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Concepts and Applications of the Construction Cost of Public Facilities

Jayun HeoㆍSangil KimㆍJinha KimㆍJuil LeeㆍDarae Jung

In 2021, a donation for ‘construction cost of public facilities, etc.’ was legislated in the ‘National Land Planning and Utilization Act’, which had been the basis of ‘Public Contribution’ operated by the pre-negotiation system in Seoul, Korea. Public Contribution is determined by prior negotiations between landowners (or developers) and the public. It is limited to large-scale projects and that can change urban planning. However, it is confusing with similar systems for Public Contribution such as Donation and FAR incentives. Therefore, this study compared similar systems with ‘construction cost of public facilities, etc.’ and attempted to present the direction of system operation by identifying the purpose and nature of imposition.


In order to distinguish the construction cost of public facilities, etc. from similar systems and concepts, relevant laws and systems were reviewed from perspectives of calculation standards, use places and justification for imposition to establish the concept and operation direction.


Construction costs for public facilities, etc. are imposed on changes in urban planning, particularly land use and urban planning facilities.

Changes in urban planning could rapidly modify the urban environment by shifting hierarchies of urban central areas and changing characteristics of the region and population. Therefore, construction cost of public facilities, etc. should be used in plans that reduce external effects caused by changes of urban planning, burden the cause of facility construction or use, or lead to investment in development-limited areas.


If construction cost of public facilities, etc. is determined based on land value changes or development profits, the predictability of business feasibility is low. Furthermore, there might be problems in terms of equity because levied costs are different depending on the project type or route of land use changes. Therefore, it is necessary to secure the consistency by setting the increase floor area due to the change of the urban planning as cost calculation criteria. Also, it is reasonable to determine the cost by applying the facility unit or value of increase floor area such as air right according to the purpose of the system.


It is desirable for Seoul Metropolitan Government to use some construction cost of public facilities, etc. in a wide area. This is because the Seoul Metropolitan Government is in charge of affairs such as drafting, making decisions and implementing projects for urban management plans. Furthermore, Seoul is already one daily life zone based on daily moving data and in and out statistics. Considering the ripple effect of the development project, it is desirable to allocate a large portion of the construction cost of public facilities at the Metropolitan government level in terms of production inducement effect, value-added creation and employment inducement.


This system should pay attention to the supply of new public facilities required by future generations’ lifestyle changes beyond the additional infrastructures. When it comes to urban planning, it is necessary consider alternatives to supply in conjunction with the plan change that causes density increase by newly interpreting the scope of infrastructure that is obligated to secure or install during development projects. To make this possible, it is required to identify the scope of public facilities and various demand to make preemptive plans reflecting newly interpreted scope of public facilities and to suggest alternative methods to link with it planning changes that cause an increase in total floor area.


Lastly, for an effective operation of the system, areas for changing urban planning should be explored in advance. It should be preceded to set the direction of development by reviewing areas that need to be changed in urban competitiveness or policy.