Does affordable housing necessarily need state 'subsidy'?

Should promote the development of low-cost commercial housing

At the seminar "Removing social housing bottlenecks" organized by Thanh Nien Newspaper on May 31, Professor Dang Hung Vo, former Deputy Minister of Natural Resources and Environment, said that there is still an old concept about social housing that there must be "subsidy" from the State: land is not collected for money, capital for building houses must have incentives...

Professor Dang Hung Vo

However, in reality, many businesses can use their strength to solve the social housing problem like making low-cost commercial housing. At this time, we need to consider certain incentives for low-cost commercial housing, because this is a segment right next to social housing.

Furthermore, according to the World Bank's perspective, there should be no concept of social housing but should be converted to low-cost commercial housing with certain incentives on taxes, access to land, and capital.

In addition, housing policy needs to go hand in hand with reform of salary and welfare regimes... to create a comprehensive solution to social security issues.

"Enterprises should delve deeper into the development of the low-cost commercial housing segment. The power that businesses can create by applying construction technology and construction material technology can greatly reduce housing costs. However, currently, businesses are also proposing to reduce cement, steel, etc., which reduces quality, which is not good," said Professor Dang Hung Vo.

Reducing administrative procedures to make social housing more attractive to businesses

Speaking at the seminar, Mr. Bui Tien Thanh, Head of Urban Development Department ( Hanoi Department of Construction), presented 3 ideas to speed up the progress of housing projects in general and social housing in particular.

Mr. Bui Tien Thanh

Firstly, the administrative procedures for social housing investment must be shortened. In case of bidding to select investors for social housing projects, there should be separate regulations, but currently it takes 2 years. That is too long for an investor selection procedure.

Second, it is necessary to review and abolish unnecessary administrative procedures and regulations for housing projects in general and social housing in particular. Anything that is not absolutely necessary must be eliminated immediately. Because for social housing, businesses only receive a maximum of 10% profit, unlike other commercial projects.

Third, this recommendation is related to the implementation sequence of housing projects in general and social housing projects in particular. In the implementation process, recently, enterprises have encountered difficulties with public land areas located in a "mixed" manner within the project boundary. Public land located within the boundary is very difficult to reclaim and allocate, meaning that the site clearance procedures need to have specific regulations to speed up the project implementation progress.

Surveying social housing needs to accurately locate projects

Mr. Nguyen Huu Duong, Chairman of the Board of Directors of Hoa Binh Group, shared that for large cities such as Hanoi, Ho Chi Minh City, etc., developing social housing requires surveying the demand for social housing accurately in each district and ward to grasp the specific quantity; from there, there is a basis for allocating land funds to build housing for low-income people. By doing so, people will only have to walk to work, which also helps reduce pressure on traffic infrastructure.

Mr. Nguyen Huu Duong

After having a land fund location, the enterprise sees that there is an opportunity to implement an attractive social housing project and will participate in advancing the land clearance money so that the State can reclaim the land. With a social housing project, when the State reclaims the land, the people are forced to hand over the land. However, the mechanism needs to give incentives to those who hand over the land to buy the first floor of the project to stabilize their livelihood.

"Suppose that spending 10 billion VND to clear 1 hectare of land for social housing will create millions of ^square meters of housing, helping about 20,000 workers to settle down. The project's implementation will also promote the development of dozens of other industries, increase social supply, and increase real estate liquidity... There are so many benefits, why not promote it?", Mr. Duong said.

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