Reasons why there are few social housing properties in Hanoi
Hanoi, the capital city of Vietnam, is facing a significant shortage of social housing properties. This issue was highlighted in a report by the Ministry of Construction during a meeting held on March 16, 2024, chaired by Prime Minister Pham Minh Chinh.
Supply of Social Housing
According to the Ministry of Construction, although there is a high demand for social housing in key areas, the investment in social housing projects is still limited compared to the targeted goals outlined in the 2025 Project. For example, Hanoi only has three projects, offering 1,700 units, meeting just 9% of the demand. Similarly, Ho Chi Minh City has seven projects with nearly 5,000 units, meeting 19% of the demand. Meanwhile, Da Nang has five projects with 2,750 units, meeting 43% of the demand.
Some areas, such as Ha Giang, Cao Bang, Dien Bien, Lai Chau, Vinh Phuc, Ninh Binh, Nam Dinh, Quang Ngai, Quang Binh, Kon Tum, Gia Lai, Long An, Vinh Long, and Soc Trang, have not even started any social housing projects since 2021.
Funding Challenges
Regarding the 120 trillion VND funding allocated for social housing development, the Ministry of Construction stated that so far, banks have committed to providing credit for 15 projects, totaling around 7 trillion VND. Out of these, eight social housing projects in seven locations have already been disbursed with approximately 640 billion VND. However, the disbursement process is still slow.
Unattractive Policies
The Ministry of Construction highlighted the limitations of current policies in meeting the practical needs for social housing and housing for workers. The report states that the procedures for investment, purchase, lease, and other related aspects of social housing are complex and time-consuming. In addition, the current incentives for developers and investors in social housing projects are not attractive enough. Many areas have not shown enough interest in developing social housing or housing for workers, neglecting the allocation of land for social housing in urban and industrial planning.
Low Registration Rates
There is a stark disparity between the demand for social housing and the registration rates in major cities with a high population of low-income workers. For instance, Hanoi has a demand for 1,181 units, Ho Chi Minh City has a demand for 3,765 units, Da Nang has a demand for 1,880 units, and Can Tho has a demand for 1,535 units. However, the actual formation of registered social housing units in 2024 remains low.
Suggestions and Solutions
To achieve the goal of completing approximately 130,000 social housing units nationwide, the Ministry of Construction has proposed several solutions. These include streamlining investment procedures, waiving land use fees, improving planning, securing land funds, and developing housing for industrial laborers.
The Ministry of Construction has also recommended that the State Bank of Vietnam consider reducing interest rates for the 120 trillion VND funding package to align with practical conditions during each stage. Additionally, they suggest reviewing and supplementing urban and industrial planning, ensuring sufficient land reserves for social housing development.
To attract more investment and utilize the incentives for social housing development, the Ministry of Construction emphasizes the need for specific mechanisms and measures to simplify administrative procedures related to project approval, land allocation, land leasing, and clearance. These steps will encourage businesses to invest in social housing projects, thus increasing the supply in the market.
With demand for social housing on the rise, it is crucial to address the challenges faced in Hanoi and other areas of Vietnam. By implementing effective policies and streamlining processes, the government can work towards providing adequate housing for its citizens.