Many barriers put pressure on businesses
The results of implementing the social housing development targets in Ho Chi Minh City are still limited and have not achieved the desired results.
Accumulated from 2021 to September 2024, the city has only completed 6 projects (5 social housing projects and 1 worker accommodation project) with a scale of 2,745 apartments and is under construction of 4 projects with nearly 3,000 apartments.
Speaking about current barriers, at the seminar “Social Housing: Breakthrough from new policies” held on November 21 in Ho Chi Minh City, Mr. Nguyen Van Hoan - Deputy Head of Housing Development and Real Estate Market Department of Ho Chi Minh City Department of Construction said that social housing investors are having to comply with many legal regulations and go through many complicated procedures from different agencies and units.
For example, currently, the investment policy approval process takes 1-2 years because it requires opinions from 10 related units, leading to a delay in project completion time.
According to feedback from social housing businesses, there are still many major problems that discourage investors.
Mr. Le Huu Nghia, Director of Le Thanh Real Estate Company, said that there are three biggest problems currently.
Firstly, the profit limit of 10% is too low when the procedure lasts for 5 years, the investment phase takes another 2 years. On average, in 7 years, each year the investor only achieves about 1.3-1.5% profit, not enough for reinvestment.
Second, the procedure for applying for social housing is more complicated than for commercial housing.
Third, the post-sale price control, inspection and testing process puts a lot of pressure on businesses. Therefore, many businesses, after implementing a social housing project, do not want to continue implementing other projects.
"Current preferential policies mainly benefit the people, while businesses have to bear all the burden. This shows that the policy is focusing on bringing benefits to the people, but pushing difficulties to businesses. Therefore, it is necessary to adjust policies to attract investors," Mr. Nghia stated his opinion.
Need a breakthrough mechanism
Vice Chairman of the Ho Chi Minh City People's Committee Bui Xuan Cuong said that during the implementation process, Ho Chi Minh City encountered many difficulties in almost all stages, from construction planning, land procedures, determining financial obligations, investment, to determining the selling price of social housing. Land allocation, calling for investment and mobilizing other financial resources to implement the project were also major problems.
Faced with these bottlenecks, Ho Chi Minh City has proposed a series of solutions to remove difficulties and speed up progress.
Regarding planning, Ho Chi Minh City is urgently completing the submission for the Prime Minister to approve the planning for the 2030 period, with a vision to 2050, and at the same time adjust the city's general planning. It is expected that related procedures will be completed in November 2024.
Regarding investment, the process of approving policies and recognizing investors for social housing projects is still complicated, requiring the coordination of many departments and sectors. To solve this problem, Ho Chi Minh City has established a special working group that will focus on solving investment-related issues, shortening the time to process documents and collecting inter-sectoral opinions.
Regarding land, social housing projects are exempted from land use fees, but it is still necessary to accelerate the completion of land allocation procedures and allow the conversion of land use purposes from agricultural land to non-agricultural land to implement the project.
In terms of finance, the city has approved about VND3,700 billion from the budget to invest in social housing in the 2021-2025 period. In addition to the budget, Ho Chi Minh City is also actively calling for domestic and foreign investment, organizing investment promotion conferences and encouraging the application of new technology in construction to reduce costs.
The Ho Chi Minh City People's Committee is also coordinating with the Ho Chi Minh City Labor Federation to promote the construction of social housing, especially rental and hire-purchase housing models, to meet the great needs of workers and laborers.
