Kim Yoon-deok Apologizes for Rising Housing Prices, Plans to Announce 73,000 New Homes in October

Kim Yoon-deok, the Minister of Land, Infrastructure and Transport, expressed regret over the recent rise in housing prices and rental costs in the metropolitan area, emphasizing the need to expedite housing supply measures. He announced plans to reveal the locations for 73,000 new public housing units as early as October and intends to meet with Seoul Mayor Oh Se-hoon soon to address differences regarding the release of greenbelt land and development in Yongsan.

Additionally, a reform plan for the Korea Land and Housing Corporation (LH) will be unveiled in September, with a focus on centralizing the second relocation of public institutions around existing innovation cities rather than distributing them regionally.

During a press briefing on August 14 marking his first anniversary in office, Minister Kim stated, "We aim to make the announcement regarding the new public housing sites by October."

The government had announced a plan the previous day to stabilize the rental and sales markets by quickly supplying housing, proposing the creation of over 100,000 new public housing districts in metropolitan areas, particularly near transit stations and on idle land. Among these, the locations for 27,000 units in three districts, including Gangseo in Seoul and downtown areas in Namyangju and Gwangju, were prioritized for immediate disclosure, while the remaining 73,000 units will be announced later.

Minister Kim noted, "The 73,000 units are ready for announcement as discussions with local governments have concluded, and only administrative procedures remain. We plan to ensure the announcement is possible by early October."

He added that there are also additional housing units where negotiations with local governments are 80-90% complete, stating, "We will announce these as soon as the discussions are finalized, although there are still variables in the negotiations regarding the scale of additional supply."


Minister Kim indicated that he would meet with Mayor Oh Se-hoon as early as August 20 to further reconcile differences regarding housing supply issues.

When asked whether the greenbelt could be released without the consent of the Seoul city government, he acknowledged, "There are no legal or institutional restrictions on this matter," adding, "We believe we can proceed with public housing districts based on legal grounds."

However, he emphasized the importance of collaboration between the Ministry and the city government, stating, "We must work together to narrow our differences to avoid causing public anxiety while advancing housing supply. We cannot simply proceed on our own because we have the authority, nor can we allow the government to appear inactive if the city opposes us."

Minister Kim also mentioned that the government has accepted eight out of ten regulatory improvement proposals requested by the city regarding housing supply. However, he expressed caution regarding the relaxation of private development density and the transfer of membership rights in reconstruction and redevelopment projects.

He stated, "Relaxing private development density and transferring membership rights could stimulate housing prices, and if multiple redevelopment projects are pursued simultaneously, it could lead to concentrated demand for demolition and relocation. We must carefully manage the timing and volume of these projects to avoid further adverse effects."

In response to criticisms that the government is being passive regarding redevelopment projects, he clarified, "Reconstruction and redevelopment are crucial tools for housing supply policy, and we will continue to provide necessary support to accelerate these projects."


The possibility of utilizing the Yongsan Park site for housing supply has also been officially considered. Minister Kim stated, "We are looking at the entire Yongsan Park, not just the narrow concept of the Yongsan Children's Garden, to explore feasible options," indicating that while no decisions have been made, all possibilities will be discussed through social dialogue and consultations with relevant agencies.

The government also plans to continue discussions with the city regarding the expansion of housing supply in the Yongsan International Business District. Initially planned for about 6,000 units, the government is seeking to increase this number to around 10,000, while the city maintains that only an additional 800 units can be accommodated.

Minister Kim remarked, "We need to reconvene with the mayor to confirm and discuss the scale of the Yongsan International Business District," suggesting that some issues could be resolved through a dialogue where both sides make concessions.


Meanwhile, Minister Kim apologized for the worsening instability in housing prices and rental markets in the metropolitan area over the past year. He stated, "I view the simultaneous rise in both sales and rental prices as very serious, and I feel sorry for not being able to resolve the real estate issues as Minister."

He identified the main causes of the recent price increases as a lack of housing supply, abundant liquidity in the market, interest rates, and market sentiment. He particularly highlighted the significant drop in construction starts in recent years due to project financing instability and rising construction costs.

Minister Kim noted, "Recent non-apartment supply has remained at only 20-30% of past levels," emphasizing that reviving non-apartment supply entities to provide diverse housing types in the shortest time possible is key to addressing rental issues. He added, "We will ensure that this supply plan does not become merely a verbal commitment or a showy announcement, but rather a comprehensive government effort."


The LH reform plan, initially scheduled for the first half of the year but postponed, is expected to be announced next month. Minister Kim stated, "The main framework of the LH reform plan has already been largely disclosed, and the decision-making process has been delayed. It will be finalized in September."

He emphasized the need to strengthen LH's capabilities to accelerate housing supply, stating, "We are focusing on enhancing and developing its functions rather than downsizing LH."

The second relocation of public institutions will also be pursued with a focus on 'concentration and integration' around existing innovation cities. Minister Kim remarked, "We will not relocate public institutions as if distributing them like pieces of cake to different regions. Except for very special cases, we will focus on relocating to innovation cities, allowing anchor companies and research institutions to move together to create synergistic effects."

Regarding the relocation of administrative agencies, he noted, "The President has directed that we aim to reduce the number of institutions remaining in Seoul to zero unless there are special circumstances, and we will carry out this process fairly through necessary procedures such as public hearings and consultations with labor unions."