Hong Ji-sun, the nominee for Minister of Land, Infrastructure and Transport, will immediately confront housing supply issues if she passes the National Assembly confirmation hearing. The government is set to announce an additional 73,000 housing units, and follow-up measures from the August 13 supply plan are already in progress. Significant tasks await, including expanding the role of the Korea Land and Housing Corporation (LH) and negotiating housing supply with Seoul.
On her first day after being nominated, Hong emphasized the need for consistent and predictable policies to stabilize the housing market. She stated that the government would swiftly implement the announced housing supply measures to ensure actual construction and occupancy.
This suggests a focus on executing existing supply plans rather than introducing new policies.
According to the Ministry of Land, Infrastructure and Transport, the government has officially begun follow-up actions on the August 13 rapid housing supply measures. Starting today, policy briefings on improving the reconstruction and redevelopment systems have commenced, indicating that subsequent schedules are already in motion.
If appointed, Hong's first performance metric will be the 'supply speed.' The government announced that the August 13 measures would yield an additional supply effect of over 230,000 units in the metropolitan area. Among the new public housing sites, 1,000 units in Yeomchang Park, Gangseo District, 21,700 units in Namyangju's urban area, and 4,500 units in Gwangju's station area have already been disclosed, totaling 27,200 units.
The remaining 73,000 units are expected to be announced by the end of September or early October at the latest.
A greater challenge lies in how quickly the government can move from site selection to district designation, compensation, and construction. The government aims to reduce the average time from announcement to construction from 68 months to 37 months.
Given Hong's emphasis on increasing execution power until actual construction begins, this goal is likely to become a key performance indicator for her tenure.
Upcoming 73,000 Units Announcement and Expanding LH's Role
Reforming LH's structure and expanding its supply role are unavoidable tasks.
The government's supply policy is shifting from selling public land to the private sector to increasing LH's direct involvement in projects. This approach aims to accelerate construction timelines by involving the public from the project's inception.
This direction is also reflected in next year's budget. The housing supply budget for 2027 is set to increase from 21.2 trillion won this year to 30 trillion won. The public housing supply target will also rise from 194,000 units this year to 218,000 units next year.
Newly introduced residential project financing (PF) loan interest subsidies and PF anchor REITs will focus on expediting construction at sites stalled due to funding shortages.
As LH's supply role expands, the government's responsibility for managing financial health and housing quality will also increase.
Hong has experience in public housing projects through her work with the Gyeonggi Housing and Urban Corporation (GH) while serving as the head of the Gyeonggi Province Urban Housing Office. However, she faced criticism for being slow to recognize budget increases and rent hikes in some GH projects, raising questions about how she will manage the much larger LH.
She will also inherit ongoing housing supply negotiations with Seoul.
Last month, Minister Kim Yoon-deok and Seoul Mayor Oh Se-hoon met twice to discuss the utilization of Yongsan Park but failed to reach a conclusion. The government believes it can supply housing for young people and newlyweds on some sites with existing or damaged structures, while the city insists on fully preserving Yongsan Park.
Seoul has proposed developing a hub that combines youth housing and physical AI industries in the area after relocating the Tancheon Water Reclamation Center. It has also raised the issue of increasing the legal limit for private redevelopment floor area by 1.2 times.
Following the announcement of the ministerial change, it is likely that Hong will become the main negotiator in these discussions.
On her first day, Hong did not disclose her stance on specific issues but stated, “Having worked extensively in local government, I have experience in how central government policies operate at the local level,” and assured that she would consult thoroughly with the Seoul government.
She will need to decide whether to continue discussions on the Yongsan Park issue or secure supply volumes from additional sites like Tancheon. The government must also clarify its position on the regulatory easing requested by the city for redevelopment projects.
Addressing Supply Issues While Restructuring the Organization
Beyond real estate, there are numerous challenges to tackle.
The fifth national railway network construction plan, which Hong has directly overseen as the second deputy minister, is set for finalization this year. She will also need to address follow-up measures regarding recent safety incidents involving railway workers.
The Ministry of Land's budget proposal for next year is a record 69 trillion won. With increased funding for housing supply and transportation infrastructure projects, it will be Hong's responsibility to explain the necessity and feasibility of these projects during the National Assembly review process.
While implementing significant policies, the organization will also need restructuring. As the current second deputy minister, Hong's transition to minister will necessitate appointing a successor. There is also interest in whether further appointments will follow at the first-grade and department head levels.
However, some believe that maintaining policy continuity is more critical than a large-scale organizational overhaul at this time. With follow-up measures from the August 13 supply plan already underway and only about a month until the announcement of additional new housing sites, significantly disrupting the housing supply operational line could slow down policy execution.
A professor of real estate noted, “Hong also emphasized 'consistency and predictability' on her first day,” adding, “If she takes office, it will be important to see how much of the existing supply system she maintains while imprinting her own execution style.”
He concluded, “Hong will effectively have no 'honeymoon' period, as major schedules such as supply plans, legal amendments, new site announcements, and negotiations with Seoul are already in progress.”
* This article has been translated by AI.
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