The results of social housing development have not been as expected due to many difficulties and problems.
Vice Chairman of the Ho Chi Minh City People's Committee Bui Xuan Cuong said that based on the Ho Chi Minh City housing development program for the 2021-2030 period and the Government's project on investing in the construction of at least 1 million social housing units for low-income people and industrial park workers, in the 2021-2030 period, Ho Chi Minh City plans to develop about 69,700-93,000 social housing units; of which, in the 2021-2025 period, Ho Chi Minh City plans to develop 26,200 to 35,000 units.
Modest results
Since 2021, the Ho Chi Minh City People's Committee has issued many directives to remove obstacles in general policies and guidelines in implementation. In addition, since 2023, the city has also reviewed each obstacle in specific projects and issued directives to remove obstacles in implementing investment procedures with 63 solutions, corresponding to 21 projects.
However, the results of implementing the social housing development target are still limited and have not achieved the desired results. Specifically, from the beginning of the term (2021) to September 2024, the city has only completed 6 projects (5 social housing projects and 1 worker accommodation project) with a scale of 2,745 apartments and is under construction of 4 projects with nearly 3,000 apartments.
Le Thanh - An Lac social housing apartment building in Binh Tan district, Ho Chi Minh City Photo: QUOC ANH
Most of the completed and under-construction projects have completed part or all of the investment procedures in the 2016-2020 period (6/9 projects). The projects that have completed the procedures to be eligible for construction from 2021 to present have 3/9 projects.
The above-mentioned limitations stem from many causes. Firstly, the coordination of opinions and information exchange between units takes a lot of time, is administrative in nature and has many shortcomings. Secondly, caution in legal review of social housing projects also slows down the implementation process.
Third, the preferential policies for investment and social housing subjects are still not attractive enough and there are many problems in implementation. Fourth, the city has not yet established a database on subjects in need of social housing to connect with social housing project investors, to connect supply and demand and mobilize resources from these subjects through a state credit institution.
Dr. Can Van Luc, member of the National Financial and Monetary Policy Advisory Council, said that there are many things that need to be done to soon achieve the target of social housing. Because the demand for social housing of the people is very large but the localities have not yet met all of it. The target in the period of 2021-2030 is 1 million social housing units but the capacity to meet is only about 400,000 units.
This expert cited statistics showing that by the end of the third quarter of 2024, the whole country had only 79 completed projects, with 42,414 apartments, reaching 4% of the plan. There were 131 projects that had started construction, 412 projects with investment approval. The 120,000 billion VND credit package to support social housing development had only disbursed more than 1,700 billion VND, equivalent to 1.5%. Of which, the outstanding debt of 15 projects was only over 1,600 billion VND, the outstanding debt of home buyers at 12 projects was 150 billion VND.
High expectations
Mr. Bui Xuan Cuong said that in the coming time, the City Party Committee and the People's Committee of Ho Chi Minh City will continue to direct the departments and branches to implement the coordination regulations and resolve project procedures. In particular, the departments, branches, and Thu Duc City need to prioritize close coordination to complete investment procedures on planning work, approve investment policies for 27 projects (about 32,000 apartments) that are carrying out investment procedures. These are priority projects, focusing on resolving investment procedures and removing obstacles, with a monthly reporting regime, in order to soon put the projects into construction from now until the end of 2025.
In order for the projects to be put into implementation soon to complete the targets of the Resolution of the 11th Ho Chi Minh City Party Congress and the Government's project on investing in the construction of at least 1 million social housing units for low-income people and industrial park workers in the period of 2021-2030, the Ho Chi Minh City Department of Construction has proposed solutions on planning, approving investment policies, land, rearranging, handling, changing the purpose of using public assets, finance and enhancing the responsibility of departments, branches and People's Committees of districts, towns and Thu Duc City.
According to the Department of Construction, among the 27 projects that need to focus on implementing legal procedures, the department has reviewed feasible projects to start construction soon, including 1 project that has been approved for investment policy and investor approval (Le Thanh Tan Kien social housing project, Binh Chanh district, invested by Le Thanh Construction - Trading Company Limited with a scale of 1,456 units), 18 projects are carrying out procedures for investment policy approval (Department of Planning and Investment 13 projects, Thu Duc City People's Committee 5 projects).
Regarding public investment in social housing, according to the housing development program for the 2021-2030 period, the housing development plan for the 2021-2025 period has been approved by the Ho Chi Minh City People's Council and the Ho Chi Minh City People's Committee. In the 2021-2025 period, the state budget capital for social housing development is about 3,770 billion VND.
Currently, the Ho Chi Minh City People's Committee has approved the public investment policy for the project at 4 Phan Chu Trinh, Binh Thanh District, with a total capital of about 990 billion VND. In the coming time, the Department of Construction recommends that the Ho Chi Minh City People's Committee give strong direction to promote public investment in 4 social housing projects with a scale of about 4,000 apartments.
Propose reasonable tax rate
Mr. Truong Anh Tuan, Chairman of the Board of Directors of Hoang Quan Group, said that social housing has never had such a good price as it does now, because the same location and quality compared to commercial housing but the price is only 50%. Current interest rates are relatively good and businesses do not do social housing for profit, so buyers are low-income people, civil servants and employees who need to realize their dream of owning a house.
Mr. Phan Duc Hieu, Standing Member of the National Assembly's Economic Committee, said that since August 1, laws related to real estate have been put into practice, creating many favorable conditions for investors, developers and home buyers in social housing. Buyers can borrow with many preferential policies, and even income conditions have become more flexible.
Mr. Nguyen Manh Khoi, Deputy Director of the Department of Housing and Real Estate Market Management (Ministry of Construction), said that the 2023 Housing Law has many new points on social housing policies. In particular, regarding land funds for social housing development, the 2023 Housing Law clearly defines the responsibility for allocating land funds for social housing development as the responsibility of local authorities, accordingly assigning the responsibility of the Provincial People's Committee in the process of formulating and approving construction planning and urban planning to arrange sufficient land funds for social housing development according to the approved housing development program and plan. The delegation of authority is linked with responsibility to create a flexible mechanism for localities to implement.
The Law also amends and supplements many incentives for investors of social housing projects, encouraging enterprises to participate in investment, contributing to increasing the supply of social housing. Specifically, land use fees and land rents are exempted for the entire land area of the project and procedures for determining land prices, calculating land use fees and land rents are exempted according to the provisions of the law on land; enjoying a maximum profit rate of 10% for the area of social housing construction; receiving a maximum incentive of 20% of the total residential land area (or 20% of the total construction floor area of the project) for construction, service business, trade, and commercial housing according to the approved project investment policy.
However, Mr. Le Hoang Chau, Chairman of the Ho Chi Minh City Real Estate Association (HoREA), said that he has just sent two documents to the National Assembly Standing Committee and the Government with two important tax issues related to social housing. In particular, he proposed to supplement regulations on the most reasonable value-added tax rate for investors of social housing projects for rent only, investors of projects to renovate and rebuild apartment buildings and landlords who only rent out long-term rooms, and proposed to amend Clause 3, Article 16 of Decree No. 132/2020/ND-CP to increase the total deductible interest expense not to exceed 50% of the total net profit from business activities and extend the deduction period for the remaining interest expense to 7 years.
Discussion "Social Housing: Breakthrough from Policy"
Today, November 21, the Lao Dong Newspaper organized a discussion on "Social Housing: Breakthrough from Policy". The discussion was attended by authorities, businesses, and experts to dissect the difficulties and obstacles in housing development in recent times; at the same time, it pointed out new points from housing-related policies, and proposed solutions to soon realize the goals of social housing development.
Source: https://nld.com.vn/ky-vong-but-toc-trong-phat-trien-nha-o-xa-hoi-196241120203110604.htm
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