SH President Candidate Kim Heondong: "Chronic Deficit at SH... Will Change Depreciation Expense Handling Method"

"Financial Structure Innovation Needed for Stable Housing Welfare Projects"

[Image source=Yonhap News]

[Asia Economy Reporter Minyoung Kim] Kim Heondong, the nominee for president of Seoul Housing and Communities Corporation (SH) (66·photo), stated on the 10th, "I will review the method of handling depreciation costs, which account for a large portion of losses in public housing."

At the personnel hearing held at the Seoul Metropolitan Council on the same day, Kim said, "Public (rental) housing incurs significant costs not only during construction but also in operation. For the stable future of the corporation's residential welfare projects, innovation in the financial structure is necessary."

During the 2019 National Assembly audit, SH was criticized for incurring losses amounting to 1.6855 trillion won over the past five years from rental housing operations. Over five years, rental costs totaled 2.2862 trillion won, while rental income was only 600.7 billion won. The largest portion of rental costs was depreciation expenses (1.3952 trillion won).

To improve the profitability of rental housing, which is cited as the cause of chronic deficits, Kim emphasized, "I will create a consultative body with the Ministry of the Interior and Safety, which oversees local public enterprises, Seoul City, and experts, and pursue mid- to long-term financial innovation for the corporation."

He also reiterated his commitment to supplying half-price apartments. Before the personnel hearing, he mentioned the supply of half-price apartments as his first task after taking office, saying, "For half-price apartment prices, I am considering 300 million to 500 million won for apartments around 30 pyeong (approximately 99 square meters), including in Gangnam, Seoul."

Kim said, "We will generously supply half-price apartments, where the land is publicly owned and only the buildings are sold, to minimize the initial costs of purchasing housing."

He viewed the stable securing of residential land as important to continuously supply quality housing at affordable prices. He stated, "I will investigate not only small-scale residential sites but also publicly owned land, land from public enterprise relocations, and non-business-use private land," pledging to focus on securing residential sites.

Kim worked at Ssangyong Construction from 1981 to 2000 and has served as head of the Apartment Price Bubble Removal Movement Headquarters and the Real Estate Construction Reform Headquarters at the Citizens' Coalition for Economic Justice (CCEJ) since 2000. If Kim passes the personnel hearing, SH will welcome a new head after seven months.

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