LH Split Raises Concerns Over Slowing Housing Supply

The host pointed out, “Why split it if you want to speed things up? It was originally a group of separate entities that were merged. But now they are getting a divorce again,” questioning the effectiveness of artificially dividing the existing integrated organization. Calls for practical alternatives, such as strengthening construction departments, were also added.

Concerns have been raised that the LH split will isolate less profitable departments related to rental housing. Analyst Lee Sang-woo commented, “The development corporation side will be a profit-generating department, but if you go to the asset corporation, you’ll be dealing with tenant complaints without making money. It seems like it will become a department that people avoid, where they might not even get performance bonuses, let alone a good salary.” This suggests the potential for income and career disparities between development and rental departments, making the rental sector an undesirable department for employees.

The host pointed out, “Moreover, LH’s debt ratio is already unimaginably high. And it’s said that the Housing and Urban Fund’s surplus funds are almost depleted.” In this situation, analysis suggests that if the rental housing sector is separated, it will struggle to survive independently and face difficulties in securing funding through methods like issuing corporate bonds.

It is pointed out that the Korea Housing Management Corporation (KHMC) already exists as an LH subsidiary, and there are concerns that its operational scope may overlap with that of the asset corporation, leading to reduced efficiency.

The host mentioned, “It is said that there is already strong local opposition because people are afraid that employees who would have to spend money by splitting the company will disappear.” This is interpreted as concerns about brain drain within the local community and damage to the local economy due to the company split. In Jinju, there is strong opposition to the relocation of the LH headquarters.

Analyst Lee Sang-woo emphasized, “For supply to proceed reliably, there’s no other way than to send an excellent leader who will take full responsibility there and push everyone hard to get it done.” He stressed that changing the signboard alone will not automatically increase supply. Instead, it requires deploying excellent leaders and strong responsible management to drive projects at a fast pace, similar to the 'bulldozer' style of supply in the past. In essence, he argued that the problem is more about people and execution than organizational structure.