The Korea Land and Housing Corporation (LH), tasked with implementing the government's housing supply expansion policy, is grappling with a triple challenge of staffing shortages, financial burdens, and organizational restructuring. Despite setting a goal to break ground on 96,000 housing units nationwide this year, concerns were raised during a parliamentary audit about the need for adequate personnel and financial resources to support this increased supply.
During the National Assembly's audit on October 12, LH President Lee Seong-hoon reported that the corporation aims to start construction on 96,000 units this year, including 86,000 in the metropolitan area.
Lee stated, "We will contribute to stabilizing the housing market by quickly supplying more public housing," emphasizing the commitment to carry out the government's housing supply policy without disruption.
LH is shifting its business model from selling previously developed public land to directly constructing housing. This transition aims to reduce project timelines by concurrently handling permits, compensation, demolition, and site preparation, with plans to accelerate the start of major public housing projects by more than a year compared to previous schedules.
However, during the audit, lawmakers focused on LH's organizational and financial capacity to meet its supply targets. While the supply volume is increasing, LH's workforce has actually decreased. According to Democratic Party lawmaker Yeom Tae-young, the number of regular employees at LH fell from about 7,100 in 2020, when the public housing supply was around 60,000 units, to 6,398 currently. The increase in delegated and contracted work has led to a heavier workload for each employee.
President Lee acknowledged the need for more staff, stating, "The volume of work has increased, and the types of projects have become very complex. We are in a situation where we need to hire on a large scale."
LH is requesting personnel increases from relevant government departments, including the Ministry of Land, Infrastructure and Transport and the Ministry of Economy and Finance. Lee also pointed out that the declining treatment of employees is an issue that must be addressed during the expansion of supply. He explained that following the integration of LH and subsequent organizational reforms, employee salaries have fallen to the lowest levels among public enterprises.
He stressed, "If employee morale declines, we cannot push forward with the government's key policy of housing supply," highlighting the need for improved working conditions.
Financial structure has also emerged as a burden in the expansion of supply. During the audit, it was projected that LH's debt could rise from 197 trillion won this year to 372 trillion won by 2030. As LH transitions from selling public land to directly constructing housing, it must bear the initial costs of land development and construction, leading to larger upfront financial commitments.
The burden of borrowing is increasing, compounded by the expansion of public housing construction and compensation for the third new town project. Additionally, the sharp rise in construction costs in recent years has been identified as a factor reducing the profitability of LH's development projects.
Lee explained, "Construction costs have risen by nearly 50%, making it difficult to generate significant profits from development projects." He added that while the speed of debt increase is rapid, the recovery pace is slow, and he is requesting financial support from the government.
* This article has been translated by AI.
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