LH Unable to Conduct Public Housing Site Investigations

Joint Announcement of LH Innovation Plan by Related Ministries
Reduction of About 2,000 Personnel... 20% of Total
Complete Ban on Land Acquisition for Non-Actual Use Purposes
Disadvantages in Promotion for Senior Officials if Not Disposed
Cash Compensation for Employees... Expansion of Employment Restrictions
Organizational Restructuring Plan Excluded, Additional Opinions Being Collected

Minister of Land, Infrastructure and Transport Noh Hyung-wook is holding a joint briefing with related ministries on the Korea Land and Housing Corporation (LH) innovation plan at the Government Seoul Office in Jongno-gu, Seoul, on the 7th. Photo by Kim Hyun-min kimhyun81@

[Asia Economy Reporter Kangwook Cho] The government is reclaiming the public land site location survey tasks of Korea Land and Housing Corporation (LH) to the Ministry of Land, Infrastructure and Transport (MOLIT). Through the reduction and transfer of non-core functions, the workforce of about 2,000 people, accounting for 20% of the total, will also be cut. Land acquisition is prohibited except for actual use purposes, and employees, their spouses, and direct ascendants and descendants are excluded from land compensation.

On the 7th, the government announced these LH innovation measures jointly with the Ministry of Economy and Finance, MOLIT, and other related ministries.

First, the government decided to reclaim the public land site location survey tasks, which caused the recent incident, to MOLIT for direct execution. Along with this, non-core projects performed by LH such as facility performance certification, safety impact assessment, and urban/regional development, free economic zones, and Saetteul Village projects will be transferred to other public institutions or local governments. New overseas investments and district energy projects, excluding inter-government cooperation projects, will be abolished.

The government plans to reduce the workforce by about 2,000 people, which is more than 20% of the current total of 9,643 employees, especially through downsizing and abolishing tasks. The government’s plan is to first reduce about 1,000 employees through functional adjustments in the first phase, then conduct a detailed diagnosis of local organizations and further reduce more than 1,000 employees.

Land purchases by LH executives and employees will also be strictly restricted. Land acquisition is prohibited except for actual residence purposes, and owners of houses or land not for actual demand will be excluded from promotion to senior positions if they do not dispose of such properties. Additionally, during new town and other land development projects, LH employees, their spouses, and direct ascendants and descendants will be excluded from land-for-land swaps, negotiated transfer land, and living measures beneficiaries, and will receive cash compensation instead. The current mandatory asset registration, which applies only to seven executives, will be expanded to all employees, and real estate transaction investigations will be conducted once a year.

Furthermore, the post-retirement employment restriction targets will be expanded from executives (7 people) to grade 2 or higher (529 people), and retired employees will be restricted from entering private contracts with companies they belonged to within five years of retirement. LH employees will be excluded from various review committees such as design competitions and construction bids, and houses owned by employees and their relatives will be excluded from rental housing purchase targets.

However, organizational restructuring plans were not included in this innovation plan. The government intends to promptly prepare restructuring plans after additional opinion gathering such as public hearings.

Minister of MOLIT, Hyungwook Noh, explained, "We reviewed the innovation plan under the principle of transforming LH’s organizational DNA from the current real estate development focus to a specialized residential welfare service institution, while maintaining organizational capabilities to ensure smooth housing supply such as the 2·4 measures."