Government admits social housing stymied by low incentives

By Anh Minh   October 11, 2023 | 05:13 pm PT
Government admits social housing stymied by low incentives
A social housing project in the southern Binh Duong Province in August 2023. Photo by VnExpress/Quynh Tran
Time-consuming investment procedures and lack of attractive incentives for developing social housing are preventing the segment from developing strongly despite great demand.

In a report it sent to the National Assembly, the Government said demand for social housing for workers is big, but admitted a number of policy and other hurdles preclude its growth.

The procedures for developing social housing and buying and selling them are tortuous and lengthy, it admitted.

The prices of social housing units must be approved by provincial-level agencies before sale or lease, a time-consuming and costly process for developers.

Incentives for developing social housing for workers are not attractive enough to encourage developers. Current regulations require social housing projects to earmark at least 20% for lease initially, and permit developers to only sell these units after five years.

The Housing Law does not allow businesses and cooperatives to buy or lease social housing for their employees.

Administrative procedures are cumbersome for everything from preparations for investment and land acquisition to compensation payment and construction approval.

The Government plans to have at least 428,000 social housing units by 2025 and one million by 2030 at a cost of VND849 trillion ($35.4 billion).

The report said 41 social housing projects with 19,516 units have been completed in urban areas in the last two years, and 294 others with 288,499 units are under development.

Work on nine projects with over 18,700 units began this year.Most proposed social and workers’ housing projects are in the northern Hai Phong and Hanoi cities, Lam Dong Province in the Central Highlands, the central Binh Dinh Province and the northern Bac Giang Province.

According to a report by the Vietnam Bank for Social Policies, some 15,000 people have received loans of VND6.2 trillion (US$258.3 million) to buy social housing.

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