President Lee, Ministry of Land and Public Institutions Business Briefing
"If public rental housing is built near subway stations, higher rental deposits will help public finances"
"Rumors of houses built cheaply and sold at high prices to LH"... Orders investigation by relevant ministries
Orders review of establishing a subsidiary to manage LH's debt and assets separately
President Lee Jaemyung has instructed that public rental housing projects should be developed in prime locations, such as areas near subway stations. He emphasized the need to fundamentally change the perception that public rental housing is 'cheap' and only for people facing financial difficulties. He also directed that, rather than outsourcing land development to private companies, public institutions such as the Korea Land and Housing Corporation (LH) should carry out the development themselves.
On December 12, at a Ministry of Land, Infrastructure and Transport business briefing held at the Sejong Convention Center, President Lee stated, "If you look at cases supplied by LH and others, general sale housing is built in the best locations, while public rental housing is clustered in remote, less desirable areas." He made these remarks to highlight the issue.
He continued, "When people think of public rental housing, they inevitably associate it with cheap places where people in hardship gather. Naturally, people do not like public rental housing."
He pointed out that building public rental housing near subway stations would allow for higher deposit payments, which could prevent financial losses. He also reiterated the importance of public institutions like LH directly developing land.
President Lee said, "Build public rental housing near subway stations, and make them spacious-about 82 to 99 square meters-so that even middle-class families can live there. If you build them with a reasonable floor area, you will be able to charge higher rental deposits." He added, "This is also a way to prevent financial losses." He further emphasized, "In the Seoul metropolitan area, competition among private companies for bids is intense. Good locations should be developed directly by public institutions."
President Lee: "There are rumors that houses are built cheaply and sold at high prices to LH"-orders investigation by Ministry of Land
President Lee also addressed rumors regarding LH's purchase of rental housing, specifically that homes are built cheaply and then sold at high prices to LH. He instructed the Ministry of Land and other relevant agencies to investigate. President Lee said, "There are rumors that construction companies are building homes worth 100 million won and selling them to LH for 120 million won for rental housing purposes." He asked if there had been any confirmed cases. In response, LH Vice President Lee Sangwook replied, "There are ongoing investigations, but no cases have been found so far."
President Lee pressed further, saying, "There are rumors of easy profits and 'money for nothing' in these transactions," and ordered a large-scale investigation by the Ministry of Land, Infrastructure and Transport. When Minister Kim Yoonduk said, "There was a case that went to trial, but the verdict was not guilty," President Lee responded, "Whether they were found guilty or not is not important. There are widespread claims that LH is being taken advantage of in this way, so please look into the matter thoroughly."
Orders review of establishing a subsidiary to manage LH's debt and assets separately
President Lee also instructed officials to consider establishing a subsidiary to manage liabilities and assets such as rental deposits separately. The rationale is that if LH improves its financial soundness, it will be able to accelerate its housing supply projects.
President Lee said, "If you look at LH's finances, the debt ratio is high," and asked, "Isn't the largest portion of this the rental deposits?" When it was explained that, of the 160 trillion won in debt, about 100 trillion won is related to the rental business, he said, "Consider whether it is technically possible to separate and specialize the management of debt and assets."
Meanwhile, President Lee instructed his aides to review and report on the need to reintroduce a bill that would allow the government to provide relief to victims of rental scams first, and then claim reimbursement from the perpetrators. Last year, before the general election, he pledged to introduce such a relief bill, and the Democratic Party passed a special amendment on rental scams in the National Assembly. However, the amendment was scrapped after former President Yoon Sukyeol exercised his veto power.
During a discussion on the rental scam issue, President Lee said, "There was an attempt to legislate a system where victims would be compensated first and the government would later seek reimbursement, but the president at the time rejected it. Many people now ask me, 'Why haven't you implemented this promise as president?' Since I made an official pledge, I must keep it. As this will require a budget and there are many considerations, please report separately." Chief Secretary Kim Yongbeom replied, "The Policy Office and the Democratic Party are reviewing a draft, and I will report back later."
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