration Strategic Plan and the Master Plan can also lead to duplication (KRHIS, 2015[7]).
Co-ordination is needed between levels of government and between plans
Multi-level co-ordination in Korea is a major challenge given the many plans (spatial and sectoral) that are formulated at different spatial scales, and a history of weak co-operative relationships between local governments who may see each other as competitors rather than as potential partners in development (OECD, 2012[8]). Innovations such as the Presidential Committee for Regional Development (PCRD) and the Special Committee for Urban Regeneration (2014) create an opportunity to align activities across national government and establish co-ordination mechanisms with other tiers of government. However, resourcing the committees with appropriate experts can prove challenging and certain projects require approval from both committees indicating that the system could become more efficient and effective if joint meetings or mergers were allowed (Park, 2014[8]).
Table 2.2. Degree of vertical co-ordination in spatial planning in OECD countries
Source: OECD (2015), Developing an Inventory and Typology of Land-Use Planning Systems and Policy Instruments in OECD Countries.
Urban Management Plans determine land–use and zoning whilst Urban Regeneration Strategic Plans designate urban regeneration areas. Zoning can only be changed through revisions to the Urban Management Plan when deemed necessary to implement urban regeneration projects proposed through the Urban Regeneration Master Plan. There is a lack of distinction between the Urban Regeneration Strategic Plan and Urban Areas and Residential Environment Improvement Plan. Although the former has broader planning scope, both plans concern old town revitalisation redevelopment projects which can create confusion and duplication (KRHIS, 2015[7]).
In most OECD countries, spatial planning and urban regeneration follow a “hierarchical” approach which provides “the basis for the integration of social, economic and environmental issues which are critical elements of urban regeneration into land-use allocation and activity distribution decisions at the various spatial scales” (Silva and Acheampong, 2015, p. 21[6]). In a hierarchical system, each tier of government has a defined role. In general, national governments assume strategic roles which shape policies, regulations and guidelines applicable to the whole country. Regional governments then set place-based framework conditions implemented and delivered through local plans and processes. However, planning and urban regeneration processes are often used to meet other strategic goals that require dedicated plans and instruments leading to a crowded policy landscape and funding pressures (Silva and Acheampong, 2015[6]), (OECD, 2017[9])
Spatial development plans should value the qualities of a place
Evidence from across the OECD highlights that spatial development strategies must go beyond indicating where major material investments should be directed and what criteria should govern land use regulations (OECD, 2013[10]) (Silva and Acheampong, 2015[6]). In other words, they have to be more than merely an aggregation of considerations and policy principles collected together in a plan or document. This suggests that their key task is to identify the critical relations among many agents which are likely to shape the future economic, social, political and environmental qualities of a territory. Thus, spatial development strategies exert influence by framing ways of thinking about and valuing the qualities of a place and of translating plans into reality. This work in turn helps to mobilise the many actors inventing the futures of places by shaping their understanding and guiding their investments towards more sustainable outcomes. The key to successful strategic planning is to have a persuasive and mobilising capability by facilitating multi-level participation. Likewise, it sets up demands for new ways of integrating ideas beyond simple conceptions of urban morphology and the built environment.
Urban regeneration in Busan
Busan’s economy depends on efficient land use and urban regeneration processes
Busan is Korea’s largest port city and the fifth largest container port in the world (Busan Metropolitan Government, 2017[11]). Key economic sectors include shipbuilding and marine industries, machinery, steel, and tourism. Creative culture, bio-health and knowledge infrastructure services are also important sectors of the city’s economy. Each of these sectors depends upon efficient land use and each has a direct correlation with urban regeneration in the city, as either the source of derelict sites or the beneficiary from regenerated sites. The economy of Busan is intrinsically linked to its approach to urban development and urban regeneration.
Urban regeneration has been a central feature of managing growth and development in Busan for the last decade. The city has sought to address complex regeneration challenges from large scale development projects related to the port, a former military base and industrial land to neighbourhood initiatives. Whilst national government is a critical partner for regeneration in Busan, the city has taken bold steps to create regeneration strategies and projects which build on its strong identity as a port city, an open and inclusive city and, in recent years, a creative city. Busan was one of the first cities in Korea to pursue “people-centred urban regeneration”. In line with shifting national priorities articulated through the 2013 Special Act, Busan Metropolitan Government (BMG) adopted its Declaration on the Urban Regeneration of Busan, which outlines changes in its urban policy from “development” to “regeneration”. To achieve sustainable urban development and people-centred urban regeneration, the Declaration commits to:
Realise creative urban regeneration through co-operation with civil society based on the dynamism and passion of Busan’s people
Establish the identity of Busan as a maritime centre and foster its unique geographical and cultural characteristics.
In 2015, these priorities shaped a new city-wide Strategic Plan for urban regeneration which will serve as the long term master plan for the city (Busan Metropolitan Government, 2015[12]). The creative city focus of the plan enables BMG to build on local identity and assets, renew deprived neighbourhoods and create jobs whilst accelerating the development of strategic sites which serve the global economy. Busan’s strategy-led approach has been critical to its urban regeneration efforts. OECD analysis highlights the critical role of urban regeneration strategies and plans to tackle complex problems, create cross-sectoral links, and build confidence (OECD, 2018[2]). Urban regeneration strategies enable cities to identify synergies across the development system, which, in turn, can be used to determine the phasing of interventions and thus optimise outcomes (OECD, 2018[2]). Moreover, they enable communities to consider how to use assets and opportunities fully to embrace change.
Lessons from across OECD countries suggest that continued efforts would be needed to ensure that neighbourhood projects are resilient and achieve viable long-term outcomes and that larger-scale strategic sites are shielded from external economic shocks. Strategic planning, public-private partnerships and finance are all areas that will need ongoing attention and re-appraisal to ensure that the 2015 Strategy and current master plans guide development, including urban regeneration at the centre and growth management on the periphery of the functional region.
Competitive positioning in a new global economic geography shapes strategic priorities particularly as regards major infrastructure investments and locations for new concentrations of business activities. It also highlights the importance of the cultural assets of a place to attract the skilled workers of the new knowledge industries and tourists. The need for environmental sustainability highlights both new conservation priorities and new ways of thinking about the flows of people, goods and waste products. The need for social cohesion leads to concerns for the quality and accessibility of particular resources, amenities and opportunities in the city and region. The central challenge to developing any sustainable metropolitan development strategy is the need for a more integrated approach to economic growth, social inclusion and sustainable environment as was the case in Cambridge, United Kingdom. Busan can draw on the 20-year approach to managing growth and aligning strategic interventions to consolidate land-use plans, urban regeneration and strategic site investment.
Box 2.1. Cambridge: the role of integrated planning and multi-level governance in urban areas
In the United Kingdom, the City of Cambridge is an example of how integrated planning and multi-level governance can unleash economic growth. Land-use planning, post-war green belt restrictions and fragmented governance had long restricted physical and economic growth in the city. In the late 1980s, the situation came to a head as restrictions on land supply were negatively impacting housing affordability and availability and most significantly, threatened to undermine the emerging role of the city as a global centre for science and technology – the “Cambridge phenomena”.
To face this challenge, local authorities (city, county and neighbouring East and South Cambridgeshire), the private sector and the University of Cambridge joined forces to safeguard the positioning of the city against competitors such as Harvard and MIT. Local authority collaboration became a driver for planned growth overseen by the new public body “Cambridge Horizons”. The integrated planning system supported economic development through the release of land for housing in the north and south of the city, increased densities and infill development in central areas, and a new village and town in South Cambridgeshire.
In 2014, the national government designated the City of Cambridge as a growth area enabling access to the National Growth Fund. This led to investments in transport and infrastructure to create a guided busway on a disused railway line, and the construction of access roads to open up sites in the southern fringe. Finance was provided through a revolving loan fund which in turn financed other transport projects such as the new station in the city. This funding mechanism unlocked the development of the new town, Northstowe, which had been stalled due to multiple factors such as complex land ownership, legal negotiations and the recession. The fund helped to safeguard developers’ contributions and ensure affordable housing provision.
Source: adapted from Monk S, Whitehead C, International review of land supply and planning systems (2013[13]).
Public assets and infrastructure may act as catalysts for regeneration
In Busan, the government, port authority and the private sector work together to deliver urban regeneration on key sites to support the strategic plan for the city. These partnerships are critical for large-scale urban regeneration projects and increasingly to help cities realise broader strategic objectives. In London, for example, collaboration between the Greater London Authority, Transport for London (TfL) and the private sector has led to a more strategic and co-ordinated approach to regenerating key sites and using public assets as catalysts for investment (Jeffrey, 2017[14]). Lessons emerging from the approach taken in London highlight the role of land value capture in urban regeneration, the need for specialist skills and capacity in the public sector, the importance of strategic site planning and, above all, the value of collaboration.
Box 2.2. Getting the most out of Transport for London’s land and property assets
Transport for London (TfL) has a significant land and property asset base in London, which now plays a pivotal role in funding transport investment and providing more affordable housing in the capital. The imperative for this new approach came in 2016 when TfL lost its capital grant from national government and thus needed to identify new revenue streams. In the same year, a new Mayor was elected and committed to addressing the affordable housing challenge in the city. A more strategic approach to transport and land use was adopted to secure ongoing investment in transport and infrastructure and release strategic sites to provide more affordable housing. The land assets of TFL amounted to 5 700 acres which had the potential of creating 500 major development sites. The Greater London Authority, TfL and 13 real-estate developers established a Property Partnership Framework (PPF). The PPF set out a strategic approach to public asset disposal, the creation of joint ventures for the development of sites and fulfilling the Mayor’s ambition to build more affordable housing. As well as facilitating new homes across the city, the PPF is also set to raise GBP 3.4 billion in non-fares income by 2023.
Source: Delivering change How city partnerships make the most of public assets, http://www.centrefgorcities.org (accessed 5 September 2018).
In Korea, innovative approaches, such as the Build-Transfer-Operate public private partnership model used for roads, seaports and railway projects, offer similar lessons for OECD countries. Because the private partner operates the project, funding comes from user fees. Additionally, when needed to cover costs, the government provides the Minimum Revenue Guarantee. The Build-Transfer-Lease model is used only for solicited projects of schools and dormitory or military housing. Because there are no user fees involved, the state pays a lease, or rent to a private partner. The state also covers the operating costs. It is a low risk, low return investment. In both cases ownership is by the state (Kim, 2011[15]) and, like the London example, demonstrates the effectiveness of the state using its assets to accelerate development.
Infrastructure has a critical role to play in urban development and urban regeneration. Many projects have important transport and infrastructure outcomes, for example, the City Deals in the United Kingdom all have long-term infrastructure projects that are part of integrated urban regeneration and growth plans. The costs of not planning infrastructure investment alongside urban development are significant. Infrastructure is costly and OECD member countries have developed innovative ways in which to finance infrastructure projects. In Korea, since 1992, local governments have utilised innovative financial resources based on the principle that building owners should pay for the demands they will place on local infrastructure (Lee, J. and Nam, 2016[5]).
Based on the Special Act, national government can provide financial support for Urban Regeneration Activation initiatives through full or partial grants or through loans (Special Act, Article 27 (Assistance or Financing)). Funding can be applied to a diverse range of interventions such as strategies, research, technical support, renovation, conservation and social innovation projects. National funding also supports local governments’ Urban Regeneration Master Plans through four types of financial support: i) pump-priming projects (Majungmul-projects), ii) central ministry-led projects, iii) local government-led projects, and iv) private sector-led projects. Among these four projects, priming projects are financially supported by MOLIT and other central ministries such as the Ministry of Culture, Sports and Tourism, the Ministry of Science and ICT, and the Ministry of Public Administration and Security.
The national government is a critical partner and investor in large-scale projects, such as the development of the railway and port areas, as well as more localised urban regeneration initiatives in Busan. Current levels of investment are around KRW 43.7 billion won in strategic sites, KRW 25 billion won in pump-priming projects and KRW 18.7 billion won in central ministry-led projects.
Urban regeneration in Busan: a mechanism for sustainable socio-economic development.
A key feature of the approach to urban regeneration in Busan involves initiatives to address the challenges emerging from the geography of the city and its rapid expansion during the Korean War. When the city was designated as the temporary capital of Korea its population increased eightfold. Absorbing significant numbers of refugees in addition to this new status as the capital city meant that all available land in the city was developed. To meet housing demand, poor quality unplanned settlements emerged in the hillsides and continued to develop during the 1970s and 1980s as low-skilled workers moved to the city. In many areas unplanned settlements have led to environmental degradation and social exclusion.
In Busan, communities living in unplanned districts developed strong place-based social connections, which now influence approaches to urban regeneration. In Korea, like in other OECD countries, early approaches to urban regeneration led to radical transformation and economic growth but often at the cost of destroying local communities and the landmarks associated with belonging and well-being (OECD, 2018[2]). Increasingly, approaches to urban regeneration became more inclusive and holistic as projects recognised the importance of preserving historic buildings, reinforcing the urban and social fabric of an area and, above all, putting citizens at the centre of regeneration efforts. BMG’s approach to urban regeneration seems to follow this path as communities are empowered to participate in decision-making processes. The national government further supports this approach through the people-centred Urban Regeneration New Deal.
Busan supports welfare through culture-led regeneration
Marking the shift towards more people-centred urban regeneration the Sanbokdoro Renaissance Project is an example of the new approach to regenerating hillside communities in Busan. The area was inaccessible and poorly served by public amenities, unemployment was high, schools were failing, and the community disenfranchised. From the outset, the project was a public, private and community collaboration. BMG ensured that policy and legislative frameworks aligned by co‑ordinating the Special Act on the Promotion of and Support for Urban Regeneration, Busan Metropolitan Government Ordinance on the Promotion of and Support for Urban Regeneration, and Busan Metropolitan Government Ordinance on Support for Creating Liveable Neighbourhoods. The Centre for Creating Liveable Neighbourhoods (the predecessor of the Urban Regeneration Centre) had oversight of the project, serving as the critical link between actors and stakeholders to build the capacity of local residents and to ensure that the actions led to meaningful outcomes for the local community.
The vision for the project emerged through an extensive process of community engagement and consultations. Residents co-owned the vision to regenerate the physical environment, strengthen the local community, transform the economy and develop cultural programmes and assets. The approach focused on outcomes for socially excluded communities and included training for the unemployed and business support and development. Co-operatives and social enterprises played critical roles and profits from tourism were re-invested into the local community. By 2016, 11 new businesses, 17 co-operatives and 2 non-profit organisations were being run by local communities (Busan Metropolitan Government, 2018[16]).
The Gamcheon Culture Village is another example of successful hillside regeneration through culture and welfare which is discussed in detail in Chapter 3. The 25 000 residents of the Gamcheon district and over 120 artists have co-created a community which now connects with the rest of the city. As part of the project, an abandoned school near Gamcheon Port is now a cultural complex where cultural and welfare functions are being provided together. Busan Metropolitan Government continues to play a critical role in supporting the initiative through an annual subsidy of approximately KRW 500 million.
Each initiative highlights the value of culture-led regeneration in neighbourhood renewal. In Korea, urban regeneration interventions have long appreciated the importance of culture as a catalyst to regenerate areas that have complex challenges (Hwang, 2014[17]). Similarly, in Europe culture has long been used to drive change in cities facing industrial decline and transition. Glasgow, Liverpool, Lille, Bilbao and Barcelona have all embedded culture into their city regeneration strategies, often as the catalyst to address broader challenges. Lessons from these cities highlight the need for an integrated policy approach which aligns the built environment with economic, social and cultural polices (Evans, 2004[18]).
The Busan examples are founded on integrated and inclusive planning which led to positive outcomes in terms of physical renewal, local economic development and community cohesion. The projects now contribute to the culture and tourism offer of the city. Supporting urban regeneration at different spatial scales, particularly at the neighbourhood level, is an important dimension of the approach taken in Busan and nationally through the New Deal. As in Korea, neighbourhood regeneration initiatives across OECD countries increasingly pursue community-led programmes. For example, Turin, Italy is experimenting with a new approach to neighbourhood renewal, which puts local residents at the centre of projects. The city is a pilot in the European Union Co-City initiative (collaborative management of “urban commons”1 to counteract poverty and socio-spatial polarisation) (European Commission, 2018[19]). The “urban commons” approach could be pursued in Busan as a means to formalise collaboration between the public sector and communities and help build local capacity to participate in urban regeneration efforts.
Box 2.3. Regeneration of community buildings in Turin
To tackle poverty and exclusion, Turin is creating a network of “urban commons” by transforming derelict sites into assets owned and maintained by local communities. The initiative is supported by the European Union and is a mechanism through which participating cities can innovate to create new strategic partnerships and service delivery.
In 2016, the city adopted regulations to establish “urban commons” as a formal mechanism for urban regeneration. Implementation is through formal pacts between citizens (including residents’ groups, associations and NGOs) and the city government. The pacts focus on rules to be applied, delivery and the monitoring of outcomes.
A network of neighbourhood houses (case del quartiere) are located across the city to support citizens and community groups wishing to form a pact and to build capacity to develop the sites.
The University of Turin plays an important role to support the initiative and has created new ICT platforms to engage citizens. It compiles a legal toolkit to support use of the regulation and a handbook regarding the implementation of the EU Co-City project.
Source: adapted from European Commission (2018), Turin turns abandoned buildings into drivers of urban regeneration, http://ec.europa.eu/regional_policy/en/projects/italy/turin-turns-abandoned-buildings-into-drivers-of-urban-regeneration (accessed 10 September 2018).
Housing renewal is at the centre of urban regeneration in Korea
In Korean cities, like in other OECD member countries, housing renewal is a critical element of urban regeneration, the aims of which are often broad ranging. Programmes need to be economically viable, socially and politically acceptable, deliverable, sustainable and co-ordinated (Future of London, 2011[20]). In Busan, the Gamcheon Culture Village and Sanbokdoro Renaissance Project are important examples of holistic urban regeneration which align housing renewal, economic and social development led by BMG. Housing renewal remains a priority in Busan, enhanced through the Urban Regeneration New Deal, its diverse range of interventions including the “Public Housing and Facilities Model” and low interest loans from the Korea Housing and Urban Guarantee Corporation (HUG) (OECD, 2018[2]). BMG should seek to capture the objectives of the New Deal beyond the programming period by embedding housing and economic development policies into the city-wide regeneration plan to drive local growth. Housing renewal thus addresses local needs and creates investment opportunities.
Brownfield sites are catalysts for sustainable regeneration and investment in Busan
The redevelopment of brownfield sites is an integral part of Busan’s approach to urban regeneration and sustainable urban development. Urban “brownfields” or previously developed sites, often located at or near the city centre, represent a major opportunity for cities to realise sustainable urban development and a more environmentally sound, economically viable and socially equitable urban function. The significant number of brownfield sites in urban regions is a result of shifts from industrial and manufacturing processes to service and knowledge-based economies with different technological needs, changing employment patterns and skills requirements. From small-scale neighbourhood renewal projects to large-scale port and military base projects, brownfield sites are recognised as strategic assets to help the city achieve its ambitions to limit urban sprawl and promote compact city policies. The sites are being used to create new economic areas along the waterfront, new housing and public spaces.
Brownfield sites also form part of the investment portfolio for the city. Busan, like many other cities, has substantial public assets in the form of brownfield sites, real estate, facilities, or other amenities which can be an opportunity for urban regeneration initiatives. They are part of the city’s investment proposition to the global market. Invest Busan is the marketing prospectus for key sites in the city. 11 strategic sites, many of which are brownfield, and major regeneration initiatives are marketed as the hub of the Northeast Asian economy, positioning the city as a maritime, cultural, logistics and financial centre (Busan Metropolitan Government, 2017[11]). As the competition for global investment becomes more pressing, cities such as Busan need to demonstrate that they are both more “investable” and more “investment-ready”. OECD (OECD, 2018[2])defined “investable” and “investment ready” cities as needing to “clearly demonstrate how good returns can be made on investments in their territory, and be ready to help make those deals attractive…..involved directly with measures to stimulate a strong deal flow of good quality propositions for financiers to evaluate” (OECD, 2018, p. 129[2]).
Cities, regions and national governments throughout OECD countries increasingly market key sites to international investors. The global real estate industry invests heavily in urban areas and operates at a global scale. Therefore, all levels of government need to align and proactively develop investment propositions which go beyond national markets. In the United Kingdom (Greater London Authority & United Kingdom Department of Trade and Industry, 2018[21]), national and city governments work together to capture global investors. In Germany, cities such as Hamburg position investment propositions to the global market as a means of accelerating regeneration efforts. Despite the strong domestic real estate market in Korea, Busan is similarly positioning strategic regeneration sites such as the ‘Eco-Delta City’ to global investors. Eco-Delta City is a mixed use waterfront development designed around smart, sustainable and water-based technologies. Through Invest Busan, BMG may wish to consider a more strategic approach to investment in partnership with national government and the private sector to create a portfolio of assets that can be used to achieve balanced growth across the metropolitan area.
Box 2.4. Brownfield sites as investment assets
In the United Kingdom, the Department of Trade and Industry supports cities in marketing strategic sites to global investors by emphasising their brownfield and regeneration credentials. This approach demonstrates public sector commitment and backing for key projects to share investment risk and to encourage investment outside of London. In Greater Manchester, a number of large-scale projects benefit from this collaborative approach. Airport City, for example, has become an Enterprise Zone attracting significant Chinese investment. The Combined Authority has adopted a dedicated skills and employment strategy for Airport City to create local jobs and to meet the needs of investors. In East Manchester, a similarly collaborative and long-term approach is pursued. Industrial decline had left a legacy of brownfield sites, high unemployment and social deprivation. However, following the 2002 Commonwealth Games, a long-term approach to regeneration emerged. The area went through significant physical transformation in preparation for the Games. After the Games, city leaders negotiated innovative land and property deals, which led to Manchester City Football Club purchasing the stadium and the city retaining the land asset to generate revenue. The local community was a critical actor in the planning of the site and the redevelopment of the area. City leaders were of the view that the site had to generate economic and social value. Investors committed to this approach by funding community infrastructure such as a swimming pool, attracting much needed retail facilities to the area and, more importantly, creating jobs for the local community. Manchester City Football Club is a committed partner to urban regeneration in the community and served as a catalyst for investment. In 2015, a 10-year partnership was agreed with a private equity company called Abu Dhabi United Group to build more than 6 000 homes in the area. Investors acknowledged the local vision and track record of the City Council on urban regeneration and delivery as an investment incentive. Development in Airport City and East Manchester boosted investor confidence across the metropolitan area resulting in significant job creation.
In Hamburg, the brownfield sites of the HafenCity port area have also become catalysts for external investment from new firms, real estate investors and development markets. A long-term approach of collaborative public and private sector engagement had been critical to the success of the regeneration initiative from the outset. However, in 2014, the remit of the Hamburg Business Development Corporation (HWF) was expanded. For over three decades, HWF had focused on attracting new employers to Hamburg and local economic policy. New responsibilities included marketing commercial properties, managing publicly owned land to serve the logistics sector and leading regeneration in East Hamburg. Other public agencies, such as HafenCity Hamburg and IBA Hamburg GmbH, aligned their strategies to accelerate investment across the city. In 2014, Unibail-Rodamco purchased the Überseequartier site for EUR 860 million to build new housing for the city.
Sources: Local Economic Leadership (OECD, 2015[22]); London Investment Prospectus ; Hamburg 2030: focus topics for urban development (City of Hamburg, 2015[23]).
Brownfield redevelopment incentives are common tools throughout OECD countries to regenerate inner-city areas (Silva and Acheampong, 2015[6]). Such incentives emerged to address the numerous challenges associated with brownfield sites such as high land values, decontamination costs and zoning constraints (Silva and Acheampong, 2015[6]). Brownfield redevelopment incentives have been used to positive effect in many cities by helping avert unsustainable urban expansion, increasing the asset value of the site and the surrounding area, increasing the local tax base, creating jobs, environmental protection and the effective use of existing infrastructure (OECD, 1998[24]) (OECD, 2017[9]).
Smart urban regeneration drives inclusive growth in Busan
Busan is now established as a leading smart city in Korea and beyond (Lee, 2017[25]). Sustainable urban development and, thus, urban regeneration initiatives in Busan include the U-City initiative, which aims to provide various ubiquitous city services and information to citizens anywhere and anytime through integrating urban infrastructure and ICT (OECD, 2018[2]). The partnerships that BMG has created with the private sector (Cisco and KT, South Korea’s largest telecom company) to deliver public services through cloud-based infrastructure have been critical to its success. The Busan Green U-City has invested over USD 300 million in the Busan Green U-City initiative to create community centres and provide urban services for citizens (Kramer and Chen, 2017[26]). In addition to large scale projects and city-wide service delivery, smart city approaches have been used to support and deliver citizen engagement in urban regeneration projects such as the Sanbokdoro Renaissance Project and the Gamcheon Culture Village. BMG is committed to mainstreaming smart infrastructure and services in all urban regeneration projects.
MOLIT committed to aligning smart city and urban regeneration agendas in 2017 through the launch of the Urban New Deal. In this sense, local governments are encouraged to embed the smart city concept into their Urban Regeneration Master Plan and Master Plans. Local governments can receive additional scores during the process of selecting Master Plans by the national government when they include smart city concepts into their Urban Regeneration Master Plan. Smart city thinking is founded on the concept of using ICT to solve urban problems, urban regeneration being a target area. To support this, the Presidential Committee on the Fourth Industrial Revolution designated Busan as a Smart City test bed. The “Eco Delta City”, near Gimhae Airport, will become a global logistics hub serviced through hydrothermal energy (Korea Herald, 2018[27]). Over the next five years, the government will focus its research and development capability and budget on Busan (and Sejong) and ease regulations to attract private investment to develop them into smart cities fed and connected by new technologies including next-generation networks, big data, artificial intelligence (AI), autonomous vehicles, smart grids and virtual reality.
Busan has joined the European Commission World Cities project (European Commission, 2018[19]), which began in 2016, to facilitate the exchange of information and good practices on regional and urban development policy issues. For example, Busan has signed a memorandum of understanding with Barcelona to collaborate on a number of shared challenges such as clean energy, public transport, urban regeneration and smart cities. Alliances will be forged between universities and research institutions and best practices will be shared on culture and tourism. (European Commission, 2018[19]).
This initiative builds on a longstanding tradition in the city to engage internationally and benefit from peer learning through a range of city collaborations. In particular, the 22@Barcelona project could be relevant for Busan as an example of urban regeneration through the creation of an environment suitable for innovation and collaboration between international and local stakeholders. A key lesson for Busan from this experience is the importance of a long-term vision to drive the project forward.
Box 2.5. The importance of a long-term vision in urban regeneration: 22@Barcelona
The 22@Barcelona project is one of the world’s first smart urban regeneration projects dedicated to creating an environment for the “creative classes” and aiming to maximise opportunities of international and local collaboration within and between sectors. Located in the Poblenou district, the area was a leading industrial centre producing metal, textiles and logistics. Industrial decline in the 1970s and 1980s had left a legacy of brownfield sites, unemployment and social exclusion. The city embarked upon a strategy that included its successful bid to host the 1992 Olympic Games, the creation of Barcelona Activa development agency in 1986, and strategic transport and infrastructure investments. The overall vison was to physically regenerate the city and to define a new approach to economic development based on entrepreneurship, innovation, tourism and inclusion.
The planning for 22@Barcelona began in 2000 as the city adopted a plan to transform the area into a high-tech innovation district. The site has become part of the urban fabric of the city through densification, mixed-use developments and transport connections. The public sector played a key role in investing in physical and technological infrastructure thus creating more than 3 million square metres of technologically advanced space. The investments attracted ICT firms, researchers and innovative firms. 22@ is now a successful innovation district home to over 1 500 firms.
The 22@Barcelona plan sought to preserve the mixed used character of the area by including provision for housing and social amenities, affordable housing, health facilities, leisure and sports amenities and international schools.
Source: adapted from (OECD, 2013[10]).
Urban regeneration and smart city initiatives share the aim of seeking to address urban problems. As such, the synergy between the two is becoming increasingly important in cities throughout OECD countries. Korea has been at the forefront of smart cities (OECD, 2018[2]) and Busan is one the leading proponents. The city has been explicit in wanting to use ICT more effectively in urban regeneration which makes its alliance with Barcelona and particularly 22@ an important step forward. By initiating a process of international peer learning, the two cities will be able to capitalise on collaboration not only to positively influence urban regeneration decisions and outcomes but to also position themselves more strongly within a competitive global smart market.
Regenerating Busan’s port promotes economic development
Urban regeneration in port cities is an ongoing process as ports re-organise, expand or contract and adapt logistics to the changing global market. Technological changes in shipping and cargo handling facilities triggered the transformation of ports in the mid-1960s and ports moved away from the city core. This can release land in core areas to create economic opportunity. As one of the most competitive ports in the global maritime economy, Busan is retaining its competitive advantage through a rationalisation of its sites and logistics. The North Port Redevelopment Project aims to establish Busan and its ports as a global shipping gateway to the Eurasian continent. The West Busan Development Project is one of the most important large-scale urban development projects in the city. The western area currently lags behind the development of eastern Busan. The Port Authority and BMG have developed a long-term plan for the area which will not only strengthen the port but also create a new economic hub within the city. The project is developing at a rapid pace as four projects have already been completed:
Two initial phases of the Myungji International New City Project
Phase 1-1 of the International Industrial Logistics City Project
Jangnim Port Landmark Project
Busan Museum of Modern Art (Busan Metropolitan Government, 2017[11]).
Feasibility studies have been developed for a number of other key sites and are promoted by Invest Busan (Busan Metropolitan Government, 2017[11]). Potential investors can access studies for the Busan World Expo 2030, Busan Global Tech Biz Centre, the Advanced Shoe Industry Convergence Hub Centre and the Western Busan Urban Regeneration Project. A number of other studies are under development, including the Gimhae New Airport, the Shinpyeong and Jangnim innovative industrial complexes and the Sasang Smart City (Busan Metropolitan Government, 2017[11]).
The approach taken in Busan mirrors that in other OECD countries. In Hamburg, the redevelopment of the port and its surrounding area sought to retain Hamburg’s competitive position as a maritime economy whilst contributing to the sustainable urban development of the city. In planning HafenCity, Hamburg drew lessons from earlier approaches to waterfront development around the world concentrated on high value-added investments and economic development outcomes. Through HafenCity, Hamburg prioritised citizen engagement and planned the site to be an extension of the city centre. In doing so, job creation, affordable housing, green space and social infrastructure were planned from the outset. Like Hamburg, Busan effectively capitalises on its role as a leading port city to establish partner relationships with port cities. Following Hamburg’s “collaborating to compete” approach, Busan has taken care to ensure that its approach to regenerating the waterfront and port lands provide jobs, investment and housing as well as building on its experience in culture-led regeneration and creative city policies. There will be an ongoing need to engage and inform citizens as the projects develop. Local residents often feel alienated from projects of scale, fear gentrification and have concerns about accessing new jobs. BMG will need to be mindful of stakeholder engagement (discussed in Chapter 3) and ensure that skills, employment, housing and social policies and strategies align with the ambitions for the Western Port Area.
HafenCity offers interesting lessons for Busan and other cities embarking upon large-scale, long-term urban regeneration projects. First, it is a positive example of inclusive growth through affordable housing, skills and youth employment. Second, its governance structure and delivery mechanisms demonstrate effective and collaborative public and private leadership throughout the city. Third, the area is now an integral part of the economic and social fabric of the city as jobs are created and new communities are built.
Box 2.6. Fostering liveability through urban regeneration: Hafen City, Hamburg
In Hamburg, Germany, HafenCity is developing a reputation for being an ideal place to live and work through a large number of urban renewal projects in residential and business/industrial areas. With the development process of HafenCity, a 1.5km2 harbour and industrial site is effectively expanding the city centre by 40%. The urban development principles of HafenCity master plan sought to add intensity, quality and liveability to the site’s public spaces, with up to 7 000 homes and 45 000 jobs representing about 4% of the city’s labour force.
The city created the HafenCity Hamburg GmbH development agency to act as landowner, developer and promotor for the site and the City of Hamburg’s Ministry of Urban Development assumed responsibility for development plans and building permissions and co-financing major infrastructure investments. The approach set out to share risk across institutions and with the private sector and led to ongoing investment activity by all partners.
Public investment has yielded a 1:4 ratio of private sector investment and helped position HafenCity as one of the largest regeneration projects in Europe. In addition to the longer-term goal of providing 45 000 jobs, a university campus, concert hall, green spaces and affordable housing are ensuring that the area meets its objective to be an integrated part of the city.
Source: (City of Hamburg, 2015[23]), Hamburg 2030: focus topics for urban development; HafenCity Hamburg, www.hafencity.com/en/overview/hafencity-hamburg-state-of-development.html (accessed 4 September 2018).
Urban regeneration drives job creation in Busan
Job creation is central to urban regeneration in Busan. As a shrinking city, Busan is facing population loss and out-migration of its young people. As the manufacturing base of the city has declined, new sources of jobs have emerged in port and industrial logistics, tourism and convention, and the film-making sectors (OECD, 2014[28]). To support this economic transition, BMG has highlighted a number of strategic projects that will align urban development and local job creation. Critical projects include: developing a hub port for northeast Asia, redeveloping the North Port, constructing a Cinema Town, building the East Busan tourist and convention cluster, establishing Busan Citizens’ Park, expanding metropolitan transportation networks across the south-eastern region and moving Gimhae International Airport to Gadeok Island (Busan Metropolitan Government, 2017[11]).
Sustained efforts by BMG to regenerate strategic sites in the city have resulted in a range of new and relocated jobs. The Busan Innovative City Plan has led to technology jobs being created in three innovation districts, public sector jobs have been retained in the city as maritime and fisheries agencies relocated to the Dongsam district, and the creative industries sector was strengthened by the relocation of three film-related agencies to the Centum district (OECD, 2014[28]).
City governments have a key role to play in ensuring that the local workforce can access new employment opportunities and is equipped to participate in the changing economy. Busan is experiencing significant outmigration of young people at a time when the knowledge economy is growing. To retain its population and ensure that urban regeneration contributes to creating high value-added jobs, BMG could develop explicit employment and skills strategies for each of the strategic regeneration sites, as was the case for Airport City in Manchester. Such an approach enables a better use of resources and helps build stronger links with employers and investors. The OECD Local Job Creation Review of Korea (OECD, 2014[28]) recommended a number of measures to raise the quality of local jobs, improve skills utilisation and support integrated local development that are relevant to Busan. Such measures include:
Supporting technology transfer through investment and innovation partnerships
Providing technical assistance to improve working conditions and work organisation
Promoting training for managers and workers and encouraging employers to invest in workplace skills and learning
Changing incentive structures for local employment agencies to concentrate on the quality, not quantity of job-matches
Embedding skills policies into economic development policies.
Box 2.7. Tools to raise the quality of local jobs and improve skills utilisation in Korea
To improve the quality and skills for the local job market in Korea, the OECD made the following recommendations:
Guidance, facilitation and training
Support technology transfer: facilitating investment in new technology by employers, setting up partnerships for the sharing of innovation and new technologies.
Provide technical assistance to improve working conditions and work organisation: this may mean the re-professionalisation of front-line positions in some sectors and a reduction in dependence on temporary staff, while in others it may mean better problem solving in the workplace. Providing staff with enough time to pass on skills and learning is also important.
Encourage participation in training for both managers and workers: better trained managers are likely to create more productive working environments for their staff. At the same time, companies need to be encouraged to make training and other skills development opportunities available to their employees.
Influencing broader public policies
Remove local disincentives to a focus on quality in the public sector: this may include changing incentive structures for local employment agencies so that they concentrate on the quality and not just the quantity of job-matches.
Ensure that skills policies are embedded in economic development policies: local partnerships are needed between business and policy makers in the sphere of economic development, education and employment, in order to ensure that skills policies are understood in the context of broader economic development.
Source: (OECD, 2014[28]), Local Job Creation in Korea
Busan builds capacity for urban regeneration through partnerships
Urban regeneration is a collaborative process which includes multiple actors and stakeholders. In Korea, as in many OECD countries, successful urban regeneration is no longer a top-down exercise of state intervention. It is a partnership between tiers of government and broader coalitions from civil society and the private sector. In most cities, collaboration is the interaction between a diverse set of institutions and actors. Cities that have successfully mainstreamed collaboration find that “collaboration begets collaboration” and the system for urban regeneration is better tuned to respond to the challenges of inclusive growth (OECD, 2015[22]).
Busan has a strong record of accomplishing partnerships through collaboration with national government on strategically important sites and through the Urban Regeneration New Deal with state actors such as the Port Authority and the Korean Housing and Urban Guarantee Corporation, with the private sector and in recent years with civil society. OECD (OECD, 2018[2]) highlighted the capacity of MOLIT’s enabling framework to support urban regeneration. The Urban Regeneration Assistance Organisations (URAO) receive funding from MOLIT to develop evidence-based policy and regulations, evaluations, project management, guidelines, consulting and training. URAOs also fund local Urban Regeneration Support Centres (URSC) whose role is to support local governments (OECD, 2018[2]).
Cities need multi-stakeholder systems to prepare and market their local economy globally (OECD, 2015[22]). BMG, Invest Busan and other public agencies collaborate to develop and promote the city, as well as dedicated business-facing organisations which also promote the city. Busan seeks to bring a significant number of sites to market and attract skilled workers and investment. For this, the experience of Amsterdam may be particularly relevant. In 2010, the Amsterdam Economic Board (AEB) was created to provide strategic advice and solutions for economic development to the metropolitan area. The Board aimed to align policy interventions with strategic investment decisions. Collaboration with In Amsterdam and other public and private sector partners has helped shape a resilient investment climate, boosted trade and supported the integration of highly skilled migrants. Busan’s economic leadership may need to establish a strategic platform from which it can continue to promote and develop the city.
Another approach which could offer insights for Busan is the new institutions and collaborative formats which are emerging in some cities triggered by long-term government funding envelopes. In 2014, the Glasgow and Clyde Valley city-region was awarded GBP 1.3 billion as part of the national programme of City Deals in the United Kingdom. The 20-year funding programme will support regeneration, infrastructure and job creation. The City Deal involves eight local authorities. In the absence of a metropolitan government in the region, the local authorities created two new bodies to co-ordinate the Deal: the Glasgow and Clyde Valley Economic Leadership Board and the Commission on Urban Economic Growth. The Deal created an imperative to collaborate if the region is to meet its ambitions to develop a highly skilled, inclusive and entrepreneurial workforce. BMG could review the eco-system in which the 2015 Urban Regeneration Strategy exists to assess whether all pillars of the strategy can be operationalised through existing structures and identify where the system could be strengthened or changed. The Glasgow City Deal aligns regeneration, infrastructure and human capital to help shape an inclusive economy in the city. The 20-year central government funding package adds long-term certainty into the development process.
Busan has benefitted from strong local leadership that has shaped the approach to regeneration in the city and led the shift from development-led interventions to people-centred initiatives. This approach is now embedded into national frameworks and creating opportunities to build new coalitions in cities to drive projects forward. The national government also recognised the important role that local communities have to play in urban regeneration. The Urban Regeneration New Deal requires projects to build capacity in local communities and engage stakeholders and beneficiaries in determining outcomes. This approach can help create a platform for civic leadership which focuses on the needs of a place as a result of loyalty and civic identity (OECD, 2012[29]). Evolving civic leadership has played a critical role in the Gamcheon Culture Village and the Sanbokdoro Renaissance Project. In each case, these new local leaders engage local government and build consensus amongst stakeholders (see Chapter 3).
Operationalising land-use planning and urban regeneration
Density, zoning and floor area ratios promoting inclusive growth
In OECD countries, a range of development management measures are used to control, regulate or encourage development in land-use planning. Research suggests that:
In all OECD countries, a range of policy instruments are applied to control, regulate and or stimulate desired development outcomes. Development management instruments affect the decisions of actors in the development process, and the overall emergent dynamics of the land and property markets by shaping the timing (i.e. when), the location (i.e. where) and the nature and extent (i.e. how much) of physical development. Development management instruments are also applied at the urban, city or metropolitan scale to: (i) manage growth (e.g. sprawl control), (ii) protect the public health and safety by preventing and mitigating negative externalities, (iii) capture the value accruing from public sector investments, and (iv) raise revenues in the development process for continuous investment in infrastructure (Silva and Acheampong, 2015[6]).
In Korea, land-use planning determines zoning and, as discussed in the previous chapter, urban regeneration plans are designed to align with land-use regulations and master plans. In its mapping of planning and zoning across a range of countries, the World Bank (2018[30]) highlights different approaches adopted by countries. For example, in the United States, zoning is a local issue, whereas in France it is a national competence. In addition, zoning policies take a number of forms which often operate in parallel. The World Bank (2018[30]) and Silva and Acheampong (2015[6]) define these as:
Up-zoning – increases density in previously low-density zones
Mixed-use zoning – permits residential, commercial, civic and light industrial uses within an area to increase density and compact urban development
Minimum density zoning – encourages higher density development in urban areas
Inclusionary zoning – predominantly used in the United States as a means of using the planning system to create affordable housing and foster social inclusion.
The Urban Regeneration New Deal enables density to be increased on single unit or low-density sites which are part of the programme. Floor area ratio (FAR) mechanisms are applied to set standards for building mass and incentivise densification. Shenvi and Slangen (2018[31]) argue that FARs have been instrumental in the creation of high-density, mixed-use neighbourhoods that are serviced by public transit when used to support planning and regeneration. In the case of the New Deal, FAR mechanisms contribute to improving the urban environment and creating economic opportunity. In Korea, FAR mechanisms are applied to regenerate distressed urban areas, increase density and support local economic development. The Urban Regeneration New Deal is a five-year programme which implies that to realise optimal outcomes and to accelerate investment and opportunity a more flexible approach to zoning could be beneficial.
Table 2.3. City centre floor area ratio values in different cities
Source: (Shenvi A and Slangen R, 2018[31]), “Enabling Smart Urban Redevelopment in India through Floor Area Ratio Incentives”.
The provision of affordable housing is critical to urban regeneration in Korea and lessons could be drawn from the approach in New York. The city government has the administrative capacity to change zoning and create instruments that promote growth and development whilst addressing issues of inclusion and accessibility. The New York approach avoids a “one size fits all” and offers flexibility to developers and public authorities.
Box 2.8. Inclusionary housing in New York
In New York, floor area ratio incentives have long been used in land-use planning and urban regeneration to encourage development and offset public infrastructure costs (Shenvi A and Slangen R, 2018[31]). In 1987, New York City introduced its first Inclusionary Housing Programme aimed at promoting economic diversity in the highest-density districts and in those planned for significant residential growth. The programme focused on Manhattan and allowed floor area ratios (FARs) to be increased on eligible sites to build affordable housing. By 2017, 4 000 units of permanently affordable housing had been built in Manhattan.
In 2005, the city created the Inclusionary Housing Designated Areas Programme targeting medium to high-density districts in Bronx, Brooklyn, Manhattan and Queens. The programme allows FARs to be increased by as much as 33% on the condition that 30% of the building’s floor area is provided for affordable housing. Affordable housing created through the 2005 programme must remain affordable in perpetuity for households at or below 80 percent of area median income. By 2017, the Inclusionary Housing Designated Areas programme had resulted in 7 000 units of permanently affordable housing across the four districts.
In 2016, the city created a Mandatory Inclusionary Housing (MIH) Programme in designated areas. The programme offers a flexible menu of options that can include set aside affordable housing or the possibility to pay a fee in lieu of providing affordable units. These funds are reserved for affordable housing purposes within the Community District where the development is located.
Source: (New York City, 2018[33]), https://www1.nyc.gov/site/planning/zoning/glossary.page (accessed 25 August 2018).
Urban regeneration in Korea requires development management instruments and incentives
Development management instruments are applied in OECD countries through wide-ranging regulatory instruments, incentive-based instruments, and fiscal instruments in the form of exactions, taxes and fees (Table 2.4) (Silva and Acheampong, 2015[6]). Countries tend to use a mix of instruments and incentives to support land-use planning and urban regeneration. In countries such as Korea (Silva and Acheampong, 2015[6]), which generate higher levels of public revenue from property taxes, large urban regeneration sites are strategically important. Larger sites within Busan, such as the Western Port Area, can benefit from a judicious mix of tools to support the strategies and master plans and to ensure that loans and polices can be implemented. Development instruments enable the public sector to intervene in land markets and to work in partnership with the private sector.
Table 2.4. Development management instruments applied in OECD countries
Source: (Silva and Acheampong, 2015[6]), Developing an Inventory and Typology of Land-Use Planning Systems and Policy Instruments in OECD Countries.
Most urban regeneration activities offer a mix of purely public goods, and purely private goods, where there are opportunities for sound public and private investment, but where there are also significant “investment gaps” which can only be plugged by collaborative financing techniques. There are public interests in seeing that finance flows, but there are private interests in the form of likely profits resulting from success. However, there are also risks and costs in terms of private finance that mean the activities are unlikely to be wholly commercially viable. Across the OECD, multiple actors and stakeholders finance urban regeneration including International Financial Institutions; national, regional and local governments; foundations/NGOs and the private sector (developers and investors). The complexity of urban regeneration means that projects often rely on complex funding streams throughout the lifecycle of the development. Whilst the approach is necessary, external shocks such as the financial crisis can affect outcomes (OECD, 2013[10]). In Busan, public private partnerships are highly effective in supporting projects of varying scale, as demonstrated by the waterfront development, hillside projects and railway station development. However, regional and metropolitan regeneration plans are not underpinned by investment strategies which may weaken outcomes.
OECD noted that whilst the Urban Regeneration New Deal represents significant investment by the public sector which is attracting private sector investment and helping shape new local economies, funding is limited to a five-year time frame. OECD (2018[2]) suggested that institutional and commercial investment may be needed in the longer term to sustain positive outcomes from New Deal projects. In cities such as Busan this will require locally focused financial instruments and asset appraisal. One such approach used widely in the United States which could be used in Busan is Tax Increment Finance (Box 2.9).
Box 2.9. Tax increment financing (TIF) in the United States
Tax increment financing (TIF) emerged in the 1950s as a measure to fund inner-city regeneration schemes and support federal housing programmes. The 1949 US Housing Act had established a federal funding programme for urban regeneration but stipulated the need for match funding. In 1951, California enacted legislation so that TIF could be used as a local financing tool to match the federal funds. The main premise of TIF is that local governments can borrow against the future tax income that accrues from completed developments. The use of TIF grew rapidly in the 1970s and 1980s as the focus of urban renewal expanded into a revitalisation tool to improve the built environment, tackle social exclusion and promote local growth in distressed urban areas.
TIF has continued to evolve as a tool for urban revitalisation and economic development. It is authorised as a financing mechanism in 49 states (the exception is Arizona). Whilst TIF schemes are context specific, designation is dependent on two criteria: blight conditions and meeting the “but for” test that redevelopment would not occur without TIF. An initial study is required that demonstrates the existence of blight, shows how the “but for” condition is met, and designates the TIF area boundary.
Source: (Monk S,Whitehead C, International review of land supply and planning systems (Monk S,Whitehead C, 2013[13])
Revamping urban regeneration strategies in Busan
Urban regeneration is a strategic priority for national government and Busan Metropolitan Government. Over the last decade, BMG has created a robust eco-system to support and deliver urban regeneration which has been reinforced through important legislative changes such as the 2013 Special Act and the 2017 New Deal for Urban Regeneration. However, Busan needs to address a number of policy challenges to maximise the investment opportunities that lie ahead, to realise inclusive growth in the city, to retain and grow its young population and to ensure balanced growth across metropolitan areas. Some are within the authority of BMG and others require national government to recalibrate its authority and legislative frameworks.
Address complexity and duplication at national and subnational levels.
Chapter 1 drew attention to the complex and cumbersome legislative and policy context within which urban regeneration exists. This complex approach can lead to inefficiencies and may require further reforms, for example, whilst the Special Act on the Promotion of and Support for Urban Regeneration allows local governments the flexibility to create tax incentives for urban regeneration, tax legislation has yet to be amended to make this possible (Lee, J. and Nam, 2016[5]). This scenario is not unique to Korea. An effective approach that has emerged in the United Kingdom is to see urban regeneration as part of a low-growth discourse which ensures that all relevant policy interventions and expenditures at local, national and supranational levels are clearly mapped, and the interlinkages and duplications easily identified.
Ensure co-ordination in the planning system to avoid inefficiencies
Land-use planning and urban regeneration are delivered through parallel and interdependent plan-led systems which can lead to overlap and administrative inefficiencies. For example, the Urban Master Plan and the Urban Regeneration Strategic Plan analyse socio-economic development, environmental protection and land-use suitability in a given region which can lead to a duplication of efforts and resources. Furthermore, there is a lack of distinction between the Urban Regeneration Strategic Plan and Urban Areas and Residential Environment Improvement Plan. Although the former has broader planning scope, both plans concern old town revitalisation redevelopment projects (KRHIS, 2015[7]) which can create confusion and duplication.
In addition, the committee oversight for plans and decision making can also present challenges. Resourcing the committees with appropriate experts can prove challenging and certain projects require approval from both the Urban Planning Committee and the Special Committee for Urban Regeneration indicating that the system could become more efficient and effective if joint meetings or mergers were allowed (KRHIS, 2015[7]). In Austria, land-use planning benefits from a dedicated body which includes all tiers of government to co-ordinate spatial planning. Such a body in Korea could integrate land-use and urban regeneration systems with the aim reducing inefficiencies and creating a more holistic approach.
Box 2.10. Austrian Conference on Spatial Planning
The Austrian Conference on Spatial Planning (ÖROK, Österreichische Raumordungskonferenz) co-ordinates spatial planning policies between the three levels of government in Austria (the national level, the state level and the municipal level). It is chaired by the Federal Chancellor and its members include all federal ministers, the heads of all federated states and representatives of associations of local governments. Business and labour organisations are represented on the body as consulting members.
The ÖROK prepares the ten-year Austrian Spatial Development Concept and provides a vision and guidelines for spatial development that is shared by all levels of government. The ÖROK has developed an online tool that provides a mapping function of a variety of important indicators at the municipal and regional levels and releases a report on the state of spatial development every three years.
Source: (OECD, 2017[9]), Land-Use Planning Systems in the OECD.
Lessons from across OECD countries suggest that continued efforts would be needed to ensure that neighbourhood projects are resilient and achieve viable long-term outcomes and that larger scale strategic sites are shielded from external economic shocks. In Busan, strategic planning will need ongoing attention and reappraisal to ensure that the 2015 Strategy and current master plans guide development, including urban regeneration at the centre and growth management on the periphery of the functional region.
Evaluate systematically the outcomes and impact of regeneration projects
Benchmarking and evaluating outcomes and impact from urban regeneration investments and programmes has long been considered problematic (Ploegmakers and Beckers, 2014[32]), (Tyler P et al, 2010[33]). Urban regeneration tackles multiple problems: the built environment, transport, housing, culture, social inclusion, job creation etc. Defining appropriate indicators to be used by localities, regions, and national governments to measure the progress and impact of urban regeneration must therefore be developed with the input of a large number of public, private and civil society actors. Understanding what works in urban regeneration demands quantitative and qualitative analysis. In 2013, the United Kingdom introduced the “What Works Centre for Local Growth” as an innovative way to align policy makers, academia and experts to address policy challenges through evidence-based analysis. The initiative is run by the London School for Economics, the Centre for Cities and Arup, and funded by a number of national government ministries (What Works Centre for Local Economic Growth, 2018[34]). The Centre has changed the way that local areas and national policy makers approach evaluation and draw on best practice, and the approach could enable Korea to more effectively measure the impact of urban regeneration and New Deal projects.
Ensure investments are available for urban regeneration projects
It is widely accepted that a strategic plan or document should guide development and investment, including urban regeneration at the centre and growth management on the periphery of the functional region. Competitive positioning in a new global economic geography shapes strategic priorities particularly as regards major infrastructure investments and locations for new concentrations of business activities. It also highlights the importance of the cultural assets of a place to attract the skilled workers of the new knowledge industries and tourists. The Busan Regeneration Strategy 2015 and the Regional Strategy articulate the vison for the future and the interventions that BMG will support to regenerate the city. However, the strategies are not supported by explicit investment and funding strategies which is likely to limit progress. Cities are increasingly preparing dedicated investment strategies (OECD, 2013[10]) to support regeneration and economic development plans. These are becoming critical tools that help the public sector implement its plan and help to build confidence in the private sector. In Belfast, Northern Ireland, the City Council has adopted a Regeneration and Investment Strategy for Belfast City Centre, which “sets out a road map of policies to guide city centre decision-making and projects that translate the policies into action. Extensive meetings and consultations with city stakeholders have contributed to the strategy, including the Future City Conference in June 2014 and months of meetings and conversations with all sectors which tested many of the policies, projects and approaches” (Belfast City Council, 2015[35]).
Use urban regeneration as a catalyst for job creation
Busan is facing many of the same challenges as other cities throughout the OECD in terms of job retention and job growth. As a city with an increasingly ageing population and young people gravitating toward Seoul, regeneration initiatives will need to be supported by explicit employment and skills strategies. In Busan, this will require specific strategies which set measurable targets. In Manchester, urban regeneration is explicitly linked to job creation and skills development and the creation of a City Apprenticeship and Skills Hub will increase the number of apprenticeships for 16-24 year olds by 10% (OECD, 2015[22]). The city purses a holistic approach which connects across all policy areas and strategies. Similar approaches exist in Hamburg and Lyon.
Japan is seeking to address many of the same issues of demographic change though a comprehensive five-year strategy which tackles employment, birth rates, migration and urban development. “Employment Creation Projects for Regional Vitalisation” focus on local employment and skills development to boost productivity and strengthen economic infrastructure, creating quality jobs and subsidies and tax incentives (Government of Japan, 2017[36]). This integrated approach could provide lessons for Busan as a means to retain young people and create local employment opportunities. Urban regeneration has the potential to become a greater catalyst for job creation in Busan and throughout Korea but only if explicit measures are taken to align policies and interventions across government departments and between levels of government.
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Note
← 1. Urban Commons are spaces that are collectively owned or shared between or by communities.