4 difficulties in attracting investment and developing social housing

According to Mr. Hung, it can be said that current laws already have specific and detailed regulations for units to implement social housing investment projects.

According to data updated by the Ministry of Construction as of May 19th, the whole country has completed 307 social housing projects with a scale of 157,000 units, a total area of 8 million ^m³ , and is continuing to implement 418 social housing projects, including those that have received investment approval. Of these, 100/418 projects have been licensed and are under construction.

4 điểm khó khăn thu hút đầu tư, phát triển nhà ở xã hội - Ảnh 1. — Mr. Ha Quang Hung, Deputy Director of the Department of Housing and Real Estate Market Management (Ministry of Construction), spoke at the seminar.

However, Mr. Hung also acknowledged that, when monitoring the implementation of the 2014 Housing Law and the decrees and circulars guiding investment in social housing, there are some policy groups that make it difficult for businesses and people to invest in and access social housing.

Firstly, there's the issue of allocating and arranging land for social housing development. The Investment Law stipulates that investors in commercial housing projects and urban areas must allocate 20% of the land area within the project for social housing development, but this is a rather rigid regulation. Specifically, in projects with high investment costs, prime locations, or unique features such as resorts and vacation homes on high mountain slopes, allocating this land for social housing development is inappropriate; or in apartment projects with extremely high investment costs, 60-80 million VND/ ^m² , even allocating space for low-income earners who only have to pay for operating expenses is difficult for them.

According to the figures we have, we have currently only met about 35% of the land area required for social housing.

Secondly, regarding investment procedures, current laws stipulate that the process for building social housing is no different from that of commercial housing, and in some cases, even more complex. This stems from the State's preferential policies for social housing, so when designing policies, solutions and tools for managing these projects are required, leading to lengthy investment procedures.

Finding solutions to 'unleash' social housing.

Thirdly, there is the policy group that verifies the eligibility criteria for social housing. Specifically, according to Article 49 of the Housing Law, there are 10 categories of beneficiaries; however, there are no regulations to differentiate the eligibility criteria for each case. Currently, social housing is available through purchase, lease, and lease-purchase. But regardless of the method, beneficiaries must meet certain conditions: eligibility criteria, housing type, income, place of residence, etc., leading to difficulties and delays in identifying these beneficiaries.

Fourthly, there are policies to support investors. Although the law stipulates exemptions from land use fees, value-added tax (VAT) reductions, corporate income tax reductions of around 50%, and preferential access to capital, we find that these policies are not truly effective. The key issue is that even with incentives, investors cannot factor these benefits into the selling price. Essentially, investors do not benefit from these incentives, leading to a lack of investment attraction.

According to representatives from the Ministry of Construction, there are still obstacles in organizing and implementing social housing policies, specifically regarding the financial resources allocated for social housing development.

"According to the reports we received for the period from 2016 to 2021, we have only allocated 3,163 billion VND in credit capital out of a demand of approximately 9,000 billion VND to the Social Policy Bank for lending to homebuyers. As for developers, we haven't allocated any capital yet; only recently has a 120,000 billion VND package been available for developers," Mr. Hung said.

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