Social housing development needs support from government

Demand for social housing in Vietnam especially in two big cities Hanoi and Ho Chi Minh City is very buoyant, Director of the Housing and Real Estate Market Management Department Nguyen Trong Ninh said at International Real Estate Conference (IREC) 2018 held in Hanoi yesterday

Social housing development needs support from government

Participants at the conference held by VNREA and NRA shared experience of how to develop social housing.

Ninh added from now to 2020, the two cities need one million houses. To satisfy the increasing demand, the government has offered special mechanism. Specifically, social housing investors will enjoy land use tax and low-rate loans.

Moreover, they can reserve 20 percent of the land for social housing to build commercial houses and also enjoying 10 percent profit.

Buyers also enjoy lower price compared to commercial houses thanks to the government’s support. Currently, 86 social housing projects are built nationwide while 134 other projects will be carried out in the future.

Dormitories have provided over 200,000 shelters for students. Immigrant workers have stabilized their lives in 100 social housing projects in industrial zones. The country will continue to build more 72 projects.

However, a representative from the Construction Ministry said that social housing projects are facing hiccups along the way because of land shortage. At present, there is no more vacant lots in downtown for building social houses while infrastructure in far-away lots is not connected.

Worse, state budget can satisfy 30 percent public investment while mechanism for social housing investment isn’t attractive enough for investors.

Social housing expert in South Korea Noh Jae Keuk said his government supports building such houses. The government in South Korea divides people into ten groups of income earners from low to higher. Each group benefits different policies.

Poorest people will pay rent 30 percent lower than market level when living in social houses built by the government while average income earners will enjoy rent 15 percent lower or if they want to buy houses, they will enjoy lower-interest loans.

Similarly, Vichai from Thailand said his government has carried out a housing program by building one million low-cost houses for poor people.

A representative of the Ministry of Construction said that Vietnamese government and Korean government are exchanging the model of cheap social housing.