Affordable housing shortage
Nguyen Thi Toan and her husband said: “My husband and I have a total income of about 18 million VND/month, so we can rent a 20m2 room with a mezzanine for 1.3 million VND/month, not including electricity and water bills. However, the room we rent is becoming cramped when our two children are at the age of eating and growing up. After working as workers for 10 years in Ho Chi Minh City, my husband and I have saved about 100 million VND. The current lowest price for social housing is 1 billion VND/unit, the loan cannot exceed 500 million VND/unit, and we don't know how to manage the rest. If social housing is rented at a cheap price, we would be very happy.”
“In addition to building social housing, Ho Chi Minh City should focus on developing social housing for rent and have real incentive policies to encourage private enterprises to invest in social housing. In addition, state management agencies should allow enterprises to invest in rental housing projects to have more quality housing, rooms with many amenities, safety for workers and encourage landlords to upgrade their housing to be better.”
Mr. Le Hoang Chau - Chairman of HoREA
According to the Ho Chi Minh City Industrial Zone Enterprises Association, Ho Chi Minh City currently has 17 export processing zones, industrial zones and high-tech zones with about 350,000 workers but lacks accommodation. Therefore, Ho Chi Minh City really needs to build more accommodation for workers. According to statistics, Ho Chi Minh City currently has more than 60 boarding houses for households and individuals with more than 560,210 rooms, providing accommodation for about 1.4 million people. Many people own dozens of boarding houses but due to difficulties in obtaining construction and repair permits, they do not renovate their boarding houses. If the owners plan to rebuild spacious boarding houses, the local government should create favorable conditions.
According to Mr. Le Huu Nghia - Director of Le Thanh Company, to develop social housing in Ho Chi Minh City, it is necessary to "untie" the legality. Although the Law has stipulated 100% exemption of land use fees for social housing projects, it takes a long time to complete the procedures. Not to mention, enterprises pay money to buy land at market prices but land use fees are refunded according to the State's land price list. In fact, Le Thanh Company has spent 3 years but still cannot complete the investment procedures for a social housing project. Therefore, the Company hopes that the state management agency will combine the procedures and do it all at once, and at the same time clearly state the time to process the documents so that enterprises can soon implement the project.
Build more social housing for rent
Mr. Le Hoang Chau - Chairman of the Ho Chi Minh City Real Estate Association (HoREA) said that in Ho Chi Minh City, the locality wants to assign businesses to build accommodation and low-cost housing for low-income people, but the implementation is stuck at the land acquisition stage because the State's land price is much lower than the market price, and the people whose land is acquired do not accept it. This issue has lasted for many years but has not been resolved. "Currently, a real estate group has a land fund in Ho Chi Minh City suitable for building social housing. However, in order to build a social housing project, the group recommends that the locality soon identify the land fund managed by the State to assign or invite investment to implement the project" - Mr. Chau said.
According to economist Tran Nguyen Dan, currently, some large cities such as Ho Chi Minh City have expensive real estate prices that are not suitable for building social housing, because if social housing is built to sell at a price of about 500 million VND/unit, the investor will lose money, and if it is sold at a price of 1 - 1.5 billion VND/unit, low-income people cannot afford to buy it. Faced with this problem, Ho Chi Minh City should develop a social housing model for long-term lease of 10 years or more, with rent not exceeding 10% of a household's income. Leasing also avoids speculation.
Sharing the same view, economist Le Chi Nhan also said that the construction of social housing and affordable housing is always a challenge in large cities like Ho Chi Minh City. The beneficiaries of these types of housing are those with limited income and average living standards. To solve these increasingly big challenges, there have been many solutions with the participation of stakeholders in the public and private sectors. Currently, real estate businesses have also shown their goodwill to join hands with local authorities to develop social housing and affordable housing to serve the majority of people.
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