Millions in gains from an illicit housing bid. Is this justice?

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Millions in gains from an illicit housing bid. Is this justice?

Published: 16 Jan. 2026, 00:03

Audio report: written by reporters, read by AI

Joo Jung-wan

The author is an editorial writer at the JoongAng Ilbo.

Imagine a school where an important exam has just been administered. A report comes in that a student boosted his academic ranking through cheating. The allegation is not vague suspicion but is backed by concrete evidence. To complicate matters, the student happens to be a candidate for the student council. What should the school do? It would first need to conduct a thorough investigation to establish the facts. If cheating were confirmed, the exam score would be annulled and strict disciplinary action imposed. Disqualification as a student council candidate would be unavoidable. Sweeping the matter aside would be unacceptable to other students.

Lee Hye-hoon, nominee for the first minister of planning and budget, responds to reporters’ questions as she arrives at her confirmation hearing preparation office set up at the Korea Deposit Insurance Corporation in Jung District, Seoul, on Jan. 8. [NEWS1]

A similar controversy has surfaced during the vetting of a Cabinet nominee. The issue centers on allegations of an illicit apartment subscription involving Lee Hye-hoon, the nominee for minister of planning and budget. The core claim is that she unfairly inflated her subscription score by exaggerating the number of dependents, enabling her household to win a bid for a large apartment in Seoul’s Seocho District. As a result, the couple is alleged to have secured market gains worth tens of billions of won (tens of millions of dollars). If true, this would not be a minor clerical error but a serious violation of the law. The Ministry of Land, Infrastructure and Transport has long warned that inflating dependent counts constitutes a disruption of housing supply order and is subject to criminal punishment. A guilty verdict could lead to up to three years in prison or a fine of up to 30 million won under the Housing Act.

Let us examine the facts step by step, based on materials disclosed by Cheon Ha-ram of the Reform Party. In July 2024, the Raemian One Pentas complex in Banpo-dong, Seocho District, officially announced its subscription process. The complex is a reconstruction of the former Shinbanpo 15th complex. The nominee’s spouse applied for and won a unit classified as type 137A, with an exclusive residential area of 137 square meters (1,475 square feet). In Korea, apartment sizes are often discussed by supply area, which includes the exclusive living space plus a proportional share of common areas, rather than by exclusive area alone.

The cutoff score for winning this unit was 74 points. Even with full marks for the subscription account holding period, worth 17 points, and the length of time without owning a home, worth 32 points, an applicant would still need four dependents to reach the threshold, which yields an additional 25 points.

The nominee and her spouse have three sons. That means all three sons would have had to be counted as dependents at the time of application for the household to qualify. However, one of the sons held his wedding ceremony in December 2023, seven months before the subscription announcement. The rules governing housing supply are explicit: When calculating dependents, children must be unmarried. Under the regulations, a married child is excluded from the dependent count.

As controversy grew, the nominee responded that parents cannot intervene in an adult child’s marriage registration. This explanation misses the point. The decisive issue is whether the son was married or unmarried at the time of the subscription. The housing supply rules contain no provision stating that a child who has not filed a marriage registration can still be treated as unmarried. If a married child was included as a dependent at the time of application, regardless of registration status, that would constitute grounds for canceling the subscription as an illicit bid.

The number of dependents is not automatically calculated by the system. It is entered directly by the applicant. In other words, if false information was submitted, it would suggest an active intention to win the apartment through misrepresentation. The official sale price of the unit acquired by the nominee’s household was 3.6784 billion won (about $2.5 million). At present, no units of the same size are listed on the market, but smaller units with an exclusive area of 107 square meters in the same complex are being offered at around 7.4 billion won (about $5.0 million). Based on current prices, the capital gain relative to the original sale price is estimated at more than 4 billion won (about $2.7 million).

A view of the Raemian One Pentas apartment complex in Banpo-dong, Seocho District, Seoul (the dark-colored buildings at center), where Lee Hye-hoon, nominee for minister of planning and budget, won a unit through a subscription now under scrutiny over alleged irregularities. The complex is among the most expensive residential developments in Seoul. [SAMSUNG C&T]

With a confirmation hearing scheduled at the National Assembly on Monday, this is far from the only allegation facing the nominee. At a minimum, she must provide a clear and convincing explanation of the illicit subscription claims or step aside voluntarily. If the allegations prove accurate, the presidential office cannot avoid responsibility for inadequate vetting. This is not a matter of ideology or partisan alignment. It goes to the fairness and credibility of Korea’s apartment subscription system itself.

The controversy also highlights the need to reexamine the price ceiling system for new apartments. Introduced for private-sector housing in 2007 under the Roh Moo-hyun administration, the system is now in its nineteenth year. On paper, its goal was to curb excessive price increases and cool overheated housing markets. In practice, it has increasingly turned new apartment subscriptions into what Koreans call “lottery sales,” delivering enormous windfalls to a small number of winners.

Good intentions do not guarantee good outcomes. The more new apartment prices are artificially suppressed, the larger the capital gains captured by a handful of successful applicants. Meanwhile, the majority who fail in the subscription process are left with frustration, and the overall supply of new housing shrinks further. It may be more reasonable to allow somewhat higher initial prices if that helps expand housing supply and restore a sense of fairness to the system.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.