According to the prediction of the National Statistics Office (2016), the population of Korea will decrease rapidly from a peak of 52,960,000 in 2031, and according to the U.N. Future Report (2009) published by the U.N. Future Forum, Korea is expected to have only a male population of only 20 thousand and female population of 30 thousand in 2305.

 Not only the size of population but also the structure of population is dramatically changing. The working age population, which is the basis of tax revenue, has been decreasing since 2017, but the aging population, which is a major factor of tax expenditures, is rapidly increasing. The high ratio of supporting the elderly exacerbates the tax burden of citizens and worsens the financial integrity of local governments. The worsening of local governments’ finances causes shrinking and paralysis of public services, which brings about an outflow of working age population functioning as a mechanism that accelerates the extinction of local communities. The case of Yubari, Hokkaido, Japan, which went into bankruptcy 10 years ago due to the aggravation of financial conditions and decrease in population, directly shows the vicious circle of the decline phase of city “decrease in population → aggravation of financial conditions → paralysis of public services.” The financial aggravation of local governments brings about the paralysis of public services, so the number of schools decreased from 17 to 3, leaving only an elementary, a middle and a high school. The municipal hospital was reduced to a municipal
clinic, and such departments as surgery, ophthalmology, gastrointestinal internal medicine and otolaryngology were removed, leaving only 5 doctors and 19 beds from 200. There is increasing necessity of public private partnership that can maximize uses the planning ability, capital strength and operation ability of private entities as an alternative of local governments’ financial aggravation and shrinking of public services. Public private partnership urban restoration (PPP Type urban restoration) does not transfer ownership of common property unlike privatization, but transfers the right of using it to a private entity for a certain period of time.