LH rebuts Seoul’s criticism of public redevelopment: “No potential for corruption”

[Financial News] A dispute over public versus private redevelopment has continued following President Lee Jae Myung’s call for institutional improvements to encourage a shift to public redevelopment. After Seoul argued that public redevelopment also cannot guarantee project viability or speed, Korea Land and Housing Corporation (LH), which is responsible for housing supply, countered by emphasizing the transparency of project-cost spending and the savings in residents’ contributions.
On the 8th, LH said in a press reference document, “Private redevelopment associations frequently face project delays due to bribery, including accepting and offering bribes, as well as disputes and lawsuits over construction costs. LH, by contrast, has no potential for corruption, as it transparently discloses project expenditure details, including residents’ operating funds.”
According to LH, about 350 cases of corruption occurred in private-sector redevelopment projects from July 2003 to September 2023.
LH also explained that public redevelopment offers advantages over private redevelopment, such as a higher floor-area ratio, allowing savings of at least 50 million won per household. In Jangwi Zone 9, a floor-area ratio of 300%—50% higher than under private redevelopment—could be applied, increasing the number of homes supplied by 200. LH said residents’ contributions fell even as public contributions remained at a similar level.
LH said there have been two cases in which residents themselves withdrew the designation of a public redevelopment candidate site, due to conflicts among residents and other reasons, but no area has switched to private redevelopment.
An LH official said, “With additional staff and our accumulated experience, we will do our utmost to minimize the burden on residents and supply housing as soon as possible—even a day sooner—and for as many households as possible—even one more.”
The dispute began after President Lee visited Jangwi Zone 9 in Seongbuk District, Seoul, on the 4th and voiced concerns about private redevelopment projects.
At the time, President Lee said, “Compared with private development, public development offers more incentives, so residents stand to gain more in real terms. There are also fewer concerns about delays due to corruption or a lack of expertise, and fewer reasons for residents to split into factions and fight among themselves, so it seems there would be an incentive.” He added, “Rather than (LH) consulting, switching to public redevelopment seems likely to be better for residents in various ways.”
The following day, Seoul issued a statement rebutting the claims: “A black-and-white approach that divides public and private sectors and demonizes the private sector does not help expand housing supply.”

[email protected] Choi Ga-young Reporter