Troubleshooting housing projects

Removing the regulation requiring enterprises investing in commercial housing projects to reserve 20% of their land fund for investment in social housing construction not only creates favorable conditions for investors to quickly and conveniently implement projects, but can also accelerate the goal of developing social housing for localities.

The draft Law on Housing (amended) has removed this provision.

The Ministry of Construction has just issued a document responding to the petition of voters in Thai Nguyen province regarding investment projects to build commercial housing and urban areas with a land use scale of 2 hectares or more in special and type I urban areas or 5 hectares or more in type II and type III urban areas must reserve 20% of the total residential land area in detailed planning projects approved by competent authorities, and have invested in building technical infrastructure systems for social housing construction.

According to voters, based on this regulation, when making detailed plans for a number of projects in the area, the locality must arrange land funds for the construction of social housing. However, through actual surveys, it is shown that the demand for social housing of people in urban areas (belonging to the province) is still low, a part of the people do not have the conditions to buy or rent social housing, leading to waste of land, difficulties in managing the land funds allocated for the construction of social housing. Therefore, voters propose to study and submit to the Government to amend the content of Decree No. 49/2021/ND-CP dated April 1, 2021 in the direction of flexibility in the arrangement of land funds for the construction of social housing in accordance with the actual situation in localities.

Social housing project for workers to rent with a scale of 1,040 apartments in Thanh My Loi ward, Thu Duc city, Ho Chi Minh city. Photo: QUOC ANH

Regarding this issue, the Ministry of Construction said that recently, the Ministry has researched and assessed a number of shortcomings and inadequacies in the implementation of social housing development policies, including the regulation on reserving 20% ​​of land fund for social housing development according to Article 5 of Decree No. 100/2015/ND-CP dated October 20, 2015 of the Government, as a basis for research, development and submission to the Government for promulgation of Decree No. 49/2021/ND-CP amending and supplementing a number of articles of Decree No. 100/2015/ND-CP, in order to overcome a number of shortcomings and inadequacies of this regulation.

In addition to the existing problems and difficulties in the regulations that have been amended and supplemented in the Decree under the authority of the Government, to completely overcome the above problems and shortcomings, it is also necessary to amend the Housing Law (under the authority of the National Assembly ).

Currently, the draft Law on Housing (amended) has been submitted by the Government to the 15th National Assembly for comments at the 5th session and is expected to be approved at the 6th session. Accordingly, Article 80 of the Draft Law on Housing (amended) stipulates that land for social housing construction has been removed from the regulation requiring investors of commercial housing and urban area construction projects to reserve 20% of land for construction investment; and the provision that the allocation of land for social housing development is the responsibility of the provincial People's Committee. Specifically, when preparing and approving provincial planning, land use planning, construction planning, and urban planning, the provincial People's Committee must allocate sufficient land for social housing development according to the approved housing development program and plan.

Can reduce home prices

Mr. Nguyen Hong Luong, Chairman of the Board of Directors of Ho Chi Minh City Social Housing Development Investment Joint Stock Company, said that the previous regulation requiring enterprises implementing commercial housing projects to reserve 20% of land fund for social housing was not suitable for reality. Because the investment and operation management costs for commercial housing, luxury apartments, and even super luxury apartments are much higher than social housing, it is impossible to do both types in one project.

Therefore, it is reasonable that the Draft Housing Law (amended) does not include this provision. Certainly, many investors will choose to pay the state to be proactive in implementing the project. This will also be the basis for implementing the project of 1 million social housing units approved by the Government. At that time, the unit price of social housing construction to consumers may decrease to about 20 million VND/m2.

Mr. Le Hoang Chau, Chairman of the Ho Chi Minh City Real Estate Association (HoREA), also assessed that the Ministry of Construction's removal of the regulation on reserving 20% ​​of land fund for investment in social housing construction is very reasonable. However, it is necessary to add regulations that investors have the right to choose to build social housing in commercial housing projects, exchange equivalent social housing land fund or pay land use fees to the state from the beginning to be able to proactively implement the project. From there, local authorities and functional agencies will not be confused when licensing and inspecting the project. If this option is left to the state, project implementation will continue to be blocked and difficult as it has been for a long time.

In fact, only a few mid-range urban area projects have been chosen by investors to build social housing, specifically Nam Long Investment Corporation, but high-end projects cannot be implemented, so most investors choose to pay the state. With this option, the state has an additional source of revenue from 20% instead of having to pay land use fees as before.

Proposal for concentrated project development

In the report on the implementation of social housing projects in Ho Chi Minh City in the period of 2016-2025 recently announced, the Department of Planning and Architecture of Ho Chi Minh City frankly pointed out that the requirement for all commercial housing investment projects in urban areas from type III and above to reserve 20% of land fund for social housing construction is not suitable for reality and is not feasible because this land fund does not have enough minimum area to invest in an independent social housing block that ensures standards.

On the other hand, if social housing is developed in the form of townhouses in commercial urban area projects (usually in "golden land" locations), it can potentially contain negative and unfair aspects. In the case of low-income people living in social housing apartments in high-end and super high-end commercial housing projects, the cost of building management and operation alone, and other essential services in these projects, are not suitable for their income.

From practical shortcomings, the Department of Planning and Architecture of Ho Chi Minh City proposed that the Ministry of Construction make specific regulations for Ho Chi Minh City as a special urban area with different management requirements compared to many provinces and cities with low urbanization density.

The Department of Planning and Architecture proposed that the Ministry of Construction study allowing an investor with many projects being implemented in the same district to exchange land area to build concentrated social housing into one project to create favorable conditions for investors to do business, exploit and operate smoothly or have other regulations and solutions on investment attraction policies and incentives for investment in social housing to serve workers and low-income people.

In addition, the Department of Planning and Architecture also recommended that the People's Committee of Ho Chi Minh City assign the People's Committees of districts and Thu Duc City, based on the actual conditions, needs and progress of reviewing and adjusting the 1/2000 planning projects in the locality, prepare documents to adjust the 1/2000 planning projects to update social housing projects and commercial housing development projects with social housing arrangements that have been approved by competent authorities for detailed planning into the zoning planning projects and arrange land funds for social housing construction appropriately.

Source: https://nld.com.vn/bat-dong-san/go-roi-cho-cac-du-an-nha-o-20230918213356743.htm