In Seoul, “cool” areas are described as “hot.” 

The process of change follows a well-known script: low rents in older areas attract young entrepreneurs who open cafes and bars. Soon the media begins to report on the area and the number of visitors increases. Rumors spread about the area becoming hot. Landlords soon catch wind of the change and raise rents, forcing a few older businesses out. As the number of visitors continues to increase, older businesses leave and more cafes and bars move in. As the heat builds, residential properties are converted to commercial use; the first cafes and bars begin to close as rents continue to rise. As commercialization grinds along, long-term residents leave and big-name chains move in.

The first areas to go through this process were Daehangno and Hongdae in the late 1990s. Samcheong-dong and parts of Itaewon followed in the 2000s. In the 2010s, the Hongdae heat spread to Sangsu-dong, Samcheong-dong heat to Bukchon and Seochon, and Itaewon heat to Gyeongnidan-gil. The latest hot areas can see the future in their overheated neighbors dominated by chains and the corporate interests behind them.

Older commercial areas, such as Myeong-dong and Insa-dong, follow a different cycle because they were not residential. In these areas, the type of commercial activity changes. Insa-dong, for example, used to have galleries and antique shops on the main street and small bars and tea houses on the back streets. As tourism increased beginning in the 2000s, shops catering to tourists and big-name chains moved in, causing many to lament the loss of “culture” in the area.

As in other large cities, the driving mechanism of change is profit motive. People want to make a profit off the real estate that they own or the business they run. Greater demand not only means greater profits, but also an increase in the number of shops offering what sells, which partly explains the lack of diversity in new businesses.

Heat in a neighborhood, then, is something that benefits business and real estate owners because it increases profits. In this context, lamenting neighborhood change is a veiled critique of business and real estate owners who initiate change to increase their profit out of greed.

A weak retirement system and a high rate of self-employment, however, creates a structural need for greed. Many owners feel the pressure to save for retirement or to use real estate for retirement income.

The same type of structural greed fed the redevelopment boom in the 2000s that turned many old neighborhoods into apartment complexes. A weak real estate market in the 2010s made redevelopment less profitable, forcing many areas to cancel redevelopment plans.

Koreans understand this type of structural greed well, which helps explain why the opposition to commercialization and redevelopment has been weak. Historic preservation movements in Bukchon and Seochon, for example, were initiated by city officials rather than concerned citizens.

Cooling hot areas is difficult without addressing the structural greed that feeds the heat. Creating a more stable social system that reduces the need to accumulate capital is the most effective way to deal with the issue, but that is a national issue that defies an easy solution.

Applying restrictions of commercialization is the easiest way, but structural greed ensures a backlash that politicians are eager to take advantage of to get votes. Business and real estate owners in Bukchon and Seochon, for example, want the city to weaken restrictions on commercialization even as visitors to the areas lament recent changes.

The lack of diversity ― cafe after cafe ― is important here. Instead of focusing on limiting commercialization, the city should shift the focus to the type of commercialization. In recent years, “mixed-use” has become popular in city planning circles in the West as a way to revive older areas. Much of Manhattan, for example, is already mixed use, which combined with density, gives the area an energetic vibe that no other American city can match.

Mixed-use already dominates cities in Korea and Japan where neighborhood shops have traditionally been an important part of life. Businesses and residents develop a code of conduct that allows them to cohabitate in a densely populated space.

The key, then, is to encourage diversity in the type of commerce that takes place in the neighborhood. One way to encourage diversity is through subsidized “retail incubators” that help less profitable business get a start or maintain their existence. Another way is a quota system that limits, for example, the number of cafes, in a given area. The quota could be adjusted to encourage different areas to develop a unique character.

By Robert J. Fouser

Robert J. Fouser, a former associate professor of Korean language education at Seoul National University, writes on Korea from Ann Arbor, Michigan. ― Ed.