Minister of Land Says "Abolition of Regional Housing Cooperatives Under Review" [Real Estate AtoZ]

[2025 National Audit]
National Assembly Land, Infrastructure and Transport Committee Audit on October 13

The government is reportedly considering eliminating the regional housing cooperative (jihuteak) business model. A recent nationwide inspection of jihuteak project sites revealed a range of issues.

On October 13, during the National Assembly's Land, Infrastructure and Transport Committee audit, Minister of Land, Infrastructure and Transport Kim Yoonduk responded to a question from Assemblyman Lee Geontae of the Democratic Party of Korea regarding jihuteak, stating, "The principle at the Ministry of Land, Infrastructure and Transport is that we must seriously consider abolishing it altogether."

Kim Yoonduk, Minister of Land, Infrastructure and Transport, is reporting on the agency at the National Assembly's Land, Infrastructure and Transport Committee's audit of the Ministry of Land, Infrastructure and Transport and others on the 13th in Yeouido, Seoul. Photo by Yonhap News

Previously, a joint inspection conducted by the Ministry of Land, Infrastructure and Transport, the Fair Trade Commission, the Anti-Corruption and Civil Rights Commission, Korea Real Estate Board, Korea Housing & Urban Guarantee Corporation, and local governments found issues at 4 out of 8 sites inspected, including excessive construction cost increase demands by contractors and unfair contracts. Assemblyman Lee reported that, among 445 cooperatives inspected by local governments, 716 violations of laws and regulations were detected at 287 sites.

During the audit, Seohui Construction, a company heavily involved in jihuteak projects, came under scrutiny. According to Assemblyman Bok Giwang's office from the Democratic Party of Korea, Seohui Construction is responsible for construction at 16 out of 167 jihuteak sites nationwide. Of these, 18 administrative violations were found at 10 sites. Cases of demands for increased construction costs were identified at sites in Daegu, Gyeonggi Province, and North Jeolla Province.

Other violations found at the remaining sites included insufficient information disclosure, failure to prepare performance reports, violations of recruitment advertising regulations, and breaches in fund management. Lee Bonggwan, chairman of Seohui Construction, was summoned as a witness for the audit but did not attend due to health reasons.