According to the Ministry of Construction, the whole country has only completed 21,000 social housing units, equivalent to about 16% of the plan for the whole year of 2024. How do you evaluate this number?
- This is not a surprising number and can be explained. The number of completed social housing projects in 2024 has not reached the target set in the project, mainly because these are projects that were implemented in the previous phase, according to the old policy on social housing development (Housing Law 2014 and Decree 100/2015/ND-CP).
The new policies, with many changes that benefit both investors and beneficiaries of social housing policies in the 2023 Housing Law and Decree 100/2024/ND-CP, will only be implemented from August 1, 2024 - in the early stages, so there will be a certain "delay". Social housing projects implemented under the new policies must not start construction until the end of 2025 because the progress of social housing projects by investors usually takes 18-24 months. Some favorable policies for the investment and development of social housing in Hanoi stipulated in the Capital Law will not take effect until January 1, 2025.
Therefore, the target has not been achieved even by 2025.However, the number of newly built social housing units may change from the end of 2025 onwards when policies to support and promote the development of social housing units have become more synchronized.
According to you, what difficulties are businesses facing in developing social housing?
- Currently, there have been major changes in the mechanism and policies for social housing development; access to land funds as well as local capital sources has basically not changed significantly and needs more time.
Regarding land funds, although the Housing Law 2023 requires localities to arrange land funds for social housing development in accordance with housing development plans. However, the arrangement of land funds for social housing development in localities is currently largely dependent on the mandatory 20% land fund in land funds for commercial housing development. Developing land funds for independent social housing development in localities takes time; it is not a story that can be handled immediately when the law comes into effect.
Regarding credit, both investors and social housing buyers currently depend on the VND120,000 billion credit package. This is a preferential loan package not from the state budget but from capital from commercial banks, disbursed over a long period of time and the interest rate is not really preferential (only 1.5 - 2% lower per year than the normal loan interest rate), so it has not really supported capital sources for investors and social housing buyers.
With thin profit margins (no more than 10% of total investment) while preferential loans are still difficult to access, implementing project legal procedures still faces many difficulties.
Do you have any recommendations or solutions to increase the supply of social housing in the coming time?
- I think that the competent authority can consider the following issues: First, promote the development of land funds for independent social housing development in localities.
Having clean land funds is an extremely important premise for businesses to be able to soon put projects into construction.
Second, capital for social housing development. This is one of the key factors contributing to the success of the project. In order for credit capital for social housing to be implemented soon, the Government should soon implement a preferential package of 100,000 billion VND for social housing loans from bond capital, applied within 5 years from the issuance of bonds guaranteed by the Government. This will be an important source of capital for investors and people to access social housing.
Third, implementing social housing construction projects for lease using public investment capital. Currently, the development of social housing still depends mainly on private investors. The implementation of social housing projects using the state budget (public investment capital) is still very limited. For example, in Hanoi, in the period from 2015 to August 1, 2024, no social housing project was built using state budget capital. Therefore, the development of social housing for lease and the use of public investment capital is considered one of the factors promoting the development of the supply of this type of product in the coming time.
- Thank you for sharing!
