Minister of Land, Infrastructure and Transport Kim Yun-deok drinks water at a national public forum on real estate policy held at the KBS annex in Yeouido, Seoul, on Thursday, presided over by President Lee Jae-myung. [Yonhap]
Minister of Land, Infrastructure and Transport Kim Yun-deok drinks water at a national public forum on real estate policy held at the KBS annex in Yeouido, Seoul, on Thursday, presided over by President Lee Jae-myung. [Yonhap]

Minister of Land, Infrastructure and Transport Kim Yun-deok said Monday he is taking a "cautious stance" on raising floor-area ratios for private redevelopment projects, while signaling that he is "actively considering" partial releases of greenbelt land to boost housing supply.

Kim made the remarks at a national public forum on real estate policy held at the Korea Chamber of Commerce and Industry in Jung-gu, Seoul, pushing back against criticism that the ministry has been passive on private-sector supply. "It is not the case at all that we are focused only on the public sector," he said.

He acknowledged that the Korea Land and Housing Corporation's (LH) bold reform drive may make public-sector efforts appear dominant, but said the ministry is fully aware that a failure to deliver private-sector housing would be a serious problem. "We intend to aggressively accelerate the permitting process and boldly convert buildings — such as knowledge industry centers and former commercial properties — into housing," he said.

However, Kim said one contentious issue is the push to raise floor-area ratios for private developers. "There is considerable opinion that redevelopment projects, by demolishing existing homes, create a 'housing loss effect' that could end up driving prices higher," he said, in remarks widely interpreted as signaling a cautious stance on the matter.

When a forum participant said greenbelt releases should be approached carefully, Kim said he agreed in principle — but added: "Since becoming land minister, I have developed a strong desire to build homes even if it means releasing greenbelt land. While keeping that sense of urgency, I am actively considering whether we can secure housing supply through partial releases where necessary." The comments pointed to the possibility of additional housing supply through greenbelt releases.

Kim also said the ministry is "preparing specific measures" to boost housing supply through non-apartment housing types. On the protection of pre-sale applicants, he said the issue was "something the president personally directed," adding: "I understand there are aspects of the interest rate problem that cannot be fully resolved, but we will make sure to honor the commitments made to pre-sale applicants."

The forum also heard calls to normalize development financing for private developers — including real estate project financing (PF) — as a way to stimulate housing supply.

Participants argued that financial support must be expanded, as private housing supply has contracted with funding channels blocked at every stage, from bridge loans to main PF and down-payment loans.

Moon Gil-ju, chairman of Daishin E&D, said bridge financing — short-term loans taken out before main project financing — is critical for private developers, but PF is currently unavailable. He added that viable projects can proceed only when guarantees are in place, while others are nearly impossible to finance, and that construction sites require pre-sales of more than 90 percent of units before down-payment loans are approved — a condition that is proving very difficult to meet.


hss@heraldcorp.com