The Roles and Future of LH
as Public Developer
December 18, 2021
By Thoa Kim Nguyen, 2020 GMPA Student(Public Management and Public Sector Reforms)
Korea Land and Housing Corporation (LH) plays a significant role of public developer in contributing to the sustainable Urban Development, affordable Housing Supply and Welfare Trajectory and Future
CEO Kim Hyun-jun delivered an insight and informative lecture about the roles and future of LH as Korea’s Public Developer in contributing to the sustainable Urban Development, affordable Housing Supply and Welfare.
According to the lecture, the LH has been established for around 12 years (from 2009) based on the merging between Korea National Housing Corporation (KNHC) and Korea Land Corporation (KLC). This merge aimed to build one-stop service of Urban Development and Regeneration, Housing Supply and Welfare. The Corporation has mission to “lead the improvement of life quality and national economy by providing stable residential environment and making efficient use of land”.
Being a large corporation with a large number of employees (9,512 people), including 65% male and 25% female, the LH has major business in 08 different sectors which are Newtown Development, Housing Construction, Housing Welfare Project, Industrial Complex Development, Urban Regeneration, Balanced Regional Development, Global Development and Inter-Korean Development. Until now, it has been getting a lot of achievements spreading from Housing Construction with 77% supplied public rental housing to City Development with 81% supplied Residential Land to the Development of Industrial Complex with 14% supplied Complexes nationwide. What needs to be emphasized here is that with the percentage of public rental housing covering in the total unit of the nationwide, LH must be extremely successful in helping the Korean Government to solve the shortage of housing and fulfill their housing welfare policy.
Currently, LH ranks the 5th in the total amount of assets of major group asset in 2021 with total assets of 197 trillion KRW. The net profit of LH is 3.3 trillion KRW showing a moderate increasing trend over the period between 2012 and 2020. The Sales amount is remarkable high with 24.4 trillion KRW and the annual investment in the year 2020 was 28.5 trillion KRW, accounting for 30-45% of total investment in the public sector. These figures show the efficiency of LH in its operating.
Regarding the contribution to housing and city national policies, LH has been playing an important part in executing policies of the government in the housing supply plan of the government as well as National Economic Development policies like Korean version of New Deal Policy, New Southern and Northern Policy. Taking 68% of the housing units supply, LH has supplied 1.3 million units out of 2 million units nationwide. In implementing the state policies, it also corporates closely with the Government Ministries, which are Ministry of Economy and Finance (MOEF), Ministry of Land, Infrastructure and Transport (MOLIT), Ministry of Health and Welfare of South Korea (MOHW) and Ministry of SMEs and Startups (MSS).
Playing a significant role of public developer in contributing to the sustainable Urban Development, LH has been focusing on the public values and long-term perspective development which is the cycle of planning, developing, investing, managing, returning, reinvesting and then planning again. It seeks for the balance between public interest and profit based on expertise and public confidence. The role of LH is essential in the area that profit-oriented and small-scale development projects running by private companies has not reached.
In terms of project structure and key project models, there are New Town Development, Housing Construction, Residential Welfare, Urban Regeneration, Balanced Regional Development, and International Projects. The New Town Project Model is used to enable the efficient land use maximizing public interest, resolve the over-concentration in Seoul and increase urban infrastructure efficiency along with reduce social costs. Housing Construction Model is used for promoting the housing stability for the vulnerable class by supplying pre-sale housing and rental housing. There are various models built for different objectives: college student, youth, newly married couple and elderly. Residential Welfare Model is aiming to provide welfare services to strengthen the living standards and maintain the residential environment of the vulnerable. There are 4 types of support in this model: Housing support, Residential support, Management support and Information support. Among them, rental housing is diversified with permanent rental, national rental, public rental (5,10,50 years), purchase rental and long-term rental. Care services for the vulnerable and childcare is a highlight in residential service, which helps to reduce the burden to the society to take care of these groups. Urban Regeneration Model with the development of a “First move-in Virtuous cycle” method to improve the poor residential and resettlement as well as complex development with start-up support facilities is also remarkable. Balanced Regional Development Model with Free Economic Zone, Industrial Complex, Campus Innovation Park has contributed a lot in reducing over-concentration in the metropolitan areas and balancing the national development. Not only investing in domestic market, LH has been reaching the international market with investment and service projects underway in 15 countries. Some of the projects are attracting a lot of attention such as Hanoi social housing project which develops the social housing for low-income households in urban areas through a joint investment with a local company (Ecopark).
The CEO also introduced the future vision of LH with 3 strategies: (i) improving public values based on integrity, fairness and transparency; (ii) leading new residential paradigm; (iii) strengthening global cooperation and (iv) sustainable growth with the leading role to 4th industrial revolution and eco-friendly development. The Commitment to environmental responsibilities was the highlight in the vision with green modeling of Zero-energy housing and urban development.