LH Increases Legal Capital from 40 Trillion to 50 Trillion Won to "Establish a Foundation for National Housing Stability"

Passage of Construction Act Amendment in Plenary Session: Legal Capital Increased by 10 Trillion Won to 50 Trillion Won
Capital Increase Essential for Stable Public Rental Housing Supply
Annual Supply of 80,000 Public Rental Homes to Sustainably Promote Housing Stability for Low-Income Residents

The statutory capital of Korea Land and Housing Corporation (LH) will be expanded from 40 trillion won to 50 trillion won. This capital increase is necessary to boost the supply of public rental housing this year.

On the 12th, LH announced that following the passage of the amendment to the Korea Land and Housing Corporation Act in the National Assembly plenary session on the 11th, the statutory capital will be increased by 10 trillion won from 40 trillion won to 50 trillion won.

The statutory capital is the capital stipulated in Article 4 of the Korea Land and Housing Corporation Act, and the government cannot invest beyond this amount. LH utilizes government investment funds (capital), the Housing and Urban Fund (loan funds), tenant rental deposits, and its own funds while carrying out rental housing-related projects.

As of the end of last year, LH's paid-in capital reached 39.9994 trillion won, just below the statutory capital limit of 40 trillion won. Since 2018, LH has supplied an average of 65,000 public rental housing units annually, and according to the government's housing welfare roadmap, plans to continue supplying an average of 80,000 rental housing units each year going forward.

Therefore, amending the corporation law to increase the statutory capital was urgent to ensure stable project execution. If the statutory capital is not increased, additional government investment will be restricted, leading to increased reliance on LH’s own funds, which would heighten financing burdens and interest expenses, potentially causing losses in the rental housing business. As of the end of last year, LH holds approximately 1,328,000 public rental housing units nationwide, accounting for about 70% of the total, and is conducting projects such as lifecycle-customized housing supply and emergency housing support for vulnerable groups.

With the passage of this amendment to the corporation law in the National Assembly plenary session, LH explained that it will be able to receive stable government support for some of the funds needed for rental housing projects, establishing a foundation to continuously promote the supply of public rental housing according to the housing welfare roadmap. It is also expected to significantly contribute to stabilizing the housing market through smooth implementation of government housing supply policy projects such as the 3rd New Town development and the 2·4 measures, thanks to the alleviation of financial burdens. LH anticipates that an increase in paid-in capital following the statutory capital hike will also help improve financial soundness.

Kim Hyun-jun, President of LH, said, "With the stable housing supply foundation established through this legal amendment, we will strive even harder to supply high-quality rental housing that meets the public’s expectations, ensuring residential stability and stabilizing the real estate market." He added, "We will also continue to pursue innovation, including implementing LH innovation plans, and focus on our core roles to regain public trust and transform LH into a new organization that meets the public’s expectations."

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