KNHC: Difficult to Construct One Million Housing Units

It was confirmed that after the government announced its plan to build one million rental apartment housing units for low-income families over 10 years from 2003 as part of its efforts to provide more affordable houses to citizens, the Korea National Housing Corporation (KNHC), an incumbent agency, asked the government to reconsider the plan, saying, “The government set an unattainable goal.”

Even though the KNHC recognized the government’s position to build more houses to stabilize the housing market, it appealed that properly carrying out the project requires more supply and infrastructure.

Plan for Building One Million Housing Units Should be Reconsidered-

According to documents revealed yesterday by Jeong Hee-su, lawmaker of the Grand National Party and member of National Assembly’s Construction and Transportation Committee, the KNHC presented a policy proposal to the Ministry of Construction and Transportation (MOCT) asking for comprehensive reexamination on the plan to construct one million rental housing units.

The proposal which is comprised of nine requests states, “Considering financial difficulties, shortage of building land, and the shrinking role of local governments, the goal to build one million housing units needs to be changed.”

The KNHC also made a recommendation to the government, saying, “In order to efficiently provide rental housing units to more citizens, the building period should be extended from 10 years to 15 years.”

In other words, the incumbent agency of this project demanded that the government change the goal as well as extend the period: this project is scheduled to be completed in 2012, but the KNHC has asked the government to extend until 2017.

A source from the KNHC said, “Since the government was encouraged to increase rental housing units at that time, most of our requests were rejected.”

The source also said, “Even though financial difficulties were tackled to some extent thanks to the increase in MOCT’s financial aid per unit to the KNHC, the shortage of building land still remains as an obstacle.”

MOCT, “There is No Problem in Achieving the Goal”-

Regarding this, it was informed that the MOCT had difficulties in obtaining building land because of dissension with concerned local governments.

Lee In-ki, lawmaker of the Grand National Party and member of National Assembly’s Construction and Transportation Committee, revealed the official documents issued by local governments which have 59 designated building land areas, local governments of 42 building sites, or 71 percent, opposed the designation.

In addition, according to Special Act for Constructing National Rental Housing, the minister of construction and transportation has the obligation to confer with heads of local governments before designating construction land. However, it was revealed that there was no contact with local governments that opposed the designation except for issuing official documents.

Despite such existing obstacles of the government’s housing units project, the government announced last month that it will construct an additional 500,000 national rental housing units from 2013 to 2017 (100,000 units per year).

The MOCT and the KNHC announced that 356,209 units were approved to be constructed from 2003 until 2006, which accounts for 91 percent of the projected goal of 390,000 units.

However, the construction of 178,990, or 46 percent, actually occurred, and only 88,643 units, or 23 percent, were completed.

Concerning this, a source from the MOCT said, “It is natural to face difficulties in obtaining financial source and building land when managing such a large project,” adding, “However, we believe it’s very possible for us to achieve our goal based on the development we have done up to now.”