Government to Conduct Joint Inspections of Local Housing Association Sites with Soaring Construction Costs and Contributions

Following Local Government Inspections,
Central Ministries to Launch Special Inspection

The government will begin a special inspection of local housing associations starting July 11. Previously, local governments had been tasked with assessing the current situation following a directive from the President, but now central government ministries will also participate.

The Ministry of Land, Infrastructure and Transport announced on July 10 that, in order to prevent illegal and unfair practices and the resulting damages in the operation of local housing associations, it will conduct a joint special inspection with the Fair Trade Commission, the Anti-Corruption and Civil Rights Commission, local governments, Korea Real Estate Board, and Korea Housing and Urban Guarantee Corporation until the end of next month.

Since the end of last month, local governments have been conducting a comprehensive survey of all 618 associations nationwide. For each association, they are reviewing the entire operation, including whether there have been any false or exaggerated advertisements during member recruitment, irregularities in the use of contributions and financial management, as well as issues related to joining the association and construction contracts.

In May, Lee Jae Myung, then the Democratic Party presidential candidate, was listening to a citizen from Daegu complain about the local housing association while campaigning in Goryeong, Gyeongbuk. Photo by Yonhap News

In addition, joint inspections will be carried out for projects where there are concerns that members may suffer significant losses, such as those with a sharp increase in construction costs or contributions. The Ministry of Land, Infrastructure and Transport will oversee the overall support, the Fair Trade Commission will address unfair practices, and the Anti-Corruption and Civil Rights Commission will support dispute mediation. The Korea Real Estate Board will assess the appropriateness of construction costs, while the Korea Housing and Urban Guarantee Corporation will conduct business analysis.

If illegal or unfair practices are detected at any project site, corrective orders or fines will be imposed in accordance with relevant laws. If necessary, legal action such as requesting an investigation will also be taken. Kim Gyucheol, Director General for Housing and Land at the Ministry of Land, Infrastructure and Transport, stated, "Through this inspection, we aim to eradicate illegal and unfair practices, protect the rights and interests of association members, and create a sound environment for local housing association projects." He added, "Based on the inspection results, we will also prepare measures to improve the local housing association system."