President Lee Jae-young of Korea Land and Housing Corp.(Photo:LH)

President Lee Jae-young of the Korea Land and Housing Corp. (LH) is no longer a “hurry, hurry” man and is now considered a “step-by-step man” as he turns around his management style in the wake of the sinking of the ferry Sewol and its resulting loss of more than 300 lives.

The CEO, who has been on the job just over a year, said the former management style earned more money for the company, but they don’t want to see accidents happen in their lines of work, including construction sites for high-rise apartments.

“We have opted to be more cautious in our operations, although hard work is important,” the CEO said in explaining why he changed the style of the company’s operation from “work hard and fast” to a more cautious style with safety being the key word at all worksites around the country since the ferry accident on April 16.

The urgent tasks that Lee is now faced with are to reduce LH’s debts, snowballing to over 142 trillion won, and meet the demand for public housing and other housing welfare programs to a level satisfactory to the general public, stressing workplace safety.

LH’s debt rises by 100 million won for each housing unit the company builds and government projections are for 50,000 residential units to be built around the country annually to meet the demand for new housing.

LH’s expenses are high prior to building residential units as it needs land, construction costs, and payment of indemnity for expropriated real estate to landowners.

Based on LH’s own projections, if the state-owned housing construction company were to build the residential units as initially planned, its debts would balloon to 192.6 trillion won by 2017. But LH has to lop off its debts as required of all state-owned companies.

In a meeting with a local daily newspaper, the CEO said he has been able to cut the annual increase of debts to the 1.8 trillion won level from 10 trillion won every year during the President Lee Myung-bak government. He can slash debts to 49.4 trillion won by 2017, making LH a leading state-run company in terms of reduction of debts with this being the initial year for its debt reduction program.

Lee said he will look for diverse means to attract private capital in the construction of LH’s planned public housing projects from now on to cut expenses, especially by inviting private capital in the land development sector, which requires a lot of funds, while other areas including the issuance of licenses to build residential units, the supervision of the construction, and the rental of public housing units will continue to be taken care of by LH.

Lee warned that the cost reduction doesn’t mean that the public housing construction projects will be reduced, but it will clean up the unnecessary projects.

“LH wants to break away from the systems of the high-growth era that supplied a lot of land and the mass construction of large apartment complexes to be in tune with the current environment of low birthrates, increases in the number of senior citizens, single-person households, and changes in the paradigm of the real estate market by overhauling LH’s management system to be a leading model in the normalization of state-run companies’ operations,” Lee said.

With the changes in the current era, LH will have to change the central focus of its systems in its internal organization system from mass supply to residential welfare services.

Lee, quoting an economics book called “Nudge,” said that just asking for the intention to buy a house can boost sales by 35 percent. The company means to sell everything it has, including the company’s office buildings and even the residences of its employees to pay off its debts. 

Born in Hapchon, South Gyeongsang Province, Lee is a graduate of Korea University and joined the Ministry of Construction in 1980 where he served, with his last position there being the deputy minister in charge of land and residential housing in 2008 before moving to head the Gyeonggi Province City Construction Co. as the CEO.