Ministry proposes $2.8 bln credit to boost social housing projects

According to its latest proposal sent to the government and the Ministry of Planning and Investment on Oct. 28, the credit includes an interest rate compensation package of VND15 trillion and a refinance package of VND50 trillion.

The refinance package is for commercial banks to provide soft loans to employees in industrial parks, and investors of social housing projects as well as projects aimed at building accommodation for workers in industrial parks to rent.

In future, when building industrial parks, authorities should allocate land for housing that workers could rent, it said, stipulating the minimum area available to each worker should be 10 square meters.

It wanted the government to provide preferential treatment to developers of industrial parks and low-cost housing, including tax exemptions, reduction in land-use fees, value-added tax and corporate income tax and soft loans.

The country has 266 social housing projects with over 142,000 apartments. Besides, 121 industrial parks have housing for workers, and 100 others are currently building them.

Social housing demand among low-income earners in urban areas and workers in industrial parks in the 2021-25 period is estimated at some 294,600 apartments whose total construction costs stand at around VND220 trillion.

Developers are reluctant to take up social housing projects despite high demand because of low profits and difficult procedures, officials and experts said.

At 17 manufacturing hubs in Ho Chi Minh City, only 8 percent of staff live in designated accommodation, while the rest rent housing elsewhere, Le Hoang Chau, chairman of HCMC Real Estate Association, told a recent forum.