LH's Delayed Structural Reforms, Further Postponed Housing Supply

Housing Supply Secured After 2·4 Measures
Only About 27% of Total Target
4,000 Households in Gwacheon Oppose, Project Fails
Other Areas Also Face Local Government Opposition
Even Confirmed Public Land Projects Stagnate

Minister of Land, Infrastructure and Transport Noh Hyung-wook is bowing his head in apology for the LH speculation scandal during a joint briefing on the "Korea Land and Housing Corporation (LH) Innovation Plan" with related ministries at the Government Seoul Office in Jongno-gu, Seoul on the 7th. Photo by Hyunmin Kim kimhyun81@

[Asia Economy Reporter Kangwook Cho] While the organizational restructuring plan of Korea Land and Housing Corporation (LH) is being delayed, even the government's measures to expand housing supply are faltering. The announcement of new public housing sites for 110,000 households has been postponed, and already confirmed urban public housing sites are being scrapped due to resident opposition, creating cracks in various areas. Considering that the Moon Jae-in administration has less than a year left in office, there are concerns that many supply plans may collapse.

According to the industry on the 7th, the Ministry of Land, Infrastructure and Transport has secured a total housing supply of 229,000 households over four months since the announcement of the February 4th measures. This accounts for about 27% of the total supply target (836,000 households) stated in the February 4th measures.

What is worrisome is that even the relatively confirmed public housing site projects are becoming increasingly uncertain. Due to the aftermath of the LH scandal, the government has postponed the announcement of new housing site candidates in the metropolitan area to the second half of this year. The new housing sites planned for supply in the metropolitan area total 180,000 households, and excluding Gwangmyeong-Siheung (70,000 households), an additional 110,000 households worth of sites need to be supplied.

Moreover, the government’s plan to supply 4,000 households (including rental housing) on the Government Gwacheon Complex site through the August 4th measures last year has recently been canceled due to resident opposition, causing significant repercussions. There is strong opposition from local governments and residents in areas such as Nowon-gu Taereung Golf Course (10,000 households), Seocho-dong Seoul Regional Public Procurement Service site (1,000 households), National Diplomatic Academy idle site (600 households), Mapo-gu Western Driver’s License Test Site (3,500 households), and Sangam DMC unsold site (2,000 households). While the LH organizational restructuring is stalled, the momentum of government real estate policy appears to be lost.

The urban supply plan is also facing challenges. The Urban Public Housing Complex Project, which identifies transit station areas, semi-industrial zones, and low-rise residential areas to supply housing, plans to supply 60,000 households across 46 candidate sites, securing only 30% of the target volume (196,000 households). The transit station and semi-industrial area development projects cover 24 sites with 24,200 households, about 18% of the target supply volume.

Progress is sluggish even in areas already selected as public housing complex pilot districts. Initially, the government expected that by promoting the public housing complex project, urban regulations such as floor area ratio would be relaxed, increasing landowners’ profitability by more than 30% compared to existing projects, encouraging active resident participation. However, the response has been unexpectedly low. Among the 38 candidate sites announced in the first to third rounds of the public housing complex pilot projects in Seoul, only 12 sites exceeded the preliminary district designation requirement of 10% resident consent rate. Only two sites, Eunpyeong-gu Jeungsan 4 District and Susaek 14 District, meet the requirements for official district designation.

The volume secured through public redevelopment and reconstruction maintenance projects is also only 27,000 households, about 19% of the target (136,000 households). Participation from large-scale reconstruction apartment complexes in the Gangnam area of Seoul is currently limited. Due to legislative delays and low resident participation, the designation of the main project districts, initially expected in July, has been inevitably postponed. It is expected to be delayed until the end of the year.