Removing paperwork is better than giving money!

To quickly increase social housing and affordable housing, the first thing to do is to create clean land to build houses.

Green River project is an apartment building built according to the integrated model of social housing (block B) and commerce (block A) located on Pham The Hien street, ward 6, district 8, Ho Chi Minh City - Photo: TTD

Prolonged procedures cause many costs, so in addition to clean land (clean land will certainly have houses), businesses participating in creating "new players" in the real estate market believe that the State removing procedures is no different from giving money, reducing investment costs. That is the condition to reduce apartment prices.

With clean land, apartment prices will decrease

Commenting on the above issue, Mr. Nguyen Huu Duong, Chairman of Hoa Binh Group, stated: To develop social housing, the most important thing is that localities must properly implement the Housing Law.

That is, every year, the People's Committees of provinces and cities must allocate budgets to clear the land, create clean land funds for social housing, then organize bidding to select investors for the projects. To build social housing, first there must be land to build houses, and after the houses are built, there will be houses to sell.

According to Mr. Duong, in the past, Hanoi City has implemented 5 concentrated social housing areas. The cost of site clearance alone to create land funds to build these 5 concentrated social housing areas is about 12,350 billion VND. However, from 2021 to now, the City has only allocated 47 billion VND for site clearance, so it is very difficult to arrange clean land funds.

Mr. Duong proposed that in case the city does not have money to clear land for social housing construction, there should be a mechanism to allow businesses to advance money to clear land for the project, then deduct it from the business's tax.

"Land is managed by local authorities, so there needs to be a mechanism to facilitate businesses in accessing land for housing construction," Mr. Duong emphasized.

Looking more broadly from a capital perspective, Mr. Le Huu Nghia, General Director of Le Thanh Company (one of the early investors participating in building rental housing in Ho Chi Minh City), said that there should be a budget mechanism to create a national housing fund.

According to Mr. Nghia, for capital for developing social housing and affordable housing, we have long relied on bank loans. However, now that a national housing fund is established, there needs to be a mechanism to provide a portion of the capital for the national housing fund from the budget.

Every year, the country spends hundreds of thousands of billions of dong on public investment, so a portion of the capital should be allocated to the national housing fund to achieve the goal of providing housing and social security for the people. When there is money, the national housing fund can be used to partially support the interest on social housing loans for home buyers.

People visit the newly completed Thu Thiem Green House social housing area - Photo: TU TRUNG

5 year procedure reduced to 1 year, great!

Mr. Le Huu Nghia said that to have affordable housing, it is necessary to determine the main costs of the house such as land cost, construction cost and interest cost.

In which, the basic construction costs between social housing and commercial housing are not much different.

To reduce costs, one can adjust the quality of interiors, equipment or apply new technologies, but the cost reduction will not be much. Regarding land costs, according to Mr. Nghia, only when the State has a clean land fund to allocate to businesses will there be cheap prices.

However, with the regulation that compensation price is equal to market price, even if the State takes over or businesses negotiate, it will be difficult to receive cheap land transfers.

Thus, the greatest support to reduce housing costs is to remove legal and institutional obstacles. The State needs to reform mechanisms, policies and administrative procedures to help social housing enterprises get their projects approved as quickly as possible.

Currently, it takes 4-5 years to complete a project, which greatly increases the cost of interest, opportunity costs, etc. If the procedures are quick and convenient, businesses can complete a project in 1 year, which will greatly reduce costs, thereby reducing housing prices. Removing legal obstacles will also help the supply of projects to be abundant, and market competition will make housing quality better and housing prices cheaper.

In addition, Mr. Nghia said that if the same land area for commercial housing or social housing is 10 floors, businesses will prioritize commercial housing because of higher profits. Therefore, the State needs to have incentives to increase the land use coefficient to encourage businesses to participate in low-cost social housing projects.

"The establishment of a national housing fund is expected by the business community to create a source of preferential loans for businesses as well as social housing buyers.

In addition to the mechanism for mobilizing capital sources, the State also needs to study budget allocations into funds to have preferential loan packages for investors and home buyers," Mr. Nghia proposed.

Source: https://tuoitre.vn/go-vuong-thu-tuc-con-hon-cho-tien-20250309083110708.htm