[Editorial] Debt at Major Public Institutions Set to Near 1,000 Trillion Won—It Can No Longer Be Left Unchecked

The debt of 37 major public institutions is estimated to reach 1,000 trillion won by 2030. LH alone is projected to see its debt rise by 175 trillion won, accounting for 80% of the total increase. These institutions either have assets of at least 2 trillion won or are covered by government loss-compensation provisions in their founding laws. Because expanding deficits could burden national finances, urgent and extraordinary management measures are needed.
The Ministry of Economy and Finance released the “2026–2030 Mid- to Long-Term Financial Management Plans for Public Institutions” on the 1st, containing these projections. The debt of the 37 institutions is expected to increase from 778.3 trillion won this year to 997.4 trillion won in 2030. As debt rises, the debt-to-asset ratio is also projected to climb by 8.4 percentage points, from 208.2% to 216.6%.
Among these institutions, the deterioration of LH’s financial soundness is particularly concerning. LH’s debt is expected to increase by 175.3 trillion won, from 197.5 trillion won this year to 372.8 trillion won in 2030. Its debt ratio is also projected to rise by 100.6 percentage points, from 250.6% to 351.2%. The financial burden is expected to grow as LH plans to substantially increase new housing starts to expand housing supply and continue its purchase-and-lease programs for newly built and existing homes.
The reason for the worsening finances is clear: LH’s existing revenue model is faltering. Last year, LH posted its first operating loss in 16 years, since its launch through a merger in 2009. LH had originally used highly profitable land-sale revenue to offset the structural losses of its public rental housing business. However, the construction downturn has reduced private-sector demand for land, while overdue payments and contract cancellations for previously sold land have also increased. In fact, land-sale revenue plunged from 12 trillion won in 2022 to 7.3 trillion won in 2025. Losses from the public rental housing business also grew from 1.9 trillion won to 2.7 trillion won.
The burden of government policy projects is also growing. The September 7 measures announced last year significantly expanded LH’s direct implementation of public housing projects. Earlier, in June last year, President Lee Jae Myung instructed the government at a Cabinet meeting to improve the land-supply system, saying that widening gaps between public housing-site prices and actual market prices cause swarm bidding and lottery-like housing sales. The burdens associated with developing the Third New Towns, purchase-and-lease housing, and the acquisition of distressed project-financing (PF) sites are also increasing. LH is already struggling to cover its interest expenses with operating profit.
Not all of LH’s debt is national debt. However, Article 11 of the Korea Land and Housing Corporation Act stipulates that the government must cover losses from certain public-interest projects when LH’s own reserves and other resources are insufficient. This is why LH’s deteriorating finances could lead to a fiscal burden for the government. Debt cannot be regarded as unrelated to the state simply because it is not directly included in national debt.
Even so, the government’s response remains largely theoretical. The government has announced measures such as reviewing self-help efforts and strengthening preliminary feasibility studies, but it is difficult to find specific financial-management plans for institutions like LH, whose debt is surging. Public housing supply and housing welfare are necessary policies, but shifting their costs onto public-institution debt is not sustainable. The government must accurately calculate the costs of policy projects and provide the necessary funding, while LH must assess the profitability of each project and manage its financial soundness.