Lawmakers from both the ruling and opposition parties pressed the Korea Land & Housing Corporation (LH) on its ability to deliver an expanded housing supply plan and on its financial health. Their concern is that splitting off parts of the organization and shifting to direct development of public land could disrupt supply at a time when supply targets have risen while staffing has shrunk and debt has surged. LH President Lee Sung-hoon said the company needs government funding support and a large increase in staff.
At a parliamentary audit of the National Assembly's Land, Infrastructure and Transport Committee on the 12th, Rep. Ahn Tae-joon of the Democratic Party of Korea called on LH to review unsold land and identify sites where quasi-housing could be built. His point was that LH should not be bound by existing land-use plans and should instead expand supply by changing designated uses and improving regulations.
Rep. Yeom Tae-young of the Democratic Party said the government has set a supply target of 115,000 homes but LH's workforce has declined, and added that it is unclear how the company will keep its financial structure stable after the spin-off. Rep. Yoo Sang-bum of the People Power Party said LH's debt is projected to rise from 197 trillion won this year to 372 trillion won in four years, and criticized the shift to direct development for weakening the structure under which proceeds from land sales had covered losses on rental housing.
Lee said rising construction costs mean recovery is slow relative to the pace of debt growth, and that LH is asking the government for funding support. He said the company is also in talks with the government on plans to add staff, given the increase in the volume and types of projects it handles. He said market-rate public rental housing, which charges rents close to market levels, would help improve the company's financial structure.
Both parties took aim at his remarks on tighter lending rules. At a press briefing on the 30th of last month, Lee said the 600 million won cap on mortgage loans for homes priced at or below 1.5 billion won should be lowered further. Rep. Eom Tae-young of the People Power Party said that amounts to kicking away the housing ladder for low- and middle-income households that do not own a home, while Rep. Chung Il-young of the Democratic Party said the role of the LH president is to accelerate supply rather than to curb demand.
In his opening remarks that day, Lee said LH would push to break ground on 96,000 homes nationwide this year, including 86,000 in the greater Seoul area. For public land sites such as Seoripul and Taereung, the company will carry out permits, compensation, demolition and site preparation in parallel to move up groundbreaking by more than a year, and from next year it plans to expand groundbreaking in urban areas through measures including the rebuilding of aging rental housing and the use of idle land.
He also stressed that LH would raise the quality of public housing above that of private-brand apartment complexes. The company plans to add rental housing in prime locations such as areas near subway stations, expand unit sizes so that middle-income households can live in them, and eliminate differences in finishing materials and design between units for sale and rental units.