Government Pushes to Split LH into the Housing and Urban Development Corporation and the Housing and Urban Asset Corporation

The government has unveiled a plan to split the Korea Land and Housing Corporation (LH) into two again, 17 years after it was merged. According to the public institution functional reform initiative announced on the 3rd, LH is expected to be divided into the Housing and Urban Development Corporation, which will handle land development and housing construction, and the Housing and Urban Asset Corporation, which will be responsible for housing welfare and asset reserves. The government believes that having one organization handle both development and welfare work has slowed housing supply and increased the burden of operating rental housing. The idea is to improve supply efficiency and stabilize the housing welfare system through the split. LH's debt problem is also behind the move. As of the end of last year, LH's total debt stood at 173 trillion won, with a debt ratio of 230.8%. Losses from operating public rental housing and its role in carrying out housing sale projects are cited as factors that have increased its financial burden. However, how to divide the debt and how to cover losses in the housing welfare sector remain unresolved issues. The government is reviewing measures such as using part of the development corporation's earnings as funding for the asset corporation, and it plans to announce a more detailed reform plan later.