Kwon Young-se: "48 LH Executives Made Billions in Market Gains from Public Rental to Sale Conversion"

"Public Housing Supplied for Affordable Housing Stability Misused for Speculation by LH Executives"

Kwon Young-se, a member of the People Power Party, questioning at the National Assembly audit. Photo by Yonhap News

[Asia Economy Reporter Kim Heeyoon] Allegations have been raised that 48 employees of Korea Land and Housing Corporation (LH) made hundreds of millions of won in market price gains through public rental apartments with sale conversion options.

According to data received by Rep. Kwon Young-se of the People Power Party from LH on the 9th, as of the end of January, 48 LH employees were confirmed to have signed sale conversion contracts for public rental apartments. It is reported that most of them reside in popular residential areas such as Pangyo and Gwanggyo New Town.

The sale conversion type public rental system allows tenants to purchase the rental apartment they have been living in at a price lower than the general sale price after a fixed period. The 48 LH employees fulfilled the mandatory rental period in public rental apartments and purchased the apartments at prices much lower than the current market price.

In the case of one LH employee, it is claimed by Rep. Kwon’s office that they signed a sale conversion contract for a 101㎡ (about 31 pyeong) unit in Suwon Gwanggyo Village Complex 40 for about 480 million won, which is approximately 600 million won cheaper than the actual transaction price of 1.1 billion won.

Experts expect that there may be more employees who gained market price profits. From 2011 to last year, 279 LH employees signed contracts for public rental housing. Among them, 233 contracts were for public rental housing with a mandatory rental period of 10 years, with the Seoul metropolitan area accounting for 72% (168 cases) of the total. Notably, more than half of these, 93 cases, were concentrated in Suwon Gwanggyo New Town.

Rep. Kwon said, "It is an outrage that public housing supplied for the purpose of stabilizing housing for ordinary citizens has been exploited as a speculative target by LH employees," and added, "The truth must be promptly uncovered through a thorough investigation."