Democratic Party of Korea lawmaker Bok Gi-wang [provided by the lawmaker's office]
Democratic Party of Korea lawmaker Bok Gi-wang [provided by the lawmaker's office]

Democratic Party of Korea lawmaker Bok Gi-wang, who represents Asan-gap in South Chungcheong Province and serves as floor whip of the National Assembly's Land and Transportation Committee, said Thursday he had introduced two bills to streamline the process by which local development corporations pursue public housing projects — a partial amendment to the Local Public Enterprises Act and a partial amendment to the Special Act on Public Housing.

Under the current Local Public Enterprises Act, local development corporations established by metropolitan or provincial governments must obtain a feasibility review from a designated expert institution and secure approval from the local assembly before proceeding with any new investment project totaling 50 billion won ($32.8 million) or more. The requirement is part of the local fiscal investment review regime, designed to prevent fiscal mismanagement by assessing the necessity and financial viability of large-scale projects before they get underway.

In practice, however, the same requirement applies without exception to public housing projects that local governments are legally obligated to supply — and critics say it has become a bottleneck rather than a safeguard.

Data bear that out. Of the 51 feasibility reviews that local development corporations submitted for public housing projects over the past six years — 28 for pre-sale units and 23 for rental units — 26, or 51 percent, were rejected. Broken down by type, 18 of the 28 pre-sale housing cases (59.4 percent) and 8 of the 23 rental housing cases (40 percent) were found ineligible. More than half of the projects that local governments are legally required to deliver were turned away at the review stage.

The process is also time-consuming. The feasibility review alone takes roughly seven to eight months, and internal deliberations, reporting to the local government head and assembly approval add another four months — meaning the full process stretches to about a year. The basic review fee runs 70 million won per project, with surcharges applied depending on the scale and complexity of the work.

Korea Land and Housing Corp. (LH), by contrast, is not subject to the same requirement. The Ministry of Finance and Economy issued a legal interpretation holding that a preliminary feasibility study serves no practical purpose for public housing projects already mandated by law.

To level the playing field with LH and eliminate project delays, Bok introduced amendments that would exempt public housing district development projects and public housing construction projects carried out by local development corporations from the mandatory feasibility review for new investment projects.

The amendment to the Local Public Enterprises Act explicitly codifies the exemption, while the amendment to the Special Act on Public Housing establishes a separate special provision exempting such projects from the review notwithstanding Article 65-3, Paragraph 1 of the Local Public Enterprises Act. The dual-track approach reflects the fact that an exemption clause already exists in the Local Public Enterprises Act but has been rendered ineffective by legal interpretation — amending both laws simultaneously is intended to lock in the exemption on two fronts.

If the amendments pass, local development corporations would be able to pursue public housing projects without a feasibility review, just as LH does. The changes are expected to cut the process by up to about 10 months and save at least 70 million won per project. Because delays tend to drive up project costs and push pre-sale prices higher, shortening the process is expected to ease upward pressure on those prices.

"I will clear away unnecessary administrative procedures so that people who urgently need housing can move into new homes as quickly as possible," Bok said.


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