Social Housing Bottlenecks Need Addressing
At the workshop “Investing in Social Housing Development: New Context, New Opportunities” on the afternoon of May 27, Mr. Nguyen Van Khoi, Chairman of the Vietnam Real Estate Association, emphasized the importance of social housing in the country’s development strategy for the period of 2025–2045.
According to Mr. Khoi, real estate is one of the “measures” of socio-economic development, and social housing must be a pillar rather than just a slogan.
Mr. Nguyen Van Khoi, Chairman of the Vietnam Real Estate Association. |
However, the current reality shows that the social housing segment still faces many barriers. From 2021 until now, there have only been 679 social housing projects implemented nationwide, with a scale of about 623,051 units, achieving about 48% of the target set for 2025. Localities have not integrated social housing targets into their annual and five-year socio-economic development plans, along with a series of unresolved institutional and policy inconsistencies.
As an example, Mr. Khoi said that the regulation of a 10% profit margin in the context of input material price and labor pressure, legal entanglements, etc., is making many investors wary.
In addition, some provincial-level localities have not allocated budgets for compensation, support, resettlement, site clearance, and the creation of clean land funds for investors…
According to Mr. Khoi, the 2023 Housing Law and Decree 100/2024 have given localities the authority to arrange social housing land funds in three forms: allocating 20% of the area in commercial projects, allocating land in other areas, or paying an amount equivalent to the value of the land fund. However, the unclear conditions for application have confused localities, forcing many investors to apply the first option, causing financial and implementation pressure.
Moreover, the land fund for social housing construction is currently located far from the center, with inadequate infrastructure and inconvenient transportation. There is a lack of specific guidance on procedures and land values for enterprises that own land funds and wish to convert them for social housing development, leading to bottlenecks in implementation.
Regarding administrative procedures, the leader of the Vietnam Real Estate Association said that the procedures related to social housing, from investment policies to construction permits, are still complicated and inconsistent, prolonging project implementation time. In many places, it takes more than two years to complete the site clearance.
Another bottleneck hindering the development of social housing is the lack of capital. Many support credit packages are only short-term and lack sustainability due to the lack of diverse capital sources and the absence of state budget capital. Meanwhile, high commercial interest rates and short loan terms make both investors and homebuyers hesitate.
Not only enterprises but also low-income people find it difficult to access preferential loans due to financial conditions.
“Borrowers are only supported up to 80% of the apartment value, and the rest must be self-funded, which not everyone can meet. Even freelancers face difficulties because there are no local guidelines for income confirmation, causing obstacles in the home-buying process,” emphasized Mr. Khoi.
In addition, there are still cases of “middlemen” in social housing, buying and selling at a premium, causing market chaos and frustration for buyers.
How to Overcome These Challenges?
Ms. Tong Thi Hanh, Director of the Housing and Real Estate Market Management Department, Ministry of Construction, also admitted that the results of the recent project aiming to build 1 million social housing units did not meet expectations and that there were several reasons for this.
Ms. Tong Thi Hanh, Director of the Housing and Real Estate Market Management Department, Ministry of Construction. |
Firstly, in terms of implementation, the Ministry of Construction has been coordinating with localities and enterprises to remove obstacles as much as possible. In addition, there are institutional entanglements, and enterprises implementing social housing projects face more difficulties and complexities than commercial housing projects. Secondly, the procedures for investing in the construction of social housing are complicated and time-consuming. Thirdly, preferential policies and support are difficult for enterprises to access. Fourthly, there are preferential policies for investors in social housing development, but the rental housing fund has not developed.
Ms. Hanh said that the draft National Assembly Resolution on social housing aims to reform and simplify administrative procedures to facilitate enterprises in completing their projects as soon as possible.
Accordingly, the implementation procedure is expected to take a maximum of 75 days, reducing about 200 days, equivalent to about 70% of the implementation time compared to the current regulations. In addition, social housing projects currently have to go through the following procedures: establishing, appraising, and approving the task of detailed planning; establishing, appraising, and approving the detailed planning scheme.
Through the review and synthesis of obstacles from practical implementation, many localities have proposed not performing the step of establishing, appraising, and approving the task of detailed planning but using the land-use criteria and requirements for spatial organization, architecture, and landscape of the area specified in the approved subdivision or master plan, instead of the planning task.
To shorten the time for implementing social housing investment projects, it is necessary to skip the step of establishing, appraising, and approving the task of detailed planning…
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