Concerns Over 'Gongjikja Preemptive Speculation'... Additional New Housing Sites to Be Announced Next Month

Announcement of Second New Housing Site for 149,000 Households
Pre-Speculation Concerns High but Supply Measures Accelerate
Will Anti-Speculation Measures Prevent a Second Gwangmyeong-Siheung?

Minister of Land, Infrastructure and Transport Byeon Chang-heum is deep in thought at the 4th High-level Party-Government Meeting held at the National Assembly in Yeouido, Seoul, on the afternoon of the 28th. The party and government discuss measures to block illegal activities such as expanding public officials' property registration and innovation plans including the reorganization of Korea Land and Housing Corporation (LH). / Photo by the National Assembly Press Photographers Group

[Asia Economy Reporter Moon Jiwon] The government plans to proceed as scheduled with the announcement of additional new housing sites next month, despite allegations of land speculation by employees of the Korea Land and Housing Corporation (LH) in new towns. While the government believes that strong anti-speculation measures will prevent major issues, concerns are rising that setbacks are inevitable as public trust in LH has plummeted, and Minister of Land, Infrastructure and Transport Byeon Changheum, who led the February 4th housing plan, is expected to be replaced as early as the beginning of next month.

According to sources inside and outside the government on the 29th, the Ministry of Land, Infrastructure and Transport plans to announce a second round of new housing sites totaling 149,000 units, including 110,000 units in the metropolitan area next month. Previously, the government announced plans through the February 4th housing plan to supply approximately 260,000 new public housing units across 15 to 20 locations nationwide. Among these, the locations for 100,000 units, including the Gwangmyeong-Siheung district (70,000 units) in the metropolitan area, were finalized at the end of last month.

Industry insiders had expected that the second round of new housing sites would be announced mainly in areas cleared of public officials’ land speculation after prior investigations, but the government has decided to announce all the planned locations for now. It is known that the locations for the new housing sites have already been determined, with only detailed coordination work remaining.

Some have argued that lands with many share transactions, which are expected to have higher speculation, should be excluded from the new housing sites. However, since most major lands in the metropolitan area involve numerous share transactions, this is considered difficult. Therefore, there are many concerns that allegations of public officials’ speculation, similar to those in the Gwangmyeong-Siheung district, may arise again when the second round of new housing sites is announced next month.

The government believes that once the “Measures to Eradicate Illegal Real Estate Speculation and Prevent Recurrence” are announced on the same day, it will be able to regulate and prevent public officials from gaining unfair profits retrospectively, even if speculation cases occur in the new housing sites. The measures include mandatory asset registration for all public officials involved in real estate-related work and reporting the source of funds when purchasing real estate.

However, there are still criticisms that it is premature to designate the second round of new housing sites, as it remains difficult to eradicate speculation through proxy ownership. Projects promoted alongside the new housing sites, such as the “Urban Public Housing Complex Development Project” and the “Public Institution Direct Implementation Redevelopment Project,” also appear to have lost much momentum. This is because public opposition is strong, as these projects are led by LH. Amendments to laws such as the “Special Act on Public Housing” for these projects are currently pending in the National Assembly.

Another obstacle is the high likelihood that Minister Byeon, who proposed the public development project ideas, will be replaced as early as the beginning of next month. Minister Byeon has proposed various housing supply plans since his tenure as LH president and has led the announcement and implementation of the February 4th housing plan since taking office as minister. According to political circles, after the announcement of anti-speculation measures and housing supply candidate sites and the conclusion of the Seoul mayoral by-election, a personnel change for the successor Minister of Land, Infrastructure and Transport is expected.

This content was produced with the assistance of AI translation services.