Building Homes with a 'Public Fund' and Sharing Profits... LH Considers Introducing 'Project REITs' Linked to Public Land

Minister Yoonduk Kim: "Quality Matters More Than Quantity... We Must Supply High-Quality Homes People Want to Live In"
Proposal for Public Land-Linked REITs Model: Public Investment and Return of Development Profits
Public Rental Housing Near Subway Stations to Expand to 53,000 Units... Private Brands Introduced for Image Renewal
Gadeokdo New Airport: Eligible Contractor to Be Selected in August, Construction to Begin Immediately in Second Half
Expansion of Direct KTX Connections in the Metropolitan Area... High-Speed Rail Use Without Transfers from Incheon and Suwon
Sejong Presidential Office Construction to Start Next August... Support for Completion of National Assembly Sejong Building by 2030

The government is shifting the housing supply paradigm of Korea Land and Housing Corporation (LH) in the Seoul metropolitan area from “land sales” to “direct construction.” It is also considering introducing a “project REITs” model that would allow the public to participate as investors. Plans are in place to significantly increase the supply of public rental housing near subway stations and to enhance the quality of housing welfare by applying leading private sector brands. Key infrastructure projects, such as the groundbreaking of the new Gadeokdo Airport, expansion of direct KTX connections in the metropolitan area, and early completion of the presidential office in Sejong, will also be accelerated.

Minister of Land, Infrastructure and Transport Yoonduk Kim receiving a work report from an affiliated organization. Ministry of Land, Infrastructure and Transport.

On January 13, Yoonduk Kim, Minister of Land, Infrastructure and Transport, stated at the “work report from affiliated organizations” held at the Government Complex Sejong, “Our society has already entered an era where quality matters more than quantity. The urgent task is to change the perception that LH apartments are cheap and of poor quality, and to supply high-quality homes that people actually want to buy.”

In this work report, LH highlighted “expanding supply” and “a major transformation in the quality of rental housing” as its core tasks. Acting President Kyungsook Cho of LH announced, “In accordance with the September 7 measures, we plan to supply 1.35 million homes in the metropolitan area by 2030. To accelerate the supply, we will significantly expand the approach of LH directly building housing instead of selling land for apartment complexes to the private sector.”

Particularly noteworthy is the “public land-linked new construction acquisition project REITs” model proposed by LH. In this model, the state provides the public land, LH supplies the construction funds, and the Housing and Urban Guarantee Corporation (HUG) offers guarantees, while private companies handle design and construction. A portion of the funding will be sourced from a “public fund” open to all citizens, returning development profits to the public. Acting President Cho requested policy review, saying, “This model maximizes public interest while guaranteeing a certain return to the private sector.”

In response, Gyucheol Kim, Director General for Housing and Land at the Ministry of Land, Infrastructure and Transport, encouraged, “Last year, LH signed contracts for 53,000 new purchase-rental units, the highest ever.” He added, “The project REITs model is a good proposal. The key issue is the sustainability of its profit structure, and the Ministry, together with related agencies, will continue to study and discuss this.”

For qualitative improvement, LH will increase its plan for public rental housing near subway stations from the existing 37,000 units to 53,000 units. The supply of mid-sized units with exclusive areas of 60 to 85 square meters will also be expanded. LH also announced plans to introduce leading private sector brands into public rentals to remove the “rental housing stigma.”

The Korea Real Estate Board reported plans to establish an accurate statistical system for foreign real estate ownership. When Minister Yoonduk Kim pointed out that “unverified rumors, such as Chinese sweeping up apartments in Gangnam, have caused significant public misunderstanding,” Taerak Son, President of the Real Estate Board, responded, “We will quickly create detailed composite statistics on land and housing ownership, broken down by region, type, and age group.”

The Gadeokdo New Airport Construction Corporation will begin priority site preparation work in the second half of this year. An eligible contractor for the detailed design will be selected in August, and construction will start as soon as the contract is signed in the latter half of the year. The National Railway Authority presented the expansion of direct high-speed train services from Incheon and Suwon as a key task, enabling passengers to use KTX without transfers in the metropolitan area. Efforts will also be accelerated to begin construction early on new rail networks such as the Southern Inland Line and the Suseo-Gwangju Line, and to build regional metropolitan rail networks in line with the “5 Regions, 3 Special Zones” balanced growth strategy.

The Multifunctional Administrative City Construction Agency announced its goal to start construction of the Sejong presidential office in August next year and have it ready for occupancy by August 2029. It will also support the completion of the National Assembly Sejong building by 2033 in cooperation with the National Assembly Secretariat, and plans to supply a total of 71,000 homes in Sejong by 2030 to strengthen its function as the administrative capital.

Meanwhile, the Ministry of Land, Infrastructure and Transport’s affiliated organizations’ work reports are being held at the Government Complex Sejong over two days from January 13 to 14. Thirty-nine public and related organizations are participating to review major policies directly linked to people’s livelihoods, and the entire process is being broadcast live to the public through the Ministry’s YouTube channel and other platforms.