Removing credit obstacles and legal barriers to develop social housing

Many provinces are slow to implement social housing construction

According to Decision No. 444/QD-TTg of the Prime Minister on assigning targets for completing social housing in 2025 and the following years until 2030 for localities to add to the socio-economic development targets, from 2021 to 2024, the whole country will only complete 66,755 apartments, much lower than the 1,062,200 apartments under the investment project to build at least 1 million social housing apartments for low-income people and industrial park workers in the period of 2021 - 2030.

Major provinces and cities with high demand have completed apartments in a very modest way, including Hanoi 11,334/56,200 apartments, Ho Chi Minh City (2,745/69,700 apartments), Binh Duong (2045/86,900 apartments)... It is worth mentioning that many localities such as Ha Giang, Cao Bang, Lao Cai, Quang Binh, Quang Tri, Quang Nam, Dong Thap, Soc Trang, Vinh Long... have not completed any apartments.

The project is "frozen" due to complicated procedures

A report from the Ho Chi Minh City Real Estate Association (HoREA) shows that in 2024, Ho Chi Minh City will have only one social housing project approved for investment policy, and at the same time accepting the investor, the Le Thanh - Tan Kien social housing project in Binh Chanh district.

To obtain this certificate, the investor, Le Thanh Company, has been pursuing the project since 2018. After the investment policy was accepted and the groundbreaking ceremony took place in August 2024, the project is still inactive. The reason is that even though the investor has bought the land fund himself and has available capital, the investor has encountered difficulties in the procedures.

It is known that up to now, the local level, Binh Chanh district, has not yet approved the detailed planning project to reduce the scale of 1/500. Initially, the enterprise thought that the project had an area of over 2.2 hectares, but after deducting the roadway and corridor to protect canals and ditches, the area suitable for planning was only 1.9 hectares.

According to the law, the project is planned in detail according to a shortened process, the approval of this plan is only a very concise step. However, the district level did not agree, requiring businesses to still prepare documents according to the plan, causing investors to "work very hard" spending many months and money to prepare documents.

But when the documents reached the Department of Planning and Architecture, it was uncertain whether there was any need to follow that complicated process but only to have a shortened process as proposed by the enterprise. After that, the district issued documents to the departments to ask for opinions on the 1/500 planning.

Another project that was expected to be launched in 2024 is the Linh Trung 2 Export Processing Zone Workers' accommodation Project (phase 2) invested by Thien Phat Tourism Service Production and Investment Joint Stock Company, which is still facing difficulties, despite being directed by the Ho Chi Minh City People's Committee to promptly remove obstacles from previous years. Up to now, the project has not been able to complete the procedures to be able to soon start construction in phase 2. The investor has imported many machines to prepare for construction, even made floor beds and apartment doors, but until now they are still "shelved".

According to records in Binh Duong province, there are about 30 commercial housing projects that have been allocated land to build social housing. However, due to market conditions and many problems with land, investment procedures, etc., many projects have not yet been implemented.

Special policies are needed

Sharing with Lao Dong reporter, Mr. Le Hoang Chau - Chairman of Ho Chi Minh City Real Estate Association - said that it is necessary to soon implement many solutions to be able to aim for the goal of building at least 1 million social housing apartments in the period of 2021 - 2030.

"First of all, it is recommended that the National Assembly issue a pilot resolution on specific mechanisms and policies for social housing development, allowing provincial housing management agencies to preside over investment decisions, helping to shorten the process. Propose that local People's Committees need to direct departments and branches to coordinate more closely to shorten the time to implement the licensing process and administrative procedures related to social housing projects. Regarding land funds, the Association recommends that the Prime Minister direct localities to ensure sufficient land funds for social housing development and facilitate investors in receiving land use rights in accordance with the planning" - Mr. Chau proposed.

In addition, the Chairman of HoREA believes that the effective use of capital sources, especially preferential credit sources for investors and social housing buyers and tenants, will be a key solution to remove difficulties and promote social housing development.

"To implement the preferential loan policy under the Housing Law 2023 and Decree 100/2024/ND-CP, it is necessary to consider abolishing Clause 3, Article 77 of Decree 100/2024/ND-CP. This regulation causes legal conflicts when the Social Policy Bank prohibits social housing investors from borrowing preferential loans from August 1, 2024 to December 31, 2030, while other provisions of the Decree allow it. If it continues to be maintained, the bank will not be able to provide preferential loans for 16 consecutive years (2015-2030), reducing the ability of businesses to access capital. The Association also requested the Vietnam Development Bank to soon announce specific terms of loan terms, limits, duration, interest rates and related regulations. Although Decree 100/2024/ND-CP allows social housing investors to borrow from this bank, there are still no detailed instructions, causing difficulties in accessing capital sources" - Mr. Chau emphasized.