Expansion of Local Public Bond Issuance: Will Housing Supply in the Capital Region Accelerate?

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The government significantly expanded the bond issuance limits for local public enterprises this past March. Thanks to this, Gyeonggi Housing & Urban Development Corporation (GH) received approval for over 2.3 trillion won earlier this month. As a result, housing supply projects in the capital region are expected to gain further momentum.

Reporter Choi Ho-won has the story.

[Reporter]

This is the Gwangmyeong-Siheung Public Housing District in Gyeonggi Province, located adjacent to Seoul.

It is the largest among the 3rd generation new town development projects, covering 12.71 million square meters—4.4 times the size of Yeouido, Seoul.

A total of 67,000 households are scheduled to move in by the end of 2031.

The Korea Land and Housing Corporation (LH) is responsible for nearly 80% of the project area, while Gyeonggi Housing & Urban Development Corporation (GH) handles the remaining 20%.

In March, the Ministry of Land, Infrastructure and Transport moved up the compensation schedule for this region to expedite housing supply.

[Kim Jong-woo / Head of GH Western Business Division: We were originally aiming for compensation consultations in November, but after discussions with the government and project implementers, we have shortened the timeline by four months and are now preparing for consultations in July.]

The Ministry of the Interior and Safety also revised the "Standards for Issuance of Local Public Bonds," changing the calculation method from three times the net assets minus total liabilities to three times the net assets minus the total amount of outstanding bonds, significantly increasing the issuance limit.

In the case of GH, it received approval for 2.36 trillion won in the first round this year. GH plans to inject these funds into five projects, including the Gwangmyeong-Siheung, Hanam Gyosan, and Gwacheon public housing districts, as well as the Gwangmyeong-Siheung Urban High-Tech Industrial Complex and the Ilsan Techno Valley urban development project.

[Kim Yong-jin / President of GH: We have secured an additional capacity of over 31 trillion won in bond issuance limits through 2030. We are now preparing an action plan to accelerate compensation schedules and bring forward housing construction timelines by at least one year or more.]

GH explained, "While our debt-to-equity ratio, which stood at 254% as of last year, will increase following the bond issuance, there will be no issues with long-term financial soundness, as the nature of housing projects involves recovering investments through revenue after the initial large-scale capital outlay."
※ Please note: This article was translated by AI and may contain errors.