Ministry of Construction proposes 110,000 billion VND credit package to develop social housing: Is it feasible?

The goal of developing 1 million social housing apartments: Many problems

In 2022, the Ministry of Construction set a target of having 1 million social housing apartments nationwide by 2030. However, reality shows that this goal is becoming difficult to achieve due to too many obstacles.

At the national online conference to remove difficulties for the real estate market on the morning of February 17, Mr. Nguyen Van Sinh, Deputy Minister of Construction, admitted that the development of social housing and worker housing projects is facing difficulties.

The Ministry of Construction proposed a credit package of 110,000 billion VND to develop social housing. (Photo: EC)

Firstly, social housing project investors in order to be exempted from land use fees still have to determine land use fees before carrying out exemption procedures, causing administrative procedures to arise. According to reports from businesses, it takes 1-2 years to carry out this procedure.

Second, according to regulations, commercial housing projects in urban areas of type III or higher must reserve 20% of land funds for building social housing, leading to most localities not allocating land funds to develop independent social housing projects.

In addition, this regulation leads to land allocation that is not consistent with the local housing development program and plan; land use planning and plan; urban planning... leading to the land fund for social housing development in the past being much less than the demand and not creating initiative for the locality.

Third, regulations on selecting investors for social housing projects are still overlapping and inconsistent with legal regulations on investment, bidding, and land, leading to complicated selection of investors for social housing projects, taking a long time to complete procedures, and slowing down project implementation progress.

Fourthly, regarding housing for industrial park workers, the Vietnam General Confederation of Labor is a socio -political organization representing workers and laborers, has financial resources, has made direct investments in a number of housing projects in the union's institutional areas in a number of localities, and wishes to participate as an investor in the project to build housing for workers.

However, current laws do not have regulations allowing this organization to participate in investing in building housing for industrial park workers.

Sixth, social housing projects must reserve at least 20% of the housing area for rent and investors can only sell it after 5 years of use; in reality, many projects cannot rent this area, leading to the situation where these apartments for rent are left empty and wasteful.

Overview of the Conference.

According to the Deputy Minister of Construction, not taking into account valid and reasonable costs such as sales organization costs, business management costs, etc. while the standard profit does not exceed 10%, it does not attract businesses.

“Not regulating the time to determine the price before selling, leasing, or leasing-purchasing social housing invested in construction with non-budgetary capital and determining the price must be appraised by the provincial People's Committee also causes time and costs for businesses, increasing costs,” said Mr. Sinh.

Regarding promoting social housing development, the Deputy Minister of Construction proposed to submit to the National Assembly for consideration and promulgation a "Resolution of the National Assembly to pilot a number of policies to promote social housing development" to immediately remove a number of difficulties and obstacles.

At the same time, effectively implement the Project "Investing in the construction of at least 1 million social housing apartments for low-income people and industrial park workers in the 2021-2030 period".

Mr. Sinh proposed that the Government arrange a credit package of about 110,000 billion VND in the form of refinancing (similar to the 30,000 billion VND package that performed very well in the previous period of 2013-2016) to provide to commercial banks to lend to social housing projects and workers' housing projects. Effectively implement Resolution No. 11/NQ-CP of the Government on the Socio-Economic Recovery and Development Program.

Social housing development investment fund is necessary

Mr. Nguyen Van Dinh, Vice President of Vietnam Real Estate Association, said: Social housing development still has many limitations. Stronger policies are needed to promote it. In order to create products suitable for the market, stimulate transactions, and start the production and business cycle for the whole economy.

“In addition, there should be policies to encourage and stimulate the development of commercial housing at suitable prices. This will both stimulate production and business and create revenue for the budget,” said Mr. Dinh.

Regarding the target of having one million social houses by 2030, Mr. Nguyen Quoc Hiep, Chairman of the Board of Directors and General Director of GP.INVEST Company, said that there should be an investment fund for social housing development as proposed by the Ministry of Construction recently, but it should not only be used to support credit for social housing projects but should have a part for localities to focus on supporting technical infrastructure for social housing projects.

Mr. Nguyen Quoc Hiep, Chairman of the Board of Directors and General Director, GP.INVEST Company. (Photo: VGP)

Before that, there is the issue of planning and land fund. We must select social housing areas concentrated in reasonable planning locations, then use this fund to invest in building concentrated technical infrastructure, then choose investors. This will take the initiative in planning and at the same time increase the attractiveness of social housing projects for investors.

“In addition, the regulations on social housing standards, the steps in implementing social housing projects, standards and policies for social housing buyers also need to be updated and simplified according to changing market conditions, including the unit price for social housing construction,” said Mr. Hiep.

According to the Ministry of Construction, there are currently 9 newly licensed social housing projects nationwide with a scale of 5,526 apartments; 114 projects with 6,196 apartments have been completed; 27 projects with 8,245 apartments are eligible to sell future housing according to the announcements of the Departments of Construction.

Regarding workers' housing, nationwide, there are 2 newly licensed projects with a scale of 1,729 apartments; there is 01 project with 32 apartments that have been completed; there are 04 projects with 2,328 apartments that are eligible to sell future housing.

Source: https://www.congluan.vn/bo-xay-dung-de-xuat-goi-tin-dung-110000-ty-dong-phat-trien-nha-o-xa-hoi-lieu-co-kha-thi-post235676.html