Land planned for social housing becomes land for building townhouses
According to Thanh Nien 's research, many businesses do not want to reserve 20% of land in commercial housing development projects and urban areas to build social housing, but only want to fulfill their obligations by paying money quickly.
Louis City Hoang Mai project (Hanoi) is required to build social housing.
Perhaps, the real estate business community is no stranger to the process of avoiding building social housing. This "formula" is as follows: the project investor proposes to local authorities, which are departments, branches, and provincial People's Committees; then the locality sends a proposal to the Government, ministries, branches, etc.; finally, they pay money instead of reserving 20% of the land fund to build social housing. Social security for the poor, especially those in large cities, is thus left unanswered.
For example, right in Hanoi, the new urban area project Hoang Van Thu, Hoang Mai District (Louis City Hoang Mai) at 54 Tan Mai (Hoang Mai District) invested by Hoang Mai Urban Development Investment Joint Stock Company (abbreviated as Hoang Mai Company) has an area of over 22 hectares, which is subject to the requirement of reserving 20% of the land fund for social housing development. However, by early May, this project still had no social housing projects implemented.
According to research, from April to June 2020, Hoang Mai Company proposed to fulfill its obligation to develop social housing at the Louis City Hoang Mai project by paying money.
After receiving comments from the Hanoi Department of Planning and Investment, in August 2020, the Hanoi People's Committee issued a document signed by Vice Chairman Nguyen Quoc Hung reporting to the Prime Minister to allow the investor of the Louis City Hoang Mai project to fulfill its obligation to develop social housing by paying money.
The document stated that, according to the detailed planning 1/500 approved by Hanoi People's Committee on In July 2007, the project had to hand over to the city more than 22,000 m2 of land in 12 plots with symbols: LK5, LK7, LK17, LK20, LK21, LK22, LK35, LK36, LK37, LK38, LK39, LK40 with areas ranging from 879 m2 - 3,482 m2 to develop social housing after investing in technical infrastructure construction.
No social housing has been built at the Louis City Hoang Mai project even though the initial project approval required 22,000 m2 of land to be used for social housing.
The reason is that the area of the above plots of land is not large, not suitable for building social housing in the form of high-rise apartments, and will increase the population if social housing is developed... Hanoi People's Committee has proposed the Government to allow investors to fulfill their obligations to develop social housing by paying land use fees according to market prices, in accordance with Government regulations and instructions from the Ministry of Finance. The area of the 12 plots of land mentioned above will be built into low-rise townhouses.
"This will not affect the need for social housing development and resettlement housing in the city...", the document of the Hanoi People's Committee stated.
After receiving the report from the Hanoi People's Committee, in August 2020, the Government Office sent a document to the ministries of Construction, Finance, Natural Resources and Environment... requesting opinions on the construction of low-rise townhouses on land planned for social housing development at the Louis City Hoang Mai project and the investor is allowed to fulfill the obligation to develop social housing by paying money.
In September 2020, the Ministry of Construction expressed its opinion that if approved by the Prime Minister, the Hanoi People's Committee needs to base on the city's needs, clearly identify the location and area of land in the area to replace the arrangement for social housing corresponding to the 20% land area at the Louis City Hoang Mai project; at the same time, determine the correct amount of money to be paid in lieu of the obligation to develop social housing at the project according to regulations.
Also in September 2020, the Government issued a document agreeing with the proposal of the Hanoi People's Committee to allow the investor of the Louis City Hoang Mai project to fulfill its obligation to develop social housing by paying money.
Townhouses and villas at Louis City Hoang Mai project cost tens of billions of VND/unit
Urban projects in the suburbs also do not want to build social housing.
In Hanoi, another project not located in the central area that also refused to develop social housing and asked to pay money is the Noble Van Tri urban functional area (Noble Van Tri urban area) in Kim No commune, Dong Anh district.
Specifically, in June 2020, the Ministry of Construction sent a document to the Government Office expressing its opinion on the investor of the Noble Van Tri urban area project, Noble Vietnam Co., Ltd., wanting to fulfill its obligation to develop social housing by paying money instead of allocating 20% of the land fund to build social housing.
"Based on legal regulations and specific conditions of the project, the Ministry of Construction finds that it is possible to consider allowing the project not to allocate 20% of the land fund to build social housing...", the document of the Ministry of Construction stated. At the same time, it is accompanied by some contents: arranging other land funds corresponding to 20% of the land area at the Noble Van Tri urban area project in Dong Anh district; implementing land allocation, land lease, determining land prices to collect land use fees for the area of 20% of the land fund to build social housing at the Noble Van Tri urban area project in accordance with legal regulations...
In its report to the Government on the Project to build at least 1 million social housing apartments, the Ministry of Construction pointed out many reasons why businesses are not interested in developing social housing such as: being controlled by the ceiling interest rate, complicated project implementation procedures, incentives not attractive enough... Therefore, most businesses choose to fulfill their obligation to develop social housing by paying money instead of building houses.
In addition, since the 30,000 billion VND package was fully disbursed, the State has not had any similar support packages, so the social housing market lacks cheap capital to support development. Meanwhile, businesses cannot borrow at commercial interest rates to build social housing.
At the same time, the land fund for social housing development is not much because localities pay little attention, including Hanoi, especially the 20% land fund in commercial housing projects is not prioritized for social housing construction.
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