Social housing does not meet practical needs

Up to now, Thua Thien Hue has approved investment for 9 social housing projects, which have been and are under construction. Of these, 4 independent social housing projects have been approved for investment in the 2010-2014 period with a land area of 4.11 hectares, a total of 1,773 apartments, and a total floor area of 128,336 square meters. Up to now, 1,764/1,773 apartments have been sold and handed over for use.

The independent social housing project has been approved by the Provincial People's Committee for investment in the 2020-2021 period, including the social housing project on the land plot marked XH1 in Area C - My Thuong New Urban Area invested by the Joint Venture of NNP Investment Joint Stock Company - Hanoi CDC Joint Stock Company - Dong Da Housing Development Investment Joint Stock Company; the social housing project on the land plot marked XH6 in Area E - An Van Duong New Urban Area invested by the Joint Venture of Dai Hai - Thuan An - Viet Anh - NNP with a total land area of 11.08 hectares, a total number of 2,900 apartments, and a total floor area of 336,320m2. Currently, procedures for adjusting detailed planning are being implemented.

In addition, there are 3 social housing projects from the land fund of 20% of commercial projects, urban areas with project land area of 6.36ha, total number of apartments 2,758, total floor area of 213,960m2. Currently, procedures related to basic construction and land allocation are being implemented.

According to the Department of Construction, the demand for social housing is currently very high, but the supply is very limited. If in the coming time, all projects expected to call for investment and are undergoing bidding procedures are implemented, it will be able to meet the needs of the people.

Mr. Nguyen Phuoc Buu Hung, Deputy Director of the Department of Construction, said that the results achieved compared to the Housing Development Program of Thua Thien Hue province to 2020 and vision to 2030, accumulated to date, social housing has been developed on about 128,336m2 of floor space compared to the approved Program and Plan for Housing Development of Thua Thien Hue province in the period of 2016-2020 (332,632m2), reaching a rate of 36%. However, the current social housing development policy still has some difficulties and problems, does not meet practical needs, and has not been supplemented, amended and completed effectively.

Currently, the land fund for developing social housing projects for workers in industrial parks (IPs) is mainly concentrated in IPs and is invested and built by enterprises to arrange for workers to rent. Therefore, the rights of project investors are limited when there is only the form of leasing or arranging for workers, so investors are still hesitant and not interested in investing in social housing for workers in IPs. This greatly affects the target of developing social housing for workers according to the housing development program and plan set forth by the province.

In addition, according to the Department of Construction, the bidding procedures for selecting social housing investors according to the provisions of the bidding law and the requirement to have detailed planning when selecting social housing investors cause the time to select investors according to regulations to be extended, so projects are forced to adjust detailed planning to arrange 20% commercial land fund to continue bidding.

The process of selecting investors is still overlapping and inconsistent with the provisions of the law on investment, bidding, and land, leading to overlapping and inconsistent selection of investors, prolonging the time for carrying out construction investment procedures and slowing down the progress of calling for investment and project implementation.

In addition, incentive policies for investors of social housing projects are not attractive enough, not close to reality, not strong enough to attract and encourage investors to reduce selling prices for low-income people, especially preferential credit loan policies for project investors and customers buying and renting social housing.

Specifically, according to regulations, social housing projects must pay all compensation and site clearance money according to the plan approved by competent State agencies into the State budget, increasing the selling price, affecting the capital mobilization progress and project implementation progress.

Project investors must reserve at least 20% of the total floor area of the project for lease. After a minimum period of 5 years from the start of leasing, the project investor is allowed to sell this housing fund to tenants or subjects according to regulations. However, because social housing projects in the province are located far from Hue University and Industrial Parks, the demand for housing rental is very low, affecting the business plans of enterprises in the province because investors cannot recover capital.

In addition, regarding the incentive mechanism for investors in social housing construction projects, it is stipulated that the Provincial People's Committee will support all or part of the investment costs for the construction of technical infrastructure systems within the scope of the social housing construction project; in the case of building social housing for rent, the entire cost will be supported. However, up to now, social housing projects have not received support from the province for investment costs for the construction of technical infrastructure systems, increasing the selling price, affecting the progress of capital mobilization and the progress of project implementation.

According to Mr. Nguyen Phuoc Buu Hung, the State has currently issued many mechanisms and preferential policies on social housing investment for low-income people in the form of preferential loans for investors to invest in housing construction; loans for home buyers to buy houses at the Social Policy Banks and many other preferential policies such as the VND 120,000 billion credit package under Resolution No. 33/NQ-CP. The Provincial People's Council also issued Resolution No. 01/2022/NQ-HDND dated January 25, 2022 promulgating regulations on a number of investment support policies in the province.

According to Decision No. 3107/QD-UBND dated December 23, 2022 of the Provincial People's Committee on approving the adjustment of the Provincial Housing Development Program to 2030, the demand for social housing in urban areas by 2025 will be about 135,520m2, equivalent to about 3,872 apartments; by 2030, the floor area will be about 189,000m2, equivalent to about 5,400 apartments. Most of the social housing apartments under the social housing project have been sold out and the investor has handed over the apartments to customers. However, the demand for social housing is still very high.

Source