“Speculative real estate investment is not a new problem,” Lee said. “With the skyrocketing prices, apartments are especially a problem, threatening many ordinary people’s hopes.”
Lee believes urban planning and engineering should be approached as means of solving problems that stem from flaws in the nation’s social structure.
|Lee Heon-uk, CEO of the Gyeonggi Urban Innovation Corporation (GICO)|
“I started thinking about the endemic problem of our social structure during my years in college, after I witnessed many Koreans in their 40s being pushed out of firms and either failing to gain stable employment or starting their own businesses and then failing at that as well.”
With those concerns in mind, Lee’s ultimate ideal in housing policy is to establish a mass supply of affordable housing.
GICO’s goal is to fully meet the needs of Gyeonggi residents, Lee said. “In order to do that,” he said, “we need to provide a mass supply of affordable homes for the people.”
According to Lee, the heart of the current housing problem lies in the sales-centered system, which forces the government to rely on the private sector when it comes to the housing supply and how to utilize the profits from development projects.
“Land prices have to rise first,” Lee said. “Price increases will naturally stimulate the housing market, and as a result, the local government will see an increase in tax revenue.”
Lee’s first and foremost solution is boosting the supply of rental homes. This is because fewer people are looking to buy homes these days, whereas demand for rental housing is constantly on the rise.
“We will be focusing on successfully supplying the 41,000 public rental homes that the local government promised to provide within this year,” Lee said. “If need be, GICO will establish more projects to supply rental housing, aiming to provide at least 30 percent of housing stock inside Gyeonggi Province in the long term.”
Lee sees a need to upgrade the quality of rental homes as well. He hopes to change society’s perception of public rental housing as “cheap” and made from inferior materials.
“We will make our best efforts to make sure that ordinary, middle-class people can enjoy living in premium-quality homes for at least 20 years, paying a small amount of rent rather than interest on a loan,” he said.
Lee also plans to do away with the current system of apartment presales, where buyers purchase homes before construction starts. Regardless of the ongoing controversy, starting in 2020 GICO will put its apartments up for sale only after a construction project is significantly underway. This plan faces fierce opposition from construction companies, which perceive the new system as one that shifts risks to them.
New apartment blocks in the young neighborhoods of Dongtan, Hwaseong, and Gwanggyo, Suwon -- slated to break ground in 2020 -- will be the first experiments with the new system of post-construction sales.
Lee further intends to build mixed-use complexes at major transport centers as a way to support talented entrepreneurs in their 20s and 30s. This project, he says, would not only help to address housing issues, but could also be a breakthrough in the unemployment crisis.
“We plan to build at least three 50-story startup clusters adjacent to subway stations,” Lee said. “These will be work-residence complexes where young people can sleep, play and work in the same place,” he said.
Lee also welcomed the disclosure of original unit prices for real estate, another revolutionary change to housing policy in South Korea. GICO will be disclosing the original prices of its apartments.
“Real estate transactions are made upon the land, which is public property. The people have a right to know exactly how much money has been invested into the land,” Lee said.
Over the long term, Lee plans to broaden GICO’s influence overseas.
“Although there have been some setbacks in the past, overseas development is now an essential challenge for the corporation, not only for the body’s advancement but also to create jobs for firms inside our city,” Lee said. “We hope to expand our work abroad by building networks and establishing cooperative projects with businesses, both domestic and foreign.”
The organization also has plans to undertake urban regeneration and revitalization projects and to introduce smart city features, as well as new forms of rental housing.
Apart from “innovative,” “impartial” and “customer-centered” are two other keywords Lee stresses as the leader of GICO.
Lee said he will make sure that profits from land and housing developments are distributed fairly, and that at the same time he intends to focus on solving housing problems facing the middle class.
“We must expand our role as a public corporation -- for example, by increasing the housing supply at a groundbreaking level and by reinvesting the profits from land development projects through government-led policies,” he said. “Not only would I return the extra profits to society, but I would take on the responsibility as the ‘developer,’ paving the way for a new era of rental housing.”
Lee’s vision for GICO is “an innovative corporation with strong responsibility.”
“A public corporation’s work is different from that of a private company,” Lee said. “Making profits and maintaining big numbers on the financial statements is not everything. We must provide quality housing services to our citizens.”
In speaking about changes to the organization, Lee said he will bolster both the public and corporate aspects of GICO.
“By strengthening the corporation’s core competencies, we strive to enhance our self-innovating capabilities and to carry out the innovate policies (decided) by the government,” he said.
“A business mindset is essential -- always thinking from our customers’ perspective and responding sensitively to external changes,” Lee said. “We have to aggressively and proactively accommodate these influences from outside.”
[Profile of Lee Heon-uk]
Currently, 11th CEO, Gyeonggi Urban Innovation Corporation
-Co-chair, public information support committee for Democratic Party of Korea’s Central Election Commission during 19th presidential election
-Member of Democratic Party of Korea’s new party committee
-Head of JeongMyung law firm
-Chairman, public welfare and economy committee at Lawyers for a Democratic Society
-Head of public welfare headquarters at People’s Solidarity for Participatory Democracy
-Member of Korean Bar Association’s legislative committee
-Founding member of game rating and administration committee
-Staff attorney at Lawtec law firm
-Attorney at Shin & Kim law firm
-Passed 40th national bar exam
By Choi Ji-won and Park Jong-kyu (email@example.com)