Affordable Housing Development: Falling Short of the 130,000 Unit Target for 2024

(Illustrative image. Source: VNA)

On December 14, the Ministry of Construction announced that according to the project “Investing in the construction of at least 1 million social housing units for low-income earners and industrial park workers,” the country aimed to complete 130,000 units in 2024. However, this target was not met.

Earlier, on February 22, 2024, Deputy Prime Minister Tran Hong Ha chaired a conference on the deployment of the project and assigned social housing targets for this year to each locality. The local authorities were urged to promptly establish plans and initiate specific actions to invest in social housing projects in their respective areas, ensuring the nationwide completion of 130,000 social housing units as directed by the Government.

The Ministry of Construction has been actively coordinating with the Government Office to organize conferences to address challenges and promote social housing development. These conferences were chaired by the Prime Minister on March 16 and May 17, 2024. The Ministry also requested the Ministry of Public Security and the Ministry of National Defense to each construct 5,000 social housing units for armed forces personnel. Additionally, they collaborated with the State Bank of Vietnam and the Vietnam Bank for Social Policies to work with the Hanoi People’s Committee to promote social housing development in the city.

Despite these efforts and the implementation of solutions to overcome obstacles, the Ministry of Construction acknowledged that the target of completing 130,000 social housing units this year would not be achieved due to various challenges encountered during the execution of the project across different localities.

As of December 14, 2024, regarding the support fund of 120,000 billion VND according to the Government’s Resolution No. 33/NQ-CP on solutions to unblock and promote the healthy, sustainable development of the real estate market – only 36 out of 63 Provincial People’s Committees have published documents announcing eligible projects for preferential loans on their electronic information portals (including 16 projects that have signed credit contracts under the 120,000 billion VND program with a total committed credit level of 4,200 billion VND and an outstanding balance of 1,727 billion VND).

In addition to these challenges, the construction industry is facing other difficulties and constraints. While the industry’s growth in 2024 was a key driver for the overall economic expansion, it heavily relied on the recovery of the real estate market and the progress made in addressing bottlenecks and implementing public investment projects. There have been delays in the implementation of the program for developing normative legal documents and the ministry’s projects, with some tasks being postponed or withdrawn from the program. The system of norms, unit prices, standards, and norms is also lagging and failing to keep up with technological advancements and practical requirements.

Furthermore, there are issues with the timely completion of project appraisals, designs, and estimates, and limitations in inspection, supervision, and control of construction investment and management of planning and architecture. The process of adjusting local construction planning in some areas lacks rigor, and urban management in certain places is not yet professional. There is also a need to better utilize and exploit the resources of the cities themselves and to attract more social resources for urban development.

“While the real estate market has shown positive signals, it still faces many limitations and obstacles. Enterprises, especially those in the construction materials and real estate sectors, continue to face challenges and struggle with cash flow shortages and losses,” emphasized the report from the Ministry of Construction.

Hung Vo

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