The worker at Ho Chi Minh City footwear maker PouYuen has forced herself to save for years even if that sometimes means going to sleep on an empty stomach just so that she can someday buy a house in Vietnam’s biggest city.
When property developers offered to sell apartments with a down payment of VND200 million (US$8,450), she had had no savings, but years later, after she had been able to save that amount, the down payment had doubled to VND400 million.
She says: "Even when I had saved VND400 million, there was no social housing project available within that price range. I thought about commercial projects, but the monthly payment was too high for my income."
The 42-year-old now earns VND12 million a month, but she and her daughter live in a rented room of less than 10 square meters, and have no idea when they will have a home of their own.
She is one of three million workers who have migrated to HCMC to make a living and mostly live in rented houses.
Property prices the city have been skyrocketing in recent years, giving low-income people little chance of owning a home.
The situation is similar for government workers, with around 20,000 of them not possessing a house, according to the city Department of Construction.
Nguyen Thi Hoang Trang, a specialist at the Department of Labor, Invalids and Social Affairs, has been living with eight family members in a two-story house for the last 10 years.
The house is only 24 square meters and situated 15 kilometers from her office.
Trang and her husband make a combined VND20 million a month, and they have been dreaming of owning an apartment of their own so that their child can have some personal space, but there is no social housing for them to buy.
"We have been looking for eight years, but still nothing," she says.
Social housing is arguably the only viable property option for people like Trang and Hue, but there is little supply and financial support for them.
In the last 15 years only 18,800 social housing units were bought in HCMC, a microscopic figure in a city of 13 million.
An apartment costs on average VND1-1.6 billion ($42,400-67,800), which is way out of reach of most blue-collar employees, three out of four of whom earn less than VND7 million a month, according to a study conducted at the end of last year by the Social Life Research Institute.
Another study of 400 people in the city in June found that 82% of them live in rented houses and only 1.25% have a mortgage for an apartment.
Only 5,000 people have got loans from the HCMC Housing Development Fund at the preferential interest rate of 4.7% in 20 years, according to the Ho Chi Minh City Real Estate Association.
Tran Van Tien, director of the HCMC Bank For Social Policies, says the bank has money to lend but there is not enough social housing for people to buy.
This is why it has only been asking the government for VND10-20 billion a year, he said.
No motivation to stay
Industry insiders say that the inadequacy of social housing supply affects not only low-income people but also the city’s economic growth itself.
Nguyen Do Dung, an urban planning consultant for a Singaporean company, says when there is no prospect of house ownership, workers tend to keep moving and not commit to any employer.
On the other hand, a large supply of affordable housing makes workers committed to staying in the city to pay off their mortgages, in the process ensuring the sustainability of businesses, he said.
"During the Covid pandemic 600,000 people left HCMC for their hometowns, which showed how easily workers are willing to leave when they have no home ownership."
One of the hurdles to developing social housing in HCMC is the limited supply of land, while in other countries authorities often set aside enough land for the next 15 to 30 years, he points out.
Slow and tortuous administrative procedures are another challenge, he says, quoting industry insiders as saying it takes around one year for a housing project to go from approval to handover in Singapore and two years in China but four in Vietnam.
A third problem is the lack of supportive policies for developing affordable housing, with the government capping profits at 10% and requiring them to recoup their investment over 15 years or longer, he says.
"This is why many developers choose not to build social housing though demand is high."
Le Huu Nghia, CEO of construction firm Le Thanh, has been seeing these issues for the last 20 years but has no solutions.
"The more we try to untangle the social housing problem, the more tangled it gets."
His company, which has built around 7,000 affordable apartments so far, has been grappling with administrative bottlenecks since each project has to be approved by 11 different government agencies.
He says for instance if a project is deemed to affect traffic it is stopped summarily.
Technically, developers are supposed to get loans at a preferential interest rate of 4.8% for social housing projects, but for years his company has been borrowing at 11%, the same rate as for commercial projects, he says.
"The procedures are horrifying. Social housing developers tend to move on to commercial projects to save themselves the trouble."
‘One million apartments’
HCMC leaders are well aware of the issues and have spoken about plans to resolve them.
After seeing workers flee the city last October following the stringent social distancing clampdown, city chairman Phan Van Mai admitted: "The city receives a large number of workers, but there is not enough investment in taking care of them."
The city then announced a target to build one million affordable apartments. In the last three months work has begun on some projects in Thu Duc City and Binh Chanh and Nha Be Districts.
But some experts fear the target is too ambitious.
Dung points out that a million apartments will require at least 4,200 hectares of land or four times the size of District 1.
"It will take 16 to 20 years to achieve the target if all administrative obstacles are removed."
Nguyen Minh Hoa, deputy chairman of the HCMC Urban Planning and Development Association, says the city needs to redefine social housing as affordable commercial housing to attract private companies.
"What the city will gain from these projects is a stable source of migrant workers who will create added value."
He wants HCMC to pay contractors to build affordable housing and sell them to people in need.
"A 40-square-meter apartment should have a price tag of VND600 million under this model, which is payable by an average worker in 10 years."
He adds that this is how Singapore resolved its housing problem.
Truong Hoang Truong, head of urbanism study at the HCMC University of Social Sciences and Humanities, says the Vietnamese government needs to earmark land for social housing and hand it over to cities and provinces and require them to find contractors, which will simplify the administrative process.
But while experts and government leaders seek a solution, Hue has given up her dream of owning a home in Saigon.
"I am looking for a piece of land in my hometown where I will live after my retirement."
Le Tuyet, Hoang Khanh, Thanh Ha