Initial Steps Toward Universal Housing Policy

10:18:05 AM | 3/15/2024

The project “Investment in a minimum of 1 million social housing units for low-income industrial park workers for the period 2021-2030” represents a pioneering step toward a comprehensive housing policy. This was emphasized by Deputy Prime Minister Tran Hong Ha at the recent National Online Conference on the implementation of this project.

Local representatives proposed streamlining the investor selection process for social housing, standardizing loan conditions, detailing state-funded items, and exploring more incentives to boost rental housing development, particularly for workers

Unifying criteria and conditions, simplifying procedures

Minister of Construction Nguyen Thanh Nghi said that Vietnam has carried out 499 social housing projects with more than 411,000 apartments since 2021. Currently, 28 localities have announced a list of 68 projects eligible for loans under the VND120 trillion credit program, seeking to borrow more than VND30 trillion. Six social housing projects in five localities were disbursed VND415 billion.

According to the project, by 2030, localities will complete more than 1.06 million apartments, including 428,000 apartments in 2021-2025. However, the project implementation is facing numerous difficulties and limitations like slower-than-planned progress in many localities, slow disbursement of the VND120 trillion preferential credit package, and hard access to land, construction and investment procedures, credit and preferential policies by investors of social housing and worker housing projects.

In 2024, Resolution 01/NQ-CP of the Government on main tasks and solutions for implementation of the socioeconomic development plan and State budget estimation for 2024 requires accelerating social housing and worker housing development, aiming to complete 130,000 apartments in 2024.

Expressing their opinions at the meeting, many business representatives proposed simplifying and reducing investment procedures for social housing projects, especially those relating to detailed project planning (can be implemented together with zoning planning); determining land use fees, land rents and exempted amounts; admitting buyers of social housing; improving the quality of social housing; and mandating localities to arrange and recover land for social housing construction.

Representatives from Hoang Quan Group and Viglacera Corporation said that the maximum profit margin for social housing construction is 10% but social amenities, such as tunnels, public works and parking lots are still required. Therefore, they suggested adjusting and rebalancing the investment capital rate for social housing construction (currently 25% lower than the investment capital rate for commercial housing) to be equivalent to the investment capital rate for commercial housing.

In addition, local representatives from Hanoi, Ho Chi Minh City, Da Nang, Dong Nai and other localities proposed simplifying and reducing the process and time of selecting investors of social housing; unifying conditions for accessing preferential loans under the VND120 trillion credit package; specifying the list of State-funded items and technical infrastructure works in social housing areas to attract more investors; researching and regulating more preferential policies to boost social housing development for rent (especially housing for workers).

Social housing must be placed in the 'common picture' of urban and rural planning

Delivering a concluding remark to the conference, Deputy Prime Minister Tran Hong Ha said that the Ministry of Construction together with other ministries, agencies and localities, have recently participated very closely and drastically to remove policy difficulties and obstacles in a fundamental, methodical and serious way.

"The project implementation is an initial pilot step to figure out setbacks and draw lessons in carrying out housing policies for all people in urban and rural areas. This is a political task of engaging the political system, people and businesses to help ensure security, prosperity and happiness for the people," he emphasized.

Listening to and praising opinions at the conference, Deputy Prime Minister Ha said that many setbacks have been resolved in the 2024 Land Law and the 2023 Housing Law recently passed by the National Assembly. The Ministry of Construction along with other ministries and agencies needs to review and coordinate closely together to tackle them while urgently building and bringing new contents of land and housing laws to life.

"Work must be very detailed and specific, for example determining who can buy or rent social housing, investment procedures, access to preferential loans," he added.

Regarding hard access to land fund for social housing development, Deputy Prime Minister Ha said that it is necessary to simplify the criteria to determine who can buy social housing: For example, they do not have any house in the area where they live, they have not yet been able to buy social housing or they have a job with stable income. At the same time, tenants in industrial parks will be added to the list of subjects that can rent and buy social housing as dormitories for workers.

This is an important basis for ministries, branches, organizations, businesses and other entities to calculate and propose and for localities to synthesize housing needs. Since then, the Ministry of Construction will work with the Ministry of Natural Resources and Environment to include urban and rural development plans for housing needs when industrial parks, educational facilities and medical facilities are built.

"Social housing areas must have sufficient essential infrastructure like transportation, education, healthcare, culture and fire safety in a "broader picture of urban and rural planning", he noted, adding that "The 2024 Land Law does not restrict the use of existing land funds as long as it matches the planning approved by competent authorities to change the using purpose to social housing."

Agreeing with the recommendation that there should be a stable financial source for social housing development, Ha noted that, in addition to State-funded resources, it is necessary to mobilize non-state investment resources for this purpose.

Accordingly, along with encouraging and facilitating commercial banks to launch the VND120 trillion preferential credit package, it is necessary to research and propose long-term fiscal policies and establish a support fund; support businesses to build social housing and buyers of social housing; ensure harmony between social policy and market principles.

Deputy Prime Minister Ha assigned the Ministry of Construction, the State Bank of Vietnam, the Ministry of Finance, and the Ministry of Natural Resources and Environment to research plans and solutions to facilitate and support banks to carry out the VND120 trillion preferential credit package for social housing according to market mechanism; allow businesses to mortgage assets built on land for credit loans; and establish social housing funds.

He assigned the Ministry of Construction to classify and, together with relevant agencies, review groups of matters that have been resolved with newly issued legal documents and groups of matters that need to be worked on to be resolved.

He asked businesses not only to reflect on shortcomings and problems but also actively put forth recommendations, solutions and initiatives to bring social housing policies into real life and achieve the project's goals to enable housing access for all.

Source: Vietnam Business Forum