The government will raise the support unit cost for construction-type public rental dwellings by 7% each year through 2030. It plans to increase the unit cost from 11,167,000 won per 3.3 square meters this year to 14,638,000 won in 2030, up 31.1%. The step aims to ease the burden on public housing operators such as the Korea Land & Housing Corporation (LH), which has grown due to rising construction costs, and improve the quality of rental housing.
However, the 2030 support unit cost planned by the government is 410,000 won per 3.3 square meters lower than the level LH reflected in its mid- to long-term financial plan. Given that the average LH liability incurred when supplying one integrated public rental dwelling last year reached 288 million won, some note that merely raising the support unit cost will not be enough to resolve the financial burden.
According to the "2026–2030 housing & urban fund fiscal management plan" obtained at the National Assembly on the 15th, the Ministry of Land, Infrastructure and Transport plans to raise the support unit cost for construction-type public rental dwellings from 11,167,000 won per 3.3 square meters this year to 14,638,000 won in 2030.
If the government's plan goes ahead, the support unit cost will rise 7% each year from 2027 to 2030. The total increase compared with this year is 31.1%. However, the annual support unit cost can be adjusted during the government budget formulation and National Assembly deliberation.
The support unit cost for constructing public rental dwellings rose 7% from 9,939,000 won per 3.3 square meters in 2024 to 10,634,000 won last year. This year it was raised 5% to 11,167,000 won. The government's preparation of a mid-term plan to raise it 7% annually for the next four years reflects the steep rise in construction costs.
The Ministry of Land, Infrastructure and Transport (MOLIT) said in the fiscal management plan, "We will make the government's support unit cost for public rental dwellings more realistic," adding, "We will increase government support to improve dwelling quality and expand fiscal support for public housing operators such as LH and local governments."
The reason the government decided to raise the support unit cost is that actual project costs are increasing faster than government support, heightening LH's borrowing burden.
According to data obtained by People Power Party lawmaker Kang Dae-sik from LH, the actual project cost per integrated public rental dwelling rose 61.5% from 226 million won in 2021 to 365 million won last year. During the same period, the government support unit cost increased only 40.7%, from 150 million won to 211 million won.
The average LH liability incurred when supplying one integrated public rental unit last year was tallied at 288 million won. Even if the government support unit cost rises, if loans account for a larger share than equity injections, the liability LH must repay can continue to grow.
The increase plan prepared by the government also falls short of the level LH reflected in its own financial outlook. In its "2026–2030 mid- to long-term financial management plan," LH assumed that the support unit cost for construction-type public rentals would rise to 15,048,000 won per 3.3 square meters by 2030. That is 410,000 won higher than the government's planned unit cost.
A Ministry of Land, Infrastructure and Transport (MOLIT) official said, "Taking into account the fiscal conditions presented by LH, the relevant ministries agreed to prepare a plan to raise it by an annual average of 7%." An LH official, regarding the difference between the government plan and its own financial plan unit costs, said, "It is because the rates of increase applied when drafting each plan were different."
LH projected that its total liability will increase by 175.3 trillion won, from 197.5 trillion won this year to 372.8 trillion won in 2030. It also expected the liability ratio to rise from 250.6% to 351.2% over the same period. The cumulative net loss expected from this year through 2030 is 5.3535 trillion won.