Gyeonggi Province and GH Policy Recommendations Reflected in Government Housing Supply Plan

The plan to convert government support funds for public rental housing into investments, which Gyeonggi Province and Gyeonggi Housing & Urban Development Corporation (GH) have continuously recommended to expand public corporations' capacity to supply public rental housing, has been reflected in government policy.

As a result, local public corporations including GH will now be able to utilize the Housing and Urban Development Fund, which is allocated for public rental housing construction, for capital expansion like Korea Land & Housing Corporation (LH), thereby expanding financial capacity for public housing supply.

According to Gyeonggi Province, the Ministry of Land, Infrastructure and Transport's "Housing Rapid Supply Plan for Stabilizing Jeonse and Sales Markets," announced on the 13th, includes improvements to the method of fund support for rental housing supplied by local public corporations.

Previously, the Housing and Urban Development Fund used for public rental housing construction was reflected as equity investment for LH, allowing capital expansion, but local public corporations like GH received it in the form of subsidies and could not reflect it in capital. Consequently, even when supplying the same public rental housing, local public corporations could not reflect the support funds in capital, resulting in differences in capital expansion and capacity for additional business development.

Through this institutional improvement, local public corporations will now be able to receive the Housing and Urban Development Fund allocated for public rental housing construction as equity investment and expand their capital.

Gyeonggi Province and GH have made over 20 institutional improvement recommendations to central government departments including the Ministry of Land, Infrastructure and Transport through written submissions, visits, and related meetings to strengthen local public corporations' financial soundness and expand the public housing supply base.

The Ministry of Land, Infrastructure and Transport analyzed that if the Housing and Urban Development Fund supported by government subsidies is reflected as GH's capital, GH's expected debt-to-equity ratio (as of 2029) will decrease from 333% to 307%, a 26 percentage point improvement. In addition, as the debt ratio improves, it is projected that the issuance of additional corporate bonds will become possible, expanding fund procurement capacity by approximately 2.8 trillion won.

With capital expansion enabling GH to secure necessary funds for public housing construction more stably, expectations are high that GH will gain greater capacity to pursue large-scale public housing supply projects.

Son Im-sung, Director of Urban Housing of Gyeonggi Province, said, "With local public corporations now able to utilize government support funds for capital expansion like LH, we expect GH's financial capacity and public housing supply capabilities to be strengthened together," adding, "Going forward, we will continue to identify irrational systems and cooperate with the central government to ensure GH stably implements Gyeonggi Province's housing policy."