[Exclusive] Kim Heon-dong, SH President, "Developing 3rd New Town Instead of LH... Planning 'Gold Town' with Care Facilities"

Interview with Seoul Housing & Communities Corporation (SH) President
"Corrupt LH Loses Public Trust, Opportunity for SH"

Kim Heon-dong, President of Seoul Housing and Communities Corporation (SH), expressed a strong commitment to the development of the 3rd New Towns. In an interview with Asia Economy on the 17th at the Gaepo-dong headquarters in Gangnam-gu, Seoul, Kim said, "The 3rd New Towns were announced early in the Moon Jae-in administration, but construction has not even started yet," adding, "While Korea Land and Housing Corporation (LH) has not been able to take any action, SH, with its financial capability, will step in."

Kim assured that the 3rd New Towns developed by SH will be 'luxury new towns' different from those developed by LH so far. He said, "Unlike LH, which recently built defective houses due to missing rebar, SH adopts a post-sale method rather than pre-sale and discloses costs, allowing us to supply high-quality apartments at reasonable prices," adding, "LH's failure has created a greater opportunity for SH." He continued, "We will complete new towns equipped not only with land development but also with transportation and medical infrastructure."

As one of the plans, he unveiled for the first time the concept of 'Seoul Gold Village, Gyeonggi Gold Town, and Regional Gold City.' This involves purchasing houses or housing shares from retirees in Seoul and building luxury homes with nursing and treatment facilities within the new towns for them. The purchased houses will be used for young people who need to commute within Seoul. Kim emphasized, "There is no need for children to exhaust themselves commuting from Gyeonggi-do, while the older generation wanders around Tapgol Park in Jongno 3-ga," adding, "The Gold concept is a nationally necessary policy for the circulation between the younger and retired generations."

Kim also reiterated his pledge to supply 'Baeknyeon Jutaek' (Century Homes) better than Tower Palace. He said, "Once an apartment is built, it should be used for over 100 years," adding, "If only cheap apartments are supplied, it will inevitably become a cheap city." Additionally, he announced plans to reconstruct 40,000 units of aging rental housing in 34 areas near subway stations within Seoul.

Below is a Q&A with President Kim.

- You expressed a desire for SH to take over the 3rd New Town projects originally assigned to LH. Is this feasible?

"There is not much land left to build houses in Seoul. To secure land in the future, we plan to develop the 3rd New Towns in the metropolitan area and directly develop areas in Gangwon-do and Chungcheong-do. Especially, the 3rd New Towns are progressing too slowly. They started early in the Moon Jae-in administration, but construction hasn't even begun. We are not trying to take work away from LH; rather, since they can't even start, SH wants to step in. Moreover, LH, which built poor-quality houses, has already lost public trust. The Ministry of Land, Infrastructure and Transport also needs SH to speed up supply. There are no legal issues. LH is developing projects in Vietnam, so there is no reason SH cannot develop other regions."

- Why must SH step in? How will the new towns developed by SH differ from existing ones?

"We will create luxury new towns, not LH-level new towns. The 'Seoul Gold Village, Gyeonggi Gold Town, and Regional Gold City' are among the concrete plans. We plan to build luxury homes with comfortable nursing and treatment facilities in the new towns to accommodate retired homeowners who do not need to commute to Seoul. Their vacant homes will be used for young people working in Seoul. This allows the new towns and Seoul to develop together. Many retirees want to leave Seoul but hesitate to sell their homes. However, staying in Seoul only means going to Tapgol Park. Meanwhile, their children commute from Gyeonggi-do to Seoul, leading exhausting lives. That is unnecessary. The Gold concept is necessary for the circulation between younger and retired generations. Solving housing issues will address social problems like polarization between Seoul and provinces and low birth rates. We will create a cooperative body among provincial development corporations, and SH, with its financial power, will lead development."

Kim Heon-dong, President of SH Seoul Housing and Communities Corporation. Photo by Heo Young-han younghan@

- While LH was embroiled in scandals such as employee real estate speculation and missing rebar incidents, SH has had no such issues. What is the reason?

"Since 2006, under Seoul Mayor Oh Se-hoon, SH has taken a completely different path from LH. First, SH uses post-sale. Building first and then selling means there can be no shoddy construction. If it collapses, SH bears the full responsibility. In contrast, LH used pre-sale and even pre-subscription. They sold properties that did not yet exist. If they had completed the apartments in Geomdan, Incheon before selling, there would have been no innocent victims. Another reason is cost disclosure. By disclosing sales costs, profits cannot be hidden. SH's systems and policies have made it transparent even without employees realizing it. LH does not disclose costs. The safety management SH implemented two years ago also helped. If the workers are safe, shoddy construction does not occur. For example, the Gwangju I-Park accident happened because construction was done in winter without preparation, resulting in a worker's death."

- You said you will build Baeknyeon Jutaek (Century Homes) surpassing Tower Palace. Is it possible to upgrade public housing to luxury levels?

"Once an apartment is built, it should be used for over 100 years. In Europe, buildings hundreds of years old become valuable assets. Well-built buildings become treasures; poorly built ones become junk. For example, SH's 49-story Seed Cube Chang-dong in Dobong-gu boasts Tower Palace-level housing. However, for apartments rather than mixed-use buildings, there are limits to luxury upgrades. The government currently limits basic apartment construction costs to 8 million KRW per 3.3㎡, but exceptions should be made to raise this for post-sale or building-only sales. Recently supplied apartments in Magok and Godeok Gangil were designed 1-2 years ago and only upgraded from existing designs. Still, their quality is far superior to private apartments."

- There is not much land left for development in Seoul. What are the housing supply plans?

"First, we will gather all available sites such as Guryong Village in Gangnam-gu, Seongdui Village in Seocho-gu, and the former Seongdong Detention Center site in Songpa-gu to supply housing in Seoul. Also, there are 34 aging rental complexes over 30 years old in Seoul, including Hagye 5 Complex and Sanggye Madeul, totaling 40,000 units. We plan to reconstruct them by relaxing floor area ratios to increase from 15-story apartments to 50 stories. All 34 sites are near subway stations. The current plan may seem like a breeze, but once many citizens know, it will become a typhoon."

◆Who is Kim Heon-dong, President of SH Corporation

Kim Heon-dong served at Ssangyong Construction from 1981 to 2000. Since 1999, he has been active in the Citizens' Coalition for Economic Justice (CCEJ), holding positions such as head of the National Project Monitoring Team, head of the Real Estate and Construction Reform Headquarters, and head of the Apartment Price Bubble Removal Movement, advocating for housing price stabilization for over 20 years. From 2000 to 2002, he was CEO of Korea Construction Information System. Between 2016 and 2017, he worked as an aide in the office of National Assembly member Jeong Dong-young. He was appointed president of SH Corporation in November 2021.