In early April this year, Deputy Prime Minister Tran Hong Ha signed Decision 338/QD-TTg of the Prime Minister approving 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 2021 - 2030".
The project's goal is to strive for a total of 1,062,200 apartments completed by localities by 2030. Of which, about 428,000 apartments will be completed in the 2021-2025 period and about 634,200 apartments in the 2025-2030 period.
Nationwide, only 46 social housing projects with 20,210 apartments have been completed, reaching 4.7% of the plan. (Photo: VARS).
The project aims to meet the urgent needs of reality - the supply of social housing is seriously lacking, only meeting about 20% of the actual needs of workers. At the same time, it is also a "rescue" solution for real estate businesses in the context of cash flow congestion, market difficulties, potential risks.
In addition, solving the supply of this segment will be the "key" to solving the problem of supply-demand imbalance, contributing to removing difficulties and developing a stable and healthy real estate market.
Over the years, the Party and State have always paid attention to and identified the housing needs of the people, especially low-income earners and workers in industrial zones, as a top priority task. Agencies and the Government have directed and issued many policies to attract businesses to participate in development; promptly resolved problems within their authority to implement policies to achieve goals and requirements. However, in some localities, implementation still has many limitations, affecting the implementation results.
In particular, some difficulties and obstacles in the development of social housing and workers' housing still exist, causing difficulties in the implementation process, making the supply of social housing still "dripping".
Far from the target
After more than 10 years of implementing the National Housing Development Strategy for the 2011-2020 period, the whole country has only completed 307 social housing projects in urban areas with about 157,100 units, reaching only 41.7% of the set plan.
In the 2021-2030 period, the Government approved "Investment in the construction of at least 1 million social housing apartments for low-income earners and industrial park workers in the 2021-2030 period". However, more than half of the 2021-2025 period has passed, and the whole country has only completed 46 social housing projects for low-income earners and industrial park workers with a scale of 20,210 apartments, only 4.7% of the plan.
Social housing is a type of real estate that is always in high demand, can bring immediate cash flow and is a "rescue" solution for businesses. (Photo: VARS).
Although still far from the set target, with the close direction of the State in prioritizing handling and removing procedures, policies, and finances, as well as the proactive coordination of businesses, the speed of social housing development has been more positive, with more and more projects being licensed, implemented, and completed.
Accordingly, if in 2021, the whole country only had 3,046 completed apartments and 2,127 apartments eligible for sale of future housing according to the announcement of the Department of Construction, by 2022, this number had doubled, quadrupled with 6,196 completed apartments and 8,245 apartments eligible for sale of future housing.
At the same time, data from the Ministry of Construction also shows signs that localities have begun to "get involved". If in 2021 and 2022, each year the whole country only had 9 newly licensed projects with a scale of nearly 6,000 apartments, then in the third quarter of 2023 alone, there were 12 projects with a scale of 12,679 apartments approved for investment nationwide.
Expectations from policy "support"
VARS believes that the development of social housing will continue to have more positive results with the "support" from policies. In particular, the recent passage of the Housing Law (amended), with many new regulations "removing difficulties" for buyers and investors developing social housing projects, is expected to create attractiveness, attract more businesses to participate in developing the social housing segment, as well as increase the accessibility of this type of housing for low-income people who are capable and qualified to buy a house.
According to the new Housing Law, investors developing social housing will receive a series of “real” incentives with a flexible mechanism. Specifically, the allocation of 20% of social housing land will be the planning responsibility of each locality.
This regulation not only solves the current problem of land fund for social housing development for investors, but also benefits home buyers because through understanding information about people's needs and future socio-economic development orientation, localities will have housing development policies and allocate truly suitable land funds.
At the same time, investors of social housing projects will be exempted from land use fees and land rent for the entire land area of the project (except for the land area for investment in construction of business, commercial and service facilities, commercial housing, accounting for a maximum of 20% of the total land area in the project) without having to carry out procedures for determining land prices, calculating exempted land use fees and land rents, and procedures for requesting exemption from land use fees and land rents.
Thus, the time for implementing investment procedures for social housing projects will be shortened by about 1 year. In addition, applying profit margins only to the social housing area will help investors gain more profit from developing social housing through the commercial area, which is a plus point, increasing the attractiveness for investors.
In addition, the new Housing Law has been amended and supplemented with very important and practical mechanisms and policies, "removing" difficulties in the process of access for people when buying, renting, or renting-purchasing social housing.
This is also the "point" expected to create a push to promote the disbursement of the 120,000 billion VND credit package, adding hope to people's ability to buy houses, bringing cash flow to businesses, in order to promote the recovery process of the real estate market.
Specifically, the new Housing Law has 3 progressive points, removing difficulties for people, solving the situation of "both excess and shortage".
Firstly, the regulation that home buyers only need to "not own a house in the province or centrally-run city where the construction investment project is located" has removed obstacles for state management agencies in the process of confirming documents.
Second, the income requirements for purchasing or leasing social housing have become more flexible. They are no longer limited to those who do not pay personal income tax as they are now.
Third, the recently passed Housing Law 2023 has abolished the residence condition for subjects eligible to buy or rent-purchase social housing.
Although it will take at least another year for the new regulations in the Housing Law to officially come into effect, these new points have somewhat affected the psychology of home buyers, as well as the development plans and orientations of investors.
Recently, a series of social housing projects have been registered by enterprises with competent authorities for implementation. The Government, agencies, departments and sectors will continue to research and issue Decrees and directives to remove difficulties, obstacles and legal bottlenecks for this type of housing.
VARS believes that in the coming time, developing and promoting the development of the social housing sector will be the key goal of many real estate businesses. There will be more real estate "giants" participating in the social housing race, gradually improving the supply for the market.
Above all, in the context of many real estate projects being stuck in legal issues and having low liquidity, social housing, a type of property that is always in high demand and can bring immediate cash flow, is the "rescue" solution for businesses.
Ngan Giang
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