Proposal to pilot the Vietnam General Confederation of Labor as the investor of social housing

Some opinions at the Law Committee said that it should not be immediately stipulated that the Vietnam General Confederation of Labor is the investor of social housing projects, but only piloted for a certain period of time.

This proposal was stated in the report on receiving, explaining and revising the draft Law on Housing (amended) of the Law Committee, dated August 24.

In previous presentations, the Government proposed that the Vietnam General Confederation of Labor be the investor in social housing and workers' accommodation. However, there are currently many different opinions on this proposal.

On August 3, the General Confederation proposed that they only implement the housing project as the managing agency, not directly as the project investor. This social housing project is only for rent, not for sale, and uses union finance as capital for implementation and investment. Rental housing is managed and operated like state-invested housing.

The Law Committee said that some opinions agreed with this proposal of the General Confederation, because they believed that it would supplement investment resources for social housing projects, contributing to improving and enhancing the quality of life for workers and low-income people. However, because these are worker housing projects for rent, with large investment capital but long payback period, it is necessary to supplement the assessment of the impact on investment resources and the ability to recover capital.

Some opinions suggest that the General Confederation of Labor should not be stipulated as the investor of social housing projects and worker accommodation in the draft Law on Housing (amended). This is because the impact on resources has not been carefully assessed, which may give rise to many problems related to project implementation efficiency and capital preservation ability.

On the other hand, with the mechanism proposed by the Vietnam General Confederation of Labor (capital source is trade union finance, only implementing social housing projects for rent, slow capital recovery), there will not be enough resources to achieve the goal of having all industrial parks and export processing zones have trade union institutions by 2030.

Since this is a new issue, many contents have not been clarified and are not "mature" enough to be regulated in the Law, it is recommended that the Vietnam General Confederation of Labor develop a project to report to the National Assembly for consideration of a limited-term pilot of investment in social housing projects. After the pilot period, this policy will be effective before being regulated in the Law.

A social housing area in Binh Duong. Photo: Quynh Tran — A social housing area in Binh Duong. Photo: *Quynh Tran*

Currently, the 2014 Housing Law does not allow the Vietnam General Confederation of Labor to invest in social housing in general and housing for workers in industrial parks. However, this is an organization with financial resources, having implemented housing projects in trade union institutional areas in a number of localities. Therefore, in the drafts of the Housing Law (amended) submitted previously, the Government proposed that this agency pilot social housing investment.

According to the General Confederation of Labor, there are currently about 1.2 million workers in need of housing. Two years ago, the agency also proposed to the Government to participate in building social housing.

Regarding the responsibility of commercial project investors in developing social housing, the Standing Committee of the Law Committee proposed two options.

Option 1 , keeping the current regulations and also chosen by the majority of opinions at the appraisal agency. That is, investors doing commercial projects in special urban areas, types I, II and III will have to reserve land in the project for social housing, or use land in other locations, or contribute money. The Government will specify this issue in detail to suit the socio-economic development requirements of each locality and each stage. For normal urban areas, the provincial People's Committee will set criteria for investors.

Option 2 , keeping the draft Law submitted by the Government, is that the investor is not responsible for building social housing, but the Provincial People's Committee is responsible. This is the option proposed by the Ministry of Construction - the drafting agency.

Also according to the report of the Law Committee, this agency said that after revision, the draft Law on Housing (amended) removed the regulation that training facilities, training, and management and operation of apartment buildings are conditional business lines.

Because the draft law submitted by the Government does not propose this as a conditional investment and business sector, it does not propose to amend the Investment Law to add it as "conditional". Removing this provision, according to the review agency, will ensure consistency with the Investment Law, simplify procedures, and facilitate investment and business.

This afternoon, the National Assembly Standing Committee is expected to hold its 25th session to discuss differences in the draft Law on Housing (amended).

Mr. Minh

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