In 2024, Ho Chi Minh City will have only one social housing project approved for investment and accepted as an investor, which is the Le Thanh - Tan Kien social housing project in Binh Chanh district. That is the information provided by the Ho Chi Minh City Real Estate Association in a recent report on the market in 2024.
However, to obtain the investment certificate, the investor, Le Thanh Company, has pursued the project since 2018. After the investment policy was approved and the groundbreaking date was set for August 2024, the project is still at a standstill because the Binh Chanh District People's Committee has not approved the detailed planning at a scale of 1/500, so it has not been granted a construction permit and has not started construction.
The investor of another project with an area of 27 hectares, with an investment capital of more than VND 2,700 billion in Binh Duong, said that this project includes social housing apartments and townhouses, in which social housing apartments with full amenities for workers in Binh Duong have a price of about VND 700 million/unit. However, to carry out this project, this investor had to pursue legal procedures for 8 years. Of which, the most difficult thing for businesses wanting to build social housing first is the land fund. Another problem is that the land price for social housing projects is still unclear.
Real estate businesses that want to build social housing also reflect a reality that the mechanism for businesses building social housing is to hand over clean land and exempt land use fees. But in reality, it is very difficult to have clean land and even if investors want to replace the State to proactively clear the land, they will then be stuck with procedures according to the process, this "vicious circle" not only prolongs the project implementation time but also causes costs for businesses.
In addition, although the new Land Law and Housing Law require 20% of residential land in commercial housing projects to be reserved for social housing construction, there are no detailed regulations on the mandatory implementation period for investors. Therefore, many investors avoid and prolong the implementation period, leading to a shortage of this product line.
From the above evidence, it can be seen that the social housing segment is still facing too many "bottlenecks" such as land fund, procedures, mechanisms, interest rates and market output, leading to many difficulties in implementation.
Currently, although the implementation procedures have been somewhat "untied", there are still mechanism problems, each locality implements differently, the approval process is complicated and lengthy, discouraging businesses.
Mr. Le Hoang Chau - Chairman of the Ho Chi Minh City Real Estate Association said that there are still too many shortcomings in the development of social housing that businesses are facing. In addition to the above-mentioned problems, Mr. Chau said that the point that does not attract businesses to build social housing is that the Housing Law 2023 has regulations on preferential policies for investors of social housing projects to borrow capital at preferential interest rates; in the case of building social housing for rent, they can borrow capital at lower interest rates and longer loan terms than in the case of building social housing for sale or rent-to-own according to the regulations of the Prime Minister in each period, but the implementation has not yet been effective.
