Will increase profits for social housing investors

The Long Binh Tan Social Housing Project model in Long Binh Tan ward, Bien Hoa city is under construction. Photo: Hoang Loc

This mechanism is expected to be a driving force to attract businesses to participate in developing social housing projects, thereby reducing housing pressure for low-income people.

Increase profits by 3%

The Ministry of Construction is soliciting opinions on the Draft Resolution on Piloting a number of specific mechanisms and policies for the development of social housing to submit to the Government for consideration and decision before submitting to the National Assembly for approval. One of the specific mechanisms of the above resolution is to increase the maximum profit from 10% to 13%. Specifically, Article 8 of the draft states that investors in the construction of social housing and housing for the people's armed forces to rent or purchase are entitled to a maximum profit of 13% of the total investment cost of the project.

According to the explanation of the Ministry of Construction, in the past, commercial housing projects have had specific mechanisms to remove bottlenecks, but social housing has not. Meanwhile, social housing is in high demand, especially in large cities and localities with many industrial parks. To increase supply and help low-income people have housing, there needs to be specific mechanisms for this housing segment.

From March 17 to April 18, the Ministry of Construction solicited opinions on the Draft Resolution on Piloting a number of specific mechanisms and policies for social housing development. Some of the specific mechanisms proposed are: establishing a National Social Housing Development Fund; selecting investors to implement projects without bidding; eliminating the procedure for approving investment policies...

According to the Ministry of Construction, the current maximum profit margin of 10% is not attractive enough for businesses, especially in the context of rising material and labor costs, complicated procedures, difficult access to land, high interest rates, etc. If the profit margin is increased to 13%, combined with some specific mechanisms, it will create motivation to attract businesses to participate in project development, supplementing supply to the market.

Regarding the view that increasing profits may lead to an increase in social housing prices, affecting the ability of low-income people to access housing, the Ministry of Construction believes that adjusting the above profit level is to ensure the harmony of interests between the state, enterprises and people, so that social housing can develop sustainably and effectively.

In Dong Nai, in recent times, although the province has had many solutions to develop social housing such as: organizing investment promotion conferences, issuing policies to support infrastructure investment, organizing design model selection competitions, issuing documents guiding the shortened process... but the products have not met expectations. From 2021 to now, the province has only achieved about 17% of the target of 10,000 apartments in the period of 2021-2025. The reason given is that the process of implementing investment procedures, bidding to select investors, and construction is prolonged; the attractiveness of social housing projects is not much.

Reduce the costs involved in getting affordable housing

According to Prime Minister Pham Minh Chinh, social housing is like other types of normal housing but with State support so that low-income people can access it. For this type of housing to develop sustainably, there must be specific mechanisms and policies on capital sources, procedures, and profits.

Mr. Nguyen Minh Hai, Director of An Hung Phat Infrastructure Development Joint Stock Company, the investor of the NXH2 Social Housing Project with a scale of more than 1,200 apartments under construction in Bien Hoa city, said that profit is not yet a decisive factor in attracting investors to this segment. According to Mr. Hai, the number of tasks to implement social housing projects is greater than that of commercial housing projects. Specifically, in addition to general procedures such as planning approval, investment policy approval, bidding to select investors, land allocation/lease, social housing projects have additional procedures for confirming eligible buyers/renters, appraising selling prices/rental prices, and finalizing selling prices... These procedures take 2-3 years, discouraging investors, leading to unnecessary costs.

Therefore, Mr. Hai believes that it is necessary to add specific mechanisms on administrative procedures for both investors and home buyers and renters; such as: cutting down on procedures, reducing the time to process procedures; reducing loan interest rates for investors and home buyers and renters. For An Hung Phat in particular, the solutions focus on designing beautiful projects, maximizing functionality and quality; choosing quality materials and ensuring fast construction; choosing a capable and experienced construction unit.

Mr. Nguyen Tan Kiet, Chairman and General Director of Thanh Thang Design and Construction Consulting Company Limited, the investor of the social housing project of nearly 1,200 apartments being implemented in Long Khanh city, said that a profit of no more than 10% will not be attractive to investors. According to Mr. Kiet, it is necessary to increase the maximum profit to
13-15%; simplify administrative procedures for investors to deploy, complete and put projects into use, contributing to ensuring social security for low-income people.

Hoang Loc

Source: https://baodongnai.com.vn/kinh-te/202504/se-nang-loi-nhuan-cho-chu-dau-tu-nha-o-xa-hoi-e334139/