The construction industry in South Korea has expressed concerns over the excessive donation requirements imposed by education offices on developers during housing construction projects, highlighting the need for established donation standards. Despite upcoming revisions in November to ease the burden of school land charges, the construction industry states that the practice of requiring excessive donations has not improved. Developers must coordinate with education offices regarding student placements before the project plan approval, effectively making the approval contingent on the education office’s consent.
The Korea Housing Builders Association notes that developers are often forced to negotiate directly with schools on all matters related to accommodating new students, often leading to excessive demands for donations by schools during these negotiations. This includes requests for substantial expansions and additional facilities, which often exceed the statutory amounts set for school land charges.
For example, a housing project in Gyeongbuk with 1,000 homes had a school land charge of approximately 6.3 billion won, but faced a donation agreement of 11.5 billion won before receiving consent from the education office. In Daejeon, a project faced a donation requirement amounting to 45 billion won, over 13 times its statutory charge of 3.3 billion won.
Differences between the estimated school needs by the education office and the actual number of students at the time of occupancy often result in empty classrooms, as seen in the Baeksa District in Icheon, where the actual student numbers fell well short of the initial estimates by the education office.
The association attributes the recurring issues to the lack of criteria for determining an appropriate level of school facility donations. Although the government announced plans in September 2023 to establish such criteria, discussions have yet to begin. The association urges the government to establish these standards quickly, reflecting the intent of the upcoming revisions to ease the school land charge burdens. They advocate for the education office to assess the appropriate scale for expansions at the time of agreement and for cases where donation requirements exceed school land charges, suggesting the use of education office funds to alleviate the developers’ burden. They also emphasize the need for legal grounds for adjusting class numbers to reflect changes in student populations at the time of occupancy.