Delays in '3rd New Town' Supply Schedule Inevitable Due to LH Rebar Omission Scandal

Schedule Adjustment Needed for October Orders
Comprehensive Investigations Increase Burden on Companies' Business Participation

Concerns are growing that the public housing supply will be disrupted due to the Korea Land and Housing Corporation (LH) ‘apartment rebar omission’ scandal, and an emergency has been triggered for the supply schedule of the 3rd phase new towns.

Many areas of the 3rd phase new towns were expected to complete most of the land compensation issues and begin construction preparations in October, but the suspension of service orders and the need for various investigations have made schedule adjustments inevitable.

Notice Regarding Preliminary Subscription for 3rd Phase New Towns.
Photo by Jin-Hyung Kang aymsdream@

According to LH and related industries on the 24th, among the six areas of the 3rd phase new towns (Namyangju Wangsuk, Namyangju Wangsuk 2, Hanam Gyosan, Incheon Gyeyang, Goyang Changneung, Bucheon Daejang, etc.), four areas including Namyangju Wangsuk, Namyangju Wangsuk 2, Goyang Changneung, and Bucheon Daejang had completed schedules such as land compensation and were scheduled to start construction around October. However, due to the rebar omission issue at LH, the schedule for service orders related to design, construction, and supervision is expected to be delayed, making the construction schedule uncertain.

LH has stated that it will revise the internal regulations applied to service orders as soon as possible to minimize problems in project execution, but there are concerns that the procedures may be delayed for a long time as it is difficult to find service companies without retired LH employees.

A construction industry official said, “The entire ordering system, including LH’s design and supervision service company selection system as well as management and supervision, has collapsed, and it is impossible to reorganize it within one to two months,” adding, “Most public housing projects promoted by LH, including the 3rd phase new towns, will inevitably be delayed from construction to move-in.”

Moreover, the fact that LH is embroiled in various investigations and inquiries is also expected to affect the project schedule. Currently, the police are investigating the design, construction, and supervision companies of the apartments with omitted rebar and LH internal employees. The Fair Trade Commission is also looking into whether there were any violations related to preferential treatment or collusion. An audit by the Board of Audit and Inspection is also planned.

Under these circumstances, it is expected to be difficult to select contractors through service orders. Construction, design, and supervision companies are feeling burdened about participating in the projects.

An official from a construction company said, “Even if a public notice is issued, we will not participate,” adding, “Any company of a certain scale will feel the burden.” He continued, “If even one mistake is caught, it would be impossible to handle the aftermath.”

Meanwhile, as the move-in schedule for the 3rd phase new towns is delayed, concerns are also raised that housing instability for pre-sale winners will intensify. According to the New Home pre-sale website, about 18,000 households were recruited through a total of 10 resident recruitment announcements conducted from September 2021 to June this year.

However, the 3rd phase new towns have already experienced significant schedule delays. The Ministry of Land, Infrastructure and Transport initially predicted the first move-in for Namyangju Wangsuk, Hanam Gyosan, Incheon Gyeyang, and Goyang Changneung districts in 2025, and for Namyangju Wangsuk 2 and Bucheon Daejang districts in 2026. But due to delays in land compensation and other issues, the schedule has been pushed back by about one to two years: Incheon Gyeyang to the first half of 2026, Namyangju Wangsuk 2 to the second half of 2026, Hanam Gyosan and Namyangju Wangsuk to the first half of 2027, and Bucheon Daejang and Goyang Changneung to the second half of 2027.

Even excluding the possibility of delays caused by the rebar omission scandal, it will take more than eight years from the announcement of candidate sites in 2018 to the first move-in. Pre-sale winners must wait five to six years until move-in. In this situation, if the schedule is further delayed due to the rebar omission scandal, there are concerns that trust in the government’s real estate and housing supply policies will be shaken.