At Resolution No. 01, dated January 5, 2024, the government directed the Ministry of Construction to coordinate with relevant ministries and branches to urge localities to focus on achieving the goal of completing 130,000 social housing units in 2024. However, this target is very challenging to meet.
Immediately after the Prime Minister issued Decision 338 on April 3, 2023, on building one million social housing units for low-income earners and industrial park workers by 2030, ministries, branches, and localities have implemented several solutions to realize this project. However, social housing development faces multiple challenges that need addressing.
Resolution No. 01, dated January 5, 2024, instructs the Ministry of Construction to work with relevant ministries and branches to urge localities to focus on the goal of completing 130,000 social housing units in 2024. Nevertheless, this target seems unattainable.
Recently, Prime Minister Pham Minh Chinh assigned the Ministry of Construction to lead the research and development of a new VND30 trillion credit package for social housing development and appointed the Social Policy Bank to implement it.
According to the Ministry of Construction, some localities have approved multiple projects’ investment proposals in the past but have not paid attention to selecting project investors for implementation. Some social housing projects have been started, but enterprises have not proceeded with construction or are behind schedule.
Mr. Hoang Hai, Director of the Housing and Real Estate Market Development Department of the Ministry of Construction, proposed: “For land funds without an investment proposal, we must establish one and then select the investor. Regarding the 20% land fund in commercial housing projects reserved for social housing construction, if the investor is unwilling to build, the locality should revoke and reallocate the land promptly.”
In addition to legal and procedural obstacles, affordable capital for both investors and homebuyers is another challenge. The VND120 trillion credit program for investors and homebuyers of social housing and worker housing projects and old apartment building renovation and construction has been implemented for a year and a half but has not been effective.
The goal of developing social housing remains challenging.
Although the State Bank has twice lowered the interest rate on the VND120 trillion capital source, the interest rate applied in the first half of 2024 was still 8% per year for investors and 7.5% for homebuyers, with a short preferential period (3 years for investors and 5 years for individual customers). These rates are not attractive to borrowers.
Economist Dr. Can Van Luc said: “We need to increase the attractiveness and marketability of social housing. Many projects are not selling because people do not find them appealing in terms of quality, location, and price. So, how do we make social housing an attractive asset? We must conduct accurate and appropriate surveys and evaluations to determine supply and demand.”
According to economic experts, to achieve the goal of developing social housing by 2030, there is a need for specific mechanisms and solutions to shorten administrative procedures related to project establishment and approval, land allocation and lease, site clearance, and investment construction to support and encourage enterprises to implement construction projects and provide supply to the market.
Recently, Prime Minister Pham Minh Chinh assigned the Ministry of Construction to lead the research and development of a new VND30 trillion credit package for social housing development and appointed the Social Policy Bank to implement it. Enterprises eagerly await the reasonable allocation of this credit package to benefit from it as soon as possible.
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