The volume of public housing projects carrying the names of private construction companies, such as Samsung C&T Raemian and GS Engineering and Construction, is expected to exceed 70,000 units over the next three years. Until now, the Korea Land and Housing Corporation (LH) has monopolized the public housing market, but with its active opening to private sectors, the share of privately participated public housing in LH's own permit volume is expected to exceed 30%.
According to LH and the construction industry on the 26th, it has been confirmed that LH recently held a meeting for private sector participation titled 'LH private sector participation project briefing for early commencement in 2025'.
An analysis of the materials LH distributed to private construction companies during this briefing revealed that LH plans to supply 72,000 public housing units (based on new permits) from next year to 2027. The specific targets for new private sector permits are ▲ 20,000 units in 2025 ▲ 24,000 units in 2026 ▲ 28,000 units in 2027. In terms of construction costs, this amounts to approximately 20 trillion won. An LH official noted, 'We plan to expand the share of private sector projects to at least 30% of our annual permit volume by 2027.'
If LH's plan is realized, the volume of privately participated public housing projects will increase by 86.7% compared to this year, and it will show a dramatic rise of 833.3% compared to last year's mere 3,000 units.
In particular, LH has selected candidate sites where private developers can actively participate in public housing projects, with a scale of more than 1,000 units, and where combining adjacent areas and packages is feasible. The private sector sites planned by LH for next year include 27 blocks in Gwangmyeong City (Yeongdeungpo B1-3, A1-8), Bucheon Yeokgok A-2, and Bucheon Daejang PC1, totaling 25,432 units. The average private sector budget for next year is around 500 billion won.
Beginning this year, LH has fully opened the public housing market, which it had monopolized, to private construction firms. This was due to an innovative measure announced by the Ministry of Land, Infrastructure and Transport, which granted exclusive rights to private firms for public housing projects following last year's rebar shortage incident. Consequently, LH has improved the participation environment for private construction companies by allowing realistic construction costs and increasing compensation for losses.
As public housing carrying private brands expands, it is expected that the negative perception surrounding public housing will improve due to enhancements in quality. According to LH, privatized public housing will be conditioned to carry private brands from the konkurs stage.
Lee Han-jun, president of LH, also believes that through privately participated public housing, they can break away from the existing image of public housing. At a press briefing held last month, Lee said, 'Because all constructors participating in LH's public housing projects are generally ranked 2-3, high-quality apartments could not be produced, resulting in low satisfaction among the public,' adding, 'This year, I promise that more than 10% of all apartments that LH produces will use A-grade brands.' He further emphasized, 'More than 10% of the 50,000 units to be supplied this year will be top brands such as Hyundai Hillside and Samsung Raemian, turning public housing into luxury dwellings that anyone would want to live in, rather than being treated as secondary residences.'
The expansion of privately participated public housing projects is also expected to inject vitality into the recently stagnant construction market. Another LH official said, 'Although the construction market is in recession, the release of private volume in the public housing market is expected to help private construction companies.'