Building social housing is not profitable, the procedures are very complicated, and there are no incentives, so it has not been attractive to businesses for a long time. However, when "committing" to building social housing, when it comes time to launch the product, it is not easy because it involves reviewing the subjects, and only those who meet the conditions can buy.
Not attractive to business
Having participated in social housing for many years, Mr. Le Huu Nghia, General Director of Le Thanh Production and Trading Company Limited, emphasized that making social housing for sale is difficult, making social housing for rent is even more difficult. The first difficulty is capital and profit. Specifically, if not able to borrow with preferential interest rates, the enterprise making the project of 1,000 social housing units for rent with an investment capital of VND500 billion will lose at least 10%-15% each year. Therefore, without a support mechanism, the enterprise will never be able to do it. "For a long time, Le Thanh has been able to make social housing for rent because it has to solve the problem of payment methods for buyers and the enterprise bears the loan interest on behalf of customers" - Mr. Nghia said.
A social housing project in Ho Chi Minh City. Photo: TAN THANH
Regarding the shortage of social housing supply, according to Mr. Nghia, this is a difficult problem to solve. Because the profit margin for social housing is already low, it will soon be narrowed to only 10%, so it does not encourage businesses to participate in investment. In particular, the procedural process is a nightmare for businesses. Therefore, the state needs to be flexible, must combine the process to work in parallel for businesses to speed up project progress, thereby increasing supply to the market. In addition, it is necessary to accept the social housing market, that is, to let buyers after a period of time sell them as normal houses. Only then can investors and social housing buyers be attracted. "In other countries, we only need to consider people without houses to buy social housing once, and do not care about other issues. While we are still too detailed and not open to businesses" - Mr. Nghia emphasized.
Also a company directly involved in social housing for many years, Mr. Le Nguyen Minh Quang, Director of Nam Long ADC Apartment Development Joint Stock Company, said that the process of implementing a social housing project of the company encountered many difficulties. The cost of input materials and labor costs continuously increased, pushing up the price of social housing, causing great pressure on the company. In particular, legal procedures and policy regulations are still very complicated, the lengthy settlement process takes a lot of time and also increases costs. Not to mention, the lack of clean land for social housing has long been a difficult problem in urban areas.
In addition, another difficult problem that most real estate enterprises encounter when implementing projects is the difficulty in accessing preferential loans. It is not easy for people to borrow to rent/buy social housing. Meanwhile, some people are hesitant to buy social housing due to concerns about quality, living environment and accompanying services.
Need to be more drastic with the new mechanism
According to Mr. Le Hoang Chau, Chairman of the Ho Chi Minh City Real Estate Association (HoREA), the procedures for social housing have long been complicated and more difficult than commercial housing. That is why in the 2016 - 2020 period, Ho Chi Minh City was only able to build about 15,000 - 16,000 social housing units, reaching 41% of the national target, or an average of 3,000 units/year, which is not enough to meet the huge demand of society. Nationwide, in the 2021 - 2023 period, only 72 social housing projects with 38,128 apartments have been completed, reaching less than 9% of the 2021 - 2025 five-year plan of 446,000 units. Ho Chi Minh City has only completed and put into use 2 social housing projects with 623 apartments and has started 7 social housing projects with 4,996 apartments, but due to "legal problems", construction has almost not been able to be implemented. "We have proposed many solutions to remove difficulties and promote the implementation of social housing projects for Ho Chi Minh City. Among them, there are solutions on investment policy approval procedures; the Ministry of Construction directs the Department of Construction of localities to appraise and approve detailed planning at a scale of 1/500 of social housing projects, including commercial housing projects that have been approved for investment policy; at the same time, approving investors according to the provisions of Point b, Clause 3, Article 6 of Resolution 98/2023/QH15 of the National Assembly" - Mr. Chau said.
Not to mention, over the years, HoREA has sent many documents to the Government, ministries and branches to remove difficulties for social housing, including the content "requesting the Prime Minister to consider directing the State Bank to allow credit institutions designated by the State to provide preferential loans to buy or hire-purchase social housing".
Meanwhile, Mr. Bui Van Son, Deputy Director of the Social Policy Bank, Ho Chi Minh City Branch, said that the scarcity of social housing from 2020 to now, one of the reasons that can be mentioned is that there is no policy for investors to borrow preferential loans to build social housing. Therefore, in the past, the unit has only focused on lending to buy and hire-purchase social housing. According to Mr. Son, the bank is willing to lend up to 80% of the house value with preferential interest rates if the right subject.
The Government , ministries, branches and localities must focus on improving construction processes and legal procedures, closely cooperating with enterprises to reduce the burden of legal procedures as well as supporting in finding and developing land funds for social housing projects.
At the same time, provide financial support policies and measures, such as providing preferential loans, tax reductions or creating special support funds for enterprises. "Encourage enterprises to innovate technology, research and develop technology, reduce costs and increase efficiency in the process of building and managing social housing" - Mr. Son emphasized.
Continue to remove obstacles
Mr. Mai Thanh Tung - Deputy Head of the Department of Housing Development and Real Estate Market, Ho Chi Minh City Department of Construction - said that in the past time, the department has made great efforts to remove obstacles and difficulties for enterprises doing social housing, but the results are still limited due to many complicated problems, solving one problem leads to another problem.
According to Mr. Tung, in the near future, Ho Chi Minh City will continue to remove obstacles in social housing to increase supply to the market, meeting the huge demand for housing for people and society. In particular, the city will focus on planning land plots, areas near industrial parks and export processing zones, and concentrate on 4 large unused land funds of the city.
Regarding capital, the Ho Chi Minh City People's Council issued Resolution 09/2023 stating that the State Financial Investment Company (HFIC) will fully support interest rates for social housing and workers' housing. The Department of Planning and Investment and other departments and branches are implementing this issue.
Source: https://nld.com.vn/nha-o-xa-hoi-kho-lam-kho-ban-196240520203056604.htm
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