Ho Chi Minh City is grappling with the dilemma of allocating 20% ​​of its land for social housing.

The law stipulates that developers of commercial housing projects must allocate 20% of the land or provide other land for social housing, or provide a monetary contribution. However, Ho Chi Minh City is still considering developing criteria for implementation.

The law stipulates that developers of commercial housing projects must allocate 20% of the land or provide other land for social housing, or provide a monetary contribution. However, Ho Chi Minh City is still considering developing criteria for implementation.

After several changes in policies regulating land allocation for social housing development within commercial projects, the 2023 Housing Law stipulates that provincial People's Committees must allocate sufficient land for social housing development according to the needs stated in the housing development program and plan, including: land for independent social housing development; and land for social housing construction within commercial housing projects.

The law also stipulates that the investor of a commercial housing construction project must allocate a portion of the land within the project, or arrange land in another location, or pay an amount equivalent to the value of the land already used to build technical infrastructure, for the construction of social housing…

Decree No. 100/2024 on the development and management of social housing has specified that the area for fulfilling the obligation is 20% of the total land area of ​​the commercial housing project. The decision on one of the three forms above is considered by the Provincial People's Committee.

The 253rd Ho Chi Minh City Business-Government Dialogue Conference was organized by ITPC and the Department of Construction. Photo: Trong Tin.

“Current regulations are much more flexible, especially Decree No. 100/2024, which no longer stipulates that commercial housing projects must allocate land for social housing development,” said Mr. Nguyen Van Doi, General Director of Saigon 9 Company, at the 253rd Dialogue Conference between Businesses and the Ho Chi Minh City Government , organized by ITPC and the Department of Construction on November 15th.

However, he said that commercial housing projects in Ho Chi Minh City are still facing obstacles in allocating land for social housing development.

Mr. Doi said he fully understands that the city is striving to develop criteria to guide businesses in choosing one of three forms of fulfilling their social housing obligations. He and other businesses are also waiting for the City People's Committee to issue these criteria.

At the conference, Mr. Doi proposed a solution: instead of allocating 20% ​​of the land for social housing, businesses would contribute financially. Ho Chi Minh City would then invest in a sufficiently large land fund of 200-300 hectares in suburban areas to implement the project. This is because, based on the recently issued adjusted land price list, the cost of social housing would be very high on some central roads.

According to his calculations, if social housing were built on Dong Khoi Street, District 1 (land price of 763.6 million VND/m2), the cost of social housing would be around 276 - 386 million VND/m2. Or, at the lowest price, on Rung Sac Street, Can Gio District (land price of 20.9 million VND/m2), the price of social housing would still be around 45 - 70 million VND/m2.

“In Thu Duc City, when handing over land for social housing in the Van Phuc City project, the city leaders said that even if they received a small amount of that land, it would just be frozen, creating a bottleneck because social housing development would be impossible. This is because the state-determined land price in this project is 73 million VND, while the market price is over 100 million VND,” he said.

Mr. Nguyen Van Doi, General Director of Saigon 9 Company, made a proposal at the conference. Photo: Trong Tin.

Therefore, according to Mr. Doi, if flexible, Ho Chi Minh City should choose locations where land is still cheap. Businesses are willing to pay the budget for land allocation immediately.

In response, Mr. Huynh Thanh Khiet, Deputy Director of the Ho Chi Minh City Department of Construction, stated that the current issue is whether to exchange land or exchange it for land of equal value in cash, which is a difficult matter and is currently being discussed among various departments.

"For example, when you exchange land from location A to location B, is it an exchange of land value or land area? The two are different, and there's a lot of tension about it right now. The city has recognized the problem and is developing regulations for implementation," Mr. Khiet said.

The majority of businesses requested to be paid in cash.

According to a previous report by the Ho Chi Minh City Real Estate Association (HoREA), since the regulations on the obligation of commercial housing developers to build social housing came into effect, HoREA has observed that many urban and commercial housing projects, some spanning tens or hundreds of hectares, have virtually no social housing units.

Specifically, during the period from July 1, 2015 to March 31, 2021, according to the regulations in Government Decree 100/2015, commercial housing projects with an area of ​​10 hectares or more are required to have social housing built on 20% of the land allocated for residential purposes within that project.

For commercial housing projects with an area of ​​less than 10 hectares, the investor is allowed to build social housing on 20% of the project's residential land, or exchange the social housing land for another location, or pay an amount equivalent to the value of 20% of the commercial housing project's residential land.

However, HoREA noted that most developers requested payment in cash equivalent to the value of the 20% residential land fund, and no cases have been observed where the social housing land fund has been exchanged for another location equivalent to the 20% residential land fund.

From April 1, 2021 to July 31, 2024, according to Government Decree 49/2021, commercial housing projects with an area of ​​2 hectares or more are required to build social housing on 20% of the land allocated for residential purposes within the project. However, HoREA has observed that no commercial housing projects have yet constructed social housing within these projects.

For commercial housing projects with an area of ​​less than 2 hectares, the investor is not required to allocate 20% of the land; they only have to pay land use fees for the entire land area of ​​the project.

Source: https://baodautu.vn/batdongsan/tphcm-can-nao-voi-quy-dat-20-lam-nha-o-xa-hoi-d230158.html