The National Housing Fund is considered a fundamental solution to meet the housing needs of low- and middle-income earners. This solution is expected to address the shortage of affordable housing supply in large cities such as Hanoi and Ho Chi Minh City.
The necessary transformation
Many opinions say that in order to build a new solution with a large scale and impact on the housing sector, it is necessary to re-evaluate the results, especially of the social housing development program that has been implemented over the past 10 years.
Over time, the humaneness of social housing policy has been clearly seen. Many low-income families in urban areas have realized their dream of owning a home thanks to social housing projects. However, the implementation has also shown many limitations that have caused the progress to not meet the set requirements.
Implementing the Project "Investing in the construction of at least 1 million social housing apartments for low-income people and industrial park workers in the period of 2021 - 2030", in the period from 2021 to present, nationwide there are 655 projects implemented with a scale of 593,428 apartments. Of which, 103 projects were completed with a scale of 66,755 apartments, reaching about 15.6% of the Project's target by 2025.
Mr. Nguyen Van Dinh, Chairman of the Vietnam Real Estate Brokers Association, said: “The social housing development program is a humane policy, but after a long period of implementation, the results have not been high. From practical experience in social housing development, when establishing the National Housing Fund, it is necessary to recognize the experience and shortcomings in order to avoid and overcome them.”
To date, there has been no financial fund to support localities and enterprises in implementing social housing projects. Some projects have encountered difficulties in arranging funds for site clearance, investment in technical infrastructure, social infrastructure and interest rate support for loans without collateral. Therefore, the key point of the National Housing Fund is capital. Many experts believe that with this Fund, the role of the State needs to change from indirect support to direct investment. The current social housing program mainly relies on capital from private enterprises, while the State only indirectly supports incentives on land, taxes and credit.
While still encouraging private enterprises to participate, the National Housing Fund needs to transform into a model in which the State directly invests and partially owns the housing fund, especially rental housing.
The Fund can invest in building social housing projects in convenient areas with synchronous infrastructure. These apartments will be sold, rented or leased at preferential prices, with priority given to low-income earners and industrial park workers.
The state budget is both “seed capital” and plays a fundamental role, accounting for about 20-30% of the total initial investment capital of the Fund, used for compensation for site clearance and infrastructure investment. According to estimates, to achieve the target of 1 million social housing apartments, about 850,000 billion VND is needed.
In addition, it is necessary to establish a housing savings mechanism, in which workers and businesses contribute a portion of their income to the Fund. Thanks to that, workers can borrow to buy houses at preferential interest rates over a long period.
The change in the role of the State in implementing the National Housing Fund, from indirect support to direct investment, will help solve the disadvantages of the social housing program such as unsynchronized infrastructure investment, lack of interest from businesses, too long time to implement investment procedures and difficulties in creating land funds...
In fact, although it has been shortened, the approval, appraisal and examination process for social housing projects is still more difficult and complicated than that of commercial housing projects. The reason is that social housing enjoys a lot of support from policies.
In conferences on removing difficulties and promoting the real estate market, the Ministry of Construction has recorded many reflections and recommendations from enterprises in the field of social housing development. According to estimates, when a social housing project has an approved construction plan, housing development program and plan and is included in the local land use list, the implementation time from the stage of approving the investment policy to the time of selecting and signing a contract with an investor takes about 300 days. A representative of HUD Corporation said that before the relevant laws were amended, this enterprise spent more than three years to complete procedures for a social housing project.
Need open mechanisms and policies
At the meeting of the National Assembly Standing Committee on the afternoon of April 25 on the draft Resolution on piloting a number of specific mechanisms and policies for social housing development, for projects that do not use public investment capital, the Government proposed allowing provincial People's Committees to approve investment policies and appoint investors without going through bidding. This mechanism is expected to shorten the time by about 200 days compared to current regulations.
Explaining the proposal to abolish bidding, Deputy Minister of Construction Nguyen Van Sinh said that the State has strictly managed profit norms, costs, selling prices and home buyers, therefore, bidding does not bring economic and social efficiency, but only slows down progress.
According to Mr. Nguyen Van Dinh, the construction of the housing fund must be led by the State. The State needs to proactively develop the Fund, from planning, creating land funds to capital sources and procedures. Enterprises participate as contractors. In site clearance, if the State takes the lead in implementing the land acquisition process to carry out projects that serve the community and society, it will receive high consensus from the people whose land is being acquired.
Funding is the key to the effective operation of the National Housing Fund. In Singapore, where 80% of the population lives in apartments managed by the Housing Development Board, the secret lies in the combination of government leadership and effective financing mechanisms.
To raise capital for the National Housing Fund from the financial market, the Government can issue national housing bonds following the Korean model. This type of bond needs to be guaranteed by the Government to increase its attractiveness.
An important factor for the development of the National Housing Fund is transparent management and anti-speculation. To avoid loss and misuse, the Fund needs to be operated with a strict management mechanism and independent supervision. Revenue and expenditure activities, capital allocation and beneficiary lists need to be made public on the electronic information portal; integrated population data needs to be used to review beneficiaries to ensure transparency and target. Blockchain technology (a distributed database system, operating on a block chain mechanism) can be applied to track cash flows and prevent corruption, profiteering and speculation.
Source: https://baolaocai.vn/dap-ung-nhu-cau-nha-o-cho-nguoi-thu-nhap-thap-post401769.html
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