LH Chief Lee Seong-hoon Addresses Concerns Over Public Housing Debt

Lee Seong-hoon, the president of the Korea Land and Housing Corporation (LH), addressed concerns on October 12 regarding the financial health of the organization amid an expansion of public rental housing supply. He stated, "A significant portion of this is universal rental housing, which helps improve our financial structure."

During a National Assembly audit session, Lee responded to criticism from ruling party lawmaker Yoo Sang-beom about the rising debt and losses associated with the increased supply of public rental housing. Lee explained, "While the volume of rental housing is increasing, a considerable part of it is universal rental housing."

He noted that universal rental housing charges rents close to market rates, unlike traditional low-income rental units, which often charge 10% to 30% below market rates, leading to losses. He emphasized that the structure of the upcoming rental housing supply will differ from the past.

Regarding LH's long-term debt outlook, Lee acknowledged concerns raised by Yoo, who projected that LH's debt could surge from approximately 197 trillion won this year to around 370 trillion won by 2030, citing the financial burden from expanding direct public land development.

Lee explained, "As land compensation and construction volumes increase for the third new town and subsequent designated new towns, we expect debt to rise. The process of expanding supply inevitably leads to longer capital recovery periods, resulting in debt accumulation."

He also addressed the decline in profitability due to rising construction costs, stating, "Unlike in the past, the cost of apartment construction has significantly increased, making it difficult to generate sufficient profits from development projects." He expressed his understanding of the debt increase issue and committed to actively discussing solutions with budget authorities.

Additionally, the audit session highlighted delays in urban public housing complex projects. In response to Democratic Party lawmaker Lee Yong-seon’s concerns about delays in the Seoul City pre-review committee and pre-planning consultation, Lee acknowledged, "While the pace is somewhat faster than private redevelopment projects, it has not met our expectations."

Regarding the delays in the Seoul City pre-planning consultation, he stated, "We are inquiring and urging whether the delays are due to a lack of personnel or an overload of work at the Seoul City, but progress has not been satisfactory. We will engage more actively with the Seoul City on this matter."