The public housing construction projects named after private construction companies such as 'Raemian' and 'Jai' are set to begin this year in Pyeongtaek Goduk and Miryang Bubuk. The estimated cost for these projects, which will provide over 3,500 dwellings, exceeds 1 trillion won. The Korea Land and Housing Corporation (LH) plans to promote a total of 27,000 dwellings in public housing projects involving private participation this year, starting from this location. Given the sluggish construction market, competition among construction companies in private public housing projects, which have assured profitability and less concern about unsold units, is expected to be fierce.
According to LH on the 2nd, LH has initiated the public offering for five sites in Pyeongtaek Goduk and Miryang Bubuk for public housing projects involving private participation. This marks the first public offering for private participation public housing construction projects this year. LH plans to select priority negotiation targets next month.
The public housing projects involving private participation are initiatives that LH carries out jointly with private construction companies, utilizing private technological capabilities and brands to supply various public dwellings. LH provides the land, while the private construction companies are responsible for housing construction and sales. This arrangement allows LH to leverage the brands and technologies of private construction companies, while easing the initial financial burden related to land acquisition for the construction companies.
LH plans to supply a total of 3,447 dwellings in Pyeongtaek Goduk (2,381 dwellings) and Miryang Bubuk (1,066 dwellings). Specifically, 942 dwellings will be built on a site of 66,193 square meters at Pyeongtaek Goduk A-12BL. At Pyeongtaek Goduk A-27B, 602 dwellings will be constructed on a site of 39,806 square meters, while 837 dwellings will be built on a site of 58,769 square meters at A-65BL. In Miryang Bubuk, 744 dwellings will be supplied at A-1BL (40,182 square meters) and 322 dwellings at S-2BL (21,483 square meters).
The estimated private project cost totals 1.0531 trillion won. For Pyeongtaek Goduk, the costs are as follows: ▲A-12BL (303.8 billion won) ▲A-27B (196.9 billion won) ▲A-65BL (270.9 billion won). In Miryang Bubuk, the costs are ▲A-1BL (187 billion won) ▲S-2BL (94.5 billion won).
In particular, LH has expedited the schedule for announcing the selection of private developers so that approval and construction can take place within the year, in order to address the issue of housing supply shortages. Accordingly, the project schedule for all public offerings, excluding the Pyeongtaek Goduk A-27B district, is set for December of this year (pending) in the guidelines for this project.
An LH official noted, "We have launched the public offering for sites where we can quickly advance projects among the land we hold to fulfill the policy goal of expanding housing supply." The official continued, "Given the recent discussions about supply shortages and decreased occupancy rates, we have discovered land conditions that are favorable for actual construction to begin and have established a schedule to expedite project progress."
LH plans to fully promote public projects involving private participation starting from this initiative. LH has previously stated that it intends to advance private participation projects this year, with a historic maximum of 27,000 dwellings and a project cost of 8 trillion won.
Construction companies are also expected to show significant interest. This is because public housing projects present lower risks and the potential for stable revenue even during periods of sluggish construction. One construction company representative said, "In a situation where the construction market is not favorable, it seems that the number of construction companies showing interest in public housing projects with lower risks is likely to increase."
In particular, the fact that construction costs, which had previously acted as a hindrance to private participation projects until last year, have been actualized is another reason why interest from construction companies is expected to rise. Last year, LH and construction companies had conflicts regarding construction cost increases surrounding private participation projects. However, starting this year, LH decided to raise the standard construction costs by reflecting the rate of increase in construction costs to encourage private construction companies' project participation. Additionally, measures have been implemented to alleviate the funding burden on private developers, establish criteria for adjusting amounts due to changes in ground conditions, and modifications to upper-level plans.