[Edaily Reporter LEE DAWON ] As the government calls for “all-out housing supply,” the Korea Land and Housing Corporation (LH) has been tasked with the daunting dual responsibilities of expanding housing supply and reorganizing its structure. With the need to increase the volume of construction projects starting next year by 52% compared to this year, while also restructuring its organization, workforce, and business operations, analysts say the key will be preventing operational gaps during this transition period.

According to the Ministry of Land, Infrastructure and Transport on the 6th, the government plans to announce the LH reform plan around the end of this month and begin the full-scale separation process as early as October. The core of the plan is to split LH into the Housing and Urban Development Corporation (tentative name) and the Housing and Urban Asset Corporation (tentative name), with the former handling land development and housing construction and supply, and the latter managing rental housing operations, housing welfare, and land and housing acquisitions.

The government’s reason for splitting up LH is to accelerate the pace of housing supply. It believes that separating the functions of development from those of rental housing and housing welfare will allow the Development Corporation to focus its capabilities on land development and housing construction and supply. An expert who participated in the LH reform discussions also assessed the move as “an expression of the government’s determination to speed up supply, even if it means taking this approach.”

The problem is that the organizational separation process and the expansion of housing supply are proceeding simultaneously. Even if the separation process begins as early as next month, there are still significant procedural steps remaining before the two corporations can actually launch. Since LH is a public corporation established under the “Korea Land and Housing Corporation Act,” splitting it into two entities requires the enactment or amendment of relevant laws and deliberation by the National Assembly.

Even if the legal foundation is established, the assets currently held by LH and its debt of approximately 173 trillion won must be allocated to the two corporations, and the affiliations and duties of its nearly 9,000 employees must be reorganized. In addition, it must be determined which corporation will take over the ongoing land development and housing construction projects, and contractual relationships and project-specific responsibilities must be transferred. It is also necessary to establish the funding structure for the Asset Corporation, which will be responsible for rental housing and housing welfare functions.

In this regard, observers both inside and outside LH estimate that, considering the legislative amendments, the allocation of assets and liabilities, and the transfer of organizational structure, personnel, and projects, the actual separation could take more than a year.

In this scenario, the separation process would coincide precisely with the period when LH’s housing supply is set to increase significantly. According to the plan announced by LH on the 27th of last month, the number of units for which construction will begin for public housing projects will increase by 52 percent, from 50,000 this year to 76,000 next year. From 2028 to 2030, the plan calls for the start of construction on more than 100,000 units annually, with annual procurement totaling approximately 30 trillion won.

There is also a supply volume that the government has decided to bring forward through the “August 13 Rapid Housing Supply Plan.” The start of construction for 89,000 units in existing public housing sites—including the Third-Phase New Towns and Seoripul—will be accelerated by up to one to two years. In essence, the organizational split is coinciding with a period when LH must not only significantly increase the supply volume but also accelerate the pace of individual projects.

There are also quite a few projects already underway. In the third-phase new towns—including Goyang Changneung, Namyangju Wangsuk, Hanam Gyosan, Bucheon Daejang, and Incheon Gyeyang—construction is currently underway on 23 blocks totaling 15,651 households. In the case of Incheon Gyeyang, projects are proceeding simultaneously in blocks where the completion rate is in the 99% range and in others where it is less than 1%. Critics point out that even within the same district, the timing of groundbreaking and main subscription periods varies by block, necessitating project-specific schedule management.

The key challenge is ensuring a seamless transition between existing projects and new supply schedules even while reorganizing the company. The separation plan currently disclosed does not include specific details on how ongoing projects will be transferred or how personnel will be assigned. A construction industry official stated, “The key question is whether existing projects can continue to move forward even while the organizational separation is underway,” adding, “It must be determined which organization will take on the projects scheduled to break ground in 2027 and 2028, and how the personnel responsible for them will be allocated.”