The implementation of social housing projects has only reached 20.2% of the plan.
Recently, the Hanoi People's Committee has clearly demonstrated its determination to implement social housing projects by issuing a series of decisions, plans, and specific guidelines. However, looking at previous results, it seems that Hanoi's commitments and plans are far from being realized.
According to a report by the Hanoi People's Committee, during the period 2016-2020, the implementation of social housing projects in the city only reached 20.2% of the planned target. This is an extremely modest result compared to the plan approved by the Hanoi People's Committee itself.
| To expedite implementation, the Hanoi People's Committee has decided to assign the Department of Construction to prepare investment proposals for two social housing projects in Tien Duong commune, Dong Anh district. Simultaneously, Hanoi is considering continuing with the remaining three projects in Co Bi commune, Gia Lam district; on plot CT1-5 within the S5 urban planning area (covering Ngoc Hoi, Dai Ang, Lien Ninh communes in Thanh Tri district and Khanh Ha commune in Thuong Tin district); and in Dai Mach commune, Dong Anh district, as a basis for organizing bidding to select investors according to regulations. It is expected that the five completed projects will add approximately 2.5 million square meters of social housing floor space to Hanoi's social housing stock, meeting the city's significant demand (approximately 6.8 million square meters of floor space after 2020) and contributing to achieving the social housing target set in the Plan. |
The Hanoi People's Committee stated that the city was one of the first localities to develop and issue a housing development program and plan in accordance with the Housing Law. However, this is a new and difficult task, especially in the context of the city not yet having issued its own urban development program.
Therefore, the proposed housing development needs of the City are not realistic and do not fully anticipate the challenges and issues that may arise during implementation.
Furthermore, central government policies and laws have not yet promptly regulated or adjusted to address emerging issues. The implementation of concentrated social housing projects has been slow due to bureaucratic obstacles and policies. There are also no specific guidelines on the procedures for bidding to select investors.
Furthermore, the current preferential policy mechanisms have not attracted investors to participate in the development of social housing in suburban areas and social housing for target groups such as workers and students.
"The land fund for social housing development is insufficient because the majority of investors in housing construction projects with a scale of less than 10 hectares choose to pay in cash instead of allocating land or housing units within the project for social housing," the Hanoi People's Committee stated.
Recently, the Hanoi People's Committee continued to approve two new decisions related to the plan for developing social housing in the period 2021 - 2025.
Specifically, in December 2022, the Hanoi People's Committee approved Decision 5063, approving the plan for the development of social housing in the city for the period 2021-2025. In February 2023, the Hanoi People's Committee further issued Decision 1186, approving the housing development plan for the period 2021-2023.
In these two Decisions, the Hanoi People's Committee set a target of developing 1.2 million square meters of social housing by 2025. However, this goal seems relatively far-fetched.
According to the latest report from the Hanoi People's Committee, from the beginning of 2021 to the end of April 2023, Hanoi had 4 more projects completed entirely, and 1 project partially completed, with over 345,000 square meters of social housing floor space, comprising approximately 4,160 apartments.
Thus, despite having completed half the "journey," Hanoi has only achieved one-third of its plan. With more than two years remaining until the end of 2025, Hanoi must complete the remaining two-thirds of the task, meaning it must build 855,000 square meters of social housing to meet the set target. This is a difficult task requiring immense determination from Hanoi.
It takes 500 days to process the necessary procedures before investment approval is granted.
There are many reasons for the slow implementation of social housing projects, but the most concerning reason is the lengthy and complicated administrative procedures for investment.
At a recent seminar on resolving obstacles for social housing, Mr. Nguyen Huu Duong - Chairman of Hoa Binh Group, the company recently approved by the Hanoi People's Committee for the investment policy and investor approval of the Vinh Hung high-rise social housing project in Hoang Mai district - revealed that it took more than 500 days to obtain the investment policy approval for this project.
Mr. Duong recounted that the company owns two plots of land in Hoang Mai district (Hanoi). If these two plots were developed into commercial housing with a construction area of approximately 150,000 square meters, the company would earn a profit of about 2,500 billion VND, if sold at a price of 40-45 million VND per square meter.
Meanwhile, he said that if they built social housing, they would only make a 10% profit, or about over 200 billion VND. "But building social housing will solve the housing problem for many groups: civil servants, public employees, workers, officers, soldiers in the armed forces, and students," Mr. Duong said.
However, regarding the proposal to use these two plots of land for social housing, Mr. Duong stated that submitting applications for investment approval takes more than 500 days for one plot; even though the land already has a land title certificate, a land lease contract, and annual rent is paid in full.
"I believe that the issue of building social housing depends heavily on the will of the city's leaders," Mr. Duong said.
In the coming period, Mr. Duong suggested that the People's Committees of provinces and cities expand the eligibility criteria for purchasing social housing, allowing people who meet the criteria to register.
"According to calculations, at least 20 million people are in need of social housing. The social housing market will always have demand for the next 20-30 years," Mr. Nguyen Huu Duong emphasized.
Even the head of the Hanoi Department of Construction has spoken out about the need to shorten administrative procedures for social housing investment.
Mr. Bui Tien Thanh, Head of the Urban Development Department of the Hanoi Department of Construction, offered three suggestions to accelerate the progress of housing projects in general, and social housing projects in particular.
Firstly, the administrative procedures for investing in social housing must be shortened. If a bidding process is required to select an investor for a social housing project, separate regulations are needed; currently, it takes two years. This is far too long for a simple investor selection procedure.
Secondly, according to Mr. Thanh, it is necessary to review and abolish unnecessary administrative procedures. This is because for social housing projects, businesses are only allowed a maximum profit of 10%, unlike other commercial projects.
Thirdly, in recent implementation, businesses have encountered difficulties regarding the availability of public land scattered haphazardly within the boundaries of housing and social housing projects.
"Public land located within the project boundaries is very difficult to reclaim and allocate, meaning that the land clearance procedures need specific regulations to expedite project implementation," Mr. Thanh said.
Viet Vu
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