Lee Seong-hoon, president of the Korea Land and Housing Corporation (LH), stated on October 12 that the organization is reviewing the financial structure and operational methods related to the separation of its development and housing welfare functions.
During a National Assembly audit session, Lee responded to a question from Shin Seong-beom, a member of the ruling People Power Party, regarding financial soundness after the organizational split. He said, "We are examining how to structure the finances and operate the two new entities, and we need to discuss specific matters with the Ministry of Land, Infrastructure and Transport."
LH is currently considering a plan to separate into two entities: a 'Housing and Urban Development Corporation' (tentative name) responsible for housing development and supply, and a 'Housing and Urban Asset Corporation' (tentative name) that will handle rental housing operations and welfare functions. As the existing structure, which has relied on profits from development projects to cover losses in rental operations, will change, key issues include debt allocation and funding methods.
In this context, Kim Young-guk, head of the Housing and Land Office at the Ministry of Land, explained, "We have previously announced a plan to transfer a portion of the development corporation's profits to the asset corporation and are currently discussing with the finance authorities about increasing support rates for rental housing construction."
Lee also emphasized the need for workforce expansion and financial support to increase housing supply. In response to concerns raised by Democratic Party lawmaker Yeom Tae-young about LH's workforce reduction and rising turnover rates, he noted, "The volume of projects has increased, and the types of projects have become very complex, necessitating a large-scale recruitment of personnel."
He added, "We are actively requesting personnel increases from the Ministry of Land and other government departments and are negotiating to ensure that our workforce expansion plans are reflected promptly."
Regarding financial soundness, he remarked, "In recent years, prices have risen significantly, but construction costs have increased even more, nearly by 50%, making it difficult to generate substantial profits from development projects."
He further stated, "The rate of debt increase is rapid, and the recovery speed is slow. We are requesting financial support from the government and are working with the Ministry of Land to ensure that related matters are reflected in the budget authorities."
* This article has been translated by AI.
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