A collective petition to pay money instead of building a house
In many summary reports on housing development programs, the Ministry of Construction said that one of the causes of the social housing crisis is that many localities do not pay attention to allocating land funds to develop this type of housing. Many commercial housing projects in many provinces and cities that are required to allocate 20% of land funds for social housing development, but have sent documents requesting payment instead of building houses for the poor.
Enterprises in many provinces often choose to fulfill their obligation to build social housing by paying money instead of building houses.
For example, according to documents collected by Thanh Nien , in August 2019, the Ministry of Construction received a request for comments on the proposal of the People's Committee of Binh Dinh province not to allocate 20% of land fund for social housing development for commercial housing development projects and urban investment projects in the area.
The Ministry of Construction stated that according to legal regulations, urban development projects and commercial housing projects of 10 hectares or more in urban areas of type 3 or higher must reserve 20% of their land fund for social housing. If Binh Dinh province proposes not to reserve 20% of its land fund for social housing in new urban projects, allowing investors to fulfill their social housing obligations by paying money, it must clarify the need for social housing in the detailed project area; the inappropriateness of the 20% land fund arrangement in each project; the inconsistency with the approved housing development program and plan... and report to the Prime Minister for consideration for each project.
Another example is the Viet Hoa - Thanh Binh urban area project with a scale of 13.5 hectares in Hai Duong City (Hai Duong Province) invested by Quang Giap Group Company Limited. The project was approved for detailed planning in December 2017.
Right from the planning stage, the People's Committee of Hai Duong province and the Standing Committee of the Hai Duong Provincial Party Committee met and agreed not to allocate land area for the construction of social housing in this urban area. When implementing the project, the investor must pay in cash to supplement the province's social housing development fund according to regulations. After that, the People's Committee of Hai Duong province proposed to the Government to allow the implementation of the obligation to develop social housing by paying money.
In June 2020, the Ministry of Construction commented: affirming that according to legal regulations, the project is subject to the requirement to allocate 20% of the land fund for social housing development. The Ministry of Construction found that it is possible to consider allowing the project not to allocate 20% of the land fund for social housing development. The accompanying conditions are to arrange other corresponding land funds in the area; pay enough money for social housing development corresponding to 20% of the land fund in the project; Hai Duong Provincial People's Committee requested investors with social housing land funds in the area to urgently implement projects to ensure meeting local needs.
Similarly, in December 2020, the People's Committee of Quang Nam province also issued a document requesting the Government not to allocate 20% of the social housing land fund in the Northwest model urban area project, with a scale of 76 hectares in Tan Thanh Ward, Tam Ky City (Quang Nam province). According to regulations, 20% of the social housing land fund is more than 5 hectares.
Many projects are allocated land to build social housing but they do not ask to build houses, leading to a housing crisis for ordinary people.
In April 2021, the People's Committee of Da Nang City also proposed that the Government not reserve 20% of the land fund to build social housing in the "Creative Space" project, with a scale of more than 17 hectares in Hoa Xuan Ward (Cam Le District, Da Nang City)...
In the two cases of projects in Quang Nam and Da Nang, the Ministry of Construction stated that they are within the Prime Minister's authority to consider and approve, along with conditions for clarifying the planning and allocating corresponding land funds...
Prolonged imbalance between supply and demand in real estate market
In December 2020, the People's Committee of Dong Nai province sent a document proposing to the Government to allow the implementation of social housing development obligations by paying money at 3 projects in Nhon Trach district (Dong Nai province), including: The Lake urban residential area project in Long Tan commune, scale of 35.3 hectares; urban residential area project in Long Tan commune, scale of more than 34 hectares; residential area project in Phuoc Thien commune, scale of nearly 53 hectares.
The Ministry of Construction stated that the three projects mentioned above are all subject to the requirement of reserving 20% of land for social housing. At the same time, Dong Nai is a locality with a low social housing development rate, only reaching 15%, while Nhon Trach district reaches 10% compared to the local housing development program.
Meanwhile, the demand for social housing in the area is still quite large, so the Ministry of Construction proposed that the People's Committee of Dong Nai province reserve 20% of the land fund in the above projects to develop social housing and focus on promoting it.
In case the Dong Nai Provincial People's Committee does not reserve 20% of the land fund in the above projects for social housing, it is necessary to clarify the inconsistency and report to the Prime Minister for consideration. If approved, it is necessary to arrange corresponding land fund and pay social housing development fee corresponding to 20% of the land fund in the 3 projects.
Professor Dang Hung Vo, former Deputy Minister of Natural Resources and Environment, said that current laws allow investors to fulfill their obligations to develop social housing in two forms: building houses or paying money. The fact that many localities support businesses and propose asking the Central Government to allow them to pay land use fees instead of building social housing is not against the law.
However, the consequence is that the imbalance between supply and demand in the real estate market continues, people with real housing needs cannot buy houses, while society has an excess of high-end housing. Therefore, localities must review and carefully develop housing development plans to meet the real housing needs of the people, avoiding wasting resources.
According to experts, over the years, statistical reports and summaries of the real estate market by the Ministry of Construction have all mentioned the imbalance between supply and demand: excess luxury houses, shortage of affordable houses.
The demand for social housing is high, so when there is a project, the scene of queuing to buy house purchase documents will recur. Recently, the NHS Trung Van social housing project (Nam Tu Liem District, Hanoi) received thousands of applications to buy.
When the 2014 Housing Law and the 2014 Real Estate Business Law were issued and took effect, many people expected to resolve the above-mentioned imbalance between supply and demand. However, up to now, when these two laws continue to be amended and supplemented, waiting for the National Assembly to approve and promulgate, the issue of resolving the imbalance in the supply structure of social housing continues to be raised.
Many research reports from professional associations and companies related to the real estate market also show that affordable apartments have become "extinct" in special urban areas, the main centers of the real estate market are Ho Chi Minh City and Hanoi. This is like closing the opportunity to own a house for low-income people and the working class in large urban areas.
Need specific regulations to develop social housing
Dr. Nguyen Van Dinh, Vice President of the Vietnam Real Estate Association (VNREA), said that in reality, there are many cases where, in order to attract investment, localities have to prioritize and offer many incentives to businesses, even "indulge them to the fullest extent" to attract resources for the province's development. Among them, there are also many businesses that are not interested in developing social housing, so they often choose to pay land use fees instead of building social housing and are supported by the locality.
Social housing in the form of apartments is only in high demand in large cities with many industrial zones such as Hanoi, Ho Chi Minh City, Da Nang City, Bac Ninh, Dong Nai, Binh Duong, etc. In many localities, the culture and living habits are not familiar with this type of apartment. In particular, land prices in many localities are not high, so people's demand is mainly for land and houses. If we continue to build apartments as social housing, it can lead to abandonment and waste.
Mr. Dinh said that there should be strict regulations on prioritizing the development of 20% land fund for social housing in large cities with high population density such as Hanoi, Ho Chi Minh City, Da Nang City, Dong Nai, Binh Duong, etc. to promote social security, support many poor people and workers to access housing and stabilize their lives. It is not even possible to exclude the case of having separate, specific regulations to promote the development of social housing.
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