[2025 Audit] "LH Unable to Recover 15 Trillion Won Due to Inability to Sell Land"

Parliamentary Audit by the National Assembly’s Land, Infrastructure and Transport Committee on October 14

There are projections that Korea Land and Housing Corporation (LH) will be unable to recover approximately 15 trillion won due to its inability to sell land parcels.

On October 14, during a parliamentary audit, Han Jun Lee, President of LH, stated, "With the cross-subsidization structure no longer possible, we expect that LH will be unable to recover 15 trillion won of the amount projected in our medium- to long-term financial management plan by 2029."

Cross-subsidization refers to the method by which LH covers losses from public rental housing projects using profits gained from land development and sales. Since the beginning of the Lee Jaemyung administration, this business structure has been identified as an issue, leading to the formation of the LH Reform Committee centered around Lee Sangkyung, the First Vice Minister of Land, Infrastructure and Transport, and relevant experts. The committee is currently preparing detailed plans for organizational and business structure reforms. The housing supply expansion plan announced last month also included provisions for LH to directly implement housing supply projects.

Han Jun Lee, President of Korea Land and Housing Corporation, is responding to a lawmaker's question at the National Assembly Land, Infrastructure and Transport Committee's audit held on the 14th in Yeouido, Seoul. Photo by Yonhap News

During the audit, various opinions were exchanged regarding public-centered supply measures and LH's financial status. Kim Do-eup, a lawmaker from the People Power Party, said, "We are not a developmental dictatorship, and it makes no sense to demand the construction of 1.35 million housing units over the next five years. The government should simply relax regulations and restrictions so that construction companies can supply housing smoothly."

Jung Jeom-sik, also from the same party, commented, "With several trillion won being spent annually just on interest expenses, I question whether LH is in a position to discuss strengthening its public role." Min Hong-chul, a lawmaker from the Democratic Party of Korea, added, "I have never directly mentioned LH's financial soundness before, but demanding both enhanced public responsibility and the maintenance of financial soundness is contradictory."

President Lee stated, "With debt and losses continuously increasing due to the surge in rental housing, and with reduced revenue from land sales, it will be impossible to maintain the cross-subsidization structure that has so far supported public housing supply and regional balanced development projects. Above all, what is most urgently needed is increased government financial support and backing for the corporation’s organization and workforce."

He also pointed out problems with the current method of recruiting personnel at LH. President Lee said, "As a public developer, securing outstanding talent is most important for LH, but the current local talent quota system is problematic. Since the relocation to innovation cities and the adoption of local talent recruitment, cartels can form among certain universities at the level of public enterprises." He added that it is necessary to broaden the scope to include both the Seoul metropolitan area and non-metropolitan regions.