LH Reform Provisional Plan Ready but Announcement Delayed... Public "1.35 Million Homes" Supply Also Pushed Back

Provisional Plan Finalized in January; No Further Reform Committee Meetings

Announcement Timing Undecided as Tax and Financial Measures Take Priority

Concerns Rise Over Disruptions to Public-Led Housing Supply

The Korea Land and Housing Corporation (LH) Reform Committee has already drawn up a provisional final reform plan for LH, it has been confirmed. This comes five months after the government called for a structural overhaul of LH in August last year as part of efforts to boost public-led housing supply measures. As the government has prioritized housing stabilization measures such as tax and financial policy changes, the announcement of the reform plan has been pushed back. There are growing calls to expedite its release in order to revitalize housing supply.

According to industry sources on March 24, the LH Reform Committee completed its internal meetings and prepared a "provisional final plan" in early January this year. Since the final plan was established, there have been no further related meetings within the committee. The research project on "function and role improvement," commissioned by LH in September of last year, has also recently concluded, meaning the general framework for the reform plan has already been determined.

The reform plan reportedly includes a proposal to divide LH into two separate divisions: one responsible for supplying land and housing, and the other tasked with managing and handling the associated debt. Previously, President Lee Jaemyung instructed during the Ministry of Land, Infrastructure and Transport's work briefing in December last year that options for separating the management of LH's debt and assets should be explored. Some expect that a spin-off could be implemented in accordance with the reform plan drafted after the 2021 speculative investment scandal involving LH employees in the third phase new towns. At that time, three options were suggested: ▲ separating land functions from housing and residential welfare functions, ▲ separating residential welfare from development operations (housing and land), and ▲ having the parent company handle residential welfare while a subsidiary takes charge of development projects.

The government initially planned to announce the LH reform plan by the end of last year but postponed it once to the first half of this year. It is understood that the Ministry of Land, Infrastructure and Transport is currently in final coordination with the LH Reform Committee and the presidential office regarding the reform plan.

Industry officials believe the government has delayed the announcement of the reform plan as it prioritized housing stabilization measures, such as tax reforms and financial regulations. However, as real estate supply is considered essential for stabilizing housing prices, there are increasing calls to quickly release and implement the LH reform plan. This is because the current administration has stressed that the public sector should take the lead in housing supply, and that LH must play a central role in these efforts.

Through the "September 7th Supply Measures" announced last year, the government set a target to supply 1.35 million homes in the Seoul metropolitan area by 2030. Of these, LH is responsible for 41.2 percent, or 556,000 units. In addition, LH plans to directly implement the supply of 53,000 units. As the initial pace of the project is crucial, it is pointed out that organizational restructuring should be completed swiftly to clarify the implementation roadmap. With numerous urgent issues such as delays in the development of the third phase new towns and the creation of public housing sites in the metropolitan area, finalizing internal restructuring is considered an urgent matter.

An industry official stated, "LH is the key pillar of the government's public housing supply," adding, "If the announcement of the final reform plan is delayed, it could weaken both the credibility and momentum of government policy."

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