Unlocking the housing crisis: Hopes for resolving the ‘thirst’ for social housing

Provinces plan to build social houses simultaneously

108 registered projects – a number mentioned in the report sent by the Ministry of Construction to the Prime Minister about the number of completed social housing projects registered by localities in 2024. If completed as planned, these projects will provide more than 47,500 social housing units for the market.

Specifically, according to the Ministry of Construction, Hanoi has registered 3 projects with nearly 1,200 apartments, Ho Chi Minh City has registered 6 projects with a scale of nearly 3,800 apartments.

The top three provinces in the country in terms of the target to complete social housing in 2024 are Bac Ninh, Binh Duong, and Hai Phong. Bac Ninh has the highest number of registrations with 5 projects, totaling 6,000 units. The second is Binh Duong with 20 projects, totaling 4,500 units. Hai Phong ranks third with nearly 4,000 units from 8 projects.

Many localities also set targets to complete over a thousand apartments this year, such as Quang Ninh, Bac Giang, Phu Tho, Ha Nam, Da Nang, Binh Dinh, Dak Lak, Can Tho, An Giang, …

Law facilitates, provinces join the effort, expecting to solve the “housing shortage” for social housing. (Photo: Hoang Ha)

Most recently, the People’s Committee of Lao Cai Province and the Management Board of Lao Cai Economic Zone have approved investor selection for 2 social housing projects in Bac Lenh Ward and Van Hoa Commune, Lao Cai City, with a total investment of nearly VND 3,000 billion. When completed, these two projects will provide approximately 2,900 apartments; meet the housing needs for more than 7,450 people.

This year, Ninh Binh province strives to complete about 271,800 m2, including about 197,351 m2 of completed floor area from ongoing social housing projects, and 74,450 m2 of completed floor area from social housing projects calling for investment and new development.

Implementing the Scheme “Investment in the construction of at least 1 million social housing units for low-income people, workers in industrial zones in the period 2021-2030”, Thua Thien – Hue province strives to complete about 8,011 units by 2030.

Specifically, about 3,591 units will be completed in the period 2021-2025, and about 4,600 units will be completed in the period 2025-2030. In addition, the province is also calling for investment in 5 social housing projects, covering an area of 44.57 hectares, with 6,293 apartments.

Will the law make social housing accelerate?

According to Nguyen Hoang Nam, CEO of G-Home Corporation, in November 2023, the National Assembly passed the Amended Housing Law, which includes breakthrough provisions for people when buying, renting, and rent-to-own social housing.

For example, Point a Clause 1 Article 78 of the law stipulates that home buyers only need to “not own a house in the province, centrally-run city where the construction investment project is located” to be removed for state management agencies during the verification of documents.

Or, at Point b Clause 1 Article 78, it is stipulated that “to be able to buy, rent-to-own social housing, it is necessary to meet the income conditions as prescribed by the Government”. This provision is also more flexible than the current scheme, which limits to people who do not pay personal income tax, which will lead to the situation where people who have accumulated funds cannot buy houses, and those who can buy houses do not have enough accumulated funds.

Sharing with reporters, a leader of a social housing company also assessed that the new Amended Housing Law has legalized the provision on the selection of social housing project investors. This will help provinces and cities unify and feel reassured in implementation. At the same time, the law also extends more incentives to social housing project investors, especially in terms of taxes.

In addition, social housing project investors are allowed to use 20% of the land fund to invest in commercial, service, and trading works, commercial housing, which is accounted for separately, not included in the cost and profit of social housing. Investors will calculate correctly and sufficiently all reasonable and valid costs when determining selling prices, rental prices, rent-to-own prices, etc.

“However, it takes from 3 to 5 years, even longer, to complete a social housing project. Therefore, it is urgent and requires resolute direction to achieve the target of the 1 million social housing units plan.

In order to meet the loan needs for both buyers and investors, the government should establish a preferential lending fund. The State Bank of Social Policies, state commercial banks can be designated to offer specific annual limits for preferential lending in terms of interest rates and loan terms,” the leader proposed.

Nguyen Le