Pyongyang’s donju (wealthy entrepreneurial class) are scrambling to make investments into a project to build 10,000 new homes in the city’s Hwasong area following North Korean leader Kim Jong Un’s attendance at its groundbreaking. Donju are keen to aggressively invest in the project given the geographic advantages of Hwasong compared to Songsin and Songhwa areas, the sites of previous housing projects.
A source in Pyongyang told Daily NK on Thursday that donju believe the future is bright for the Hwasong apartments. According to them, the homes will be more expensive since the district is better located than Songsin and Songhwa. Many donju are accordingly looking to invest in the project, possibly even with money from donju in major provincial cities.
Kim commenced the groundbreaking ceremony for the Hwasong apartment project on Feb. 12. He said that within the next three years, grand streets lined by homes for countless families, public buildings, and service facilities would criss-cross Hwasong, noting the area’s proximity to Kumsusan Palace of the Sun and September 9 Street. This would give rise to a new administrative district, he added.
While Kim highlighted Hwasong’s political significance by stressing its location near Kumsusan Palace of the Sun, where Kim Il Sung and Kim Jong Il are entombed, donju are reportedly appraising the investment value of the project based on the district’s accessibility from central Pyongyang and its favorable business conditions.
In fact, Hwasong — to be carved out of Taesong District in Pyongyang’s northeast — boasts excellent accessibility to Chung District, considered prime real estate even among downtown districts, especially compared to Songsin and Songhwa in Sadong District in the southeast of the city.
Moreover, Hwasong is relatively close to Kalli Station, with rail links across the country, and it is a good base for going to Pyongsong, South Pyongan Province, the location of North Korea’s biggest wholesale market. Accordingly, it is considered a good place for doing business.
The source said most Pyongyang residents – apart from cadres who can generally survive on their state rations and salaries – get by on so-called “Aug. 3 work” (engaging in unofficial business or other economic activities on conditions that you do not show up at your official work and pay a monthly fee) or commercial activities on the part of wives, much as people elsewhere in North Korea do. In the country, house prices rise according to how close markets are, or how close the parking lots for private buses to markets are.
The source pointed out that having the apartments overlook Kumsusan Palace of the Sun does not add much to its value for business people. In fact, donju looking to invest in new homes first look at whether they are good places for their commercial activities. And in this regard, Hwasong’s proximity to Pyongsong is its greatest strength.
Donju also believe there will be no hiccups during construction of the apartments since the North Korean leader himself attended the groundbreaking. They are sure it is a winning investment as there is no way it can be suspended or changed during construction.
The source said many donju are investing their own capital, while those without their own money are investing money borrowed from donju in major provincial cities at high interest. He said donju in major regional cities readily accept lending requests since they believe Kim has essentially guaranteed the money, and they do not know when smuggling opportunities will return with the border closed.
Though donju regard the Hwasong construction project as a real estate investment opportunity, ordinary people reportedly share a deep sense of dejection, worried that they will be mobilized for construction work and compelled to pay “non-tax burdens.”
The source said people are shuddering at the thought that they will be pestered by requests from the state for money and labor in the name of “support.” People are complaining that, given they have not been able to immediately move into homes in Songsin or Songhwa, they do not know why they have to continue to sacrifice their own labor and funds.
The source said that even people living outside of Pyongyang dislike the project. They believe that because everyone was mobilized to build the homes in Songsin and Songhwa – and because the Hwasong homes should be nicer given the site’s location near Kumsusan Palace of the Sun – the economic burden they must shoulder for the new project will be that much greater.
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