Quenching the thirst for social housing supply, helping workers settle down

Workers who want to increase the supply of affordable social housing, increase rental housing while businesses that want to make social housing face many barriers that make the market misalign with supply and demand.

The barriers that have made the development of social housing, worker housing and rental housing sluggish in recent years are the land fund, preferential capital, obstacles in investor selection procedures and incentive mechanisms that are not substantive enough to attract businesses to “jump” into this market.

Sluggish progress in social housing

It is expected to be the apartment segment that quenches the thirst for apartments for urban people, especially middle-income, low-income people and workers… But the progress of building social housing projects in localities is still sluggish. 

Even with the 1 million social housing project, after more than a year of implementation, the number of apartments launched on the market is still trickling down.

Mr. Huynh Thanh Khiet – Deputy Director of Ho Chi Minh City Department of Construction HCMC – said from 2021 to Q1-2024, HCMC. HCMC has 3 fully built social housing projects with 865 apartments. There are currently 5 social housing projects and one worker accommodation project under construction with a scale of 4,754 units.

By April 30, 2025, the city will focus on completing legal procedures for 37 social housing projects with a scale of 35,000 units.

However, according to Mr. Khiet, social housing projects currently face problems, related to procedures for approving investment policies, planning work, bidding, financial issues…

Meanwhile, Mr. Le Hoang Chau – Chairman of Ho Chi Minh City Real Estate Association HCMC – said that in Q1-2024, the whole city will not have any social housing projects approved for investment policies or granted construction permits. Only one social housing project is the old completed project with 242 apartments. 

With the above data, Mr. Chau said that the segment of social housing, affordable housing, accommodation for workers is seriously lacking and this situation is still prolonged.

According to Mr. Chau, all social housing projects (including commercial housing projects) are currently stuck in the procedures for approving investment policies and approving investors, causing projects to be stuck in the first legal stage.

Remove legal, businesses will roll up their hands to make social housing

Talking to Tuoi Tre, Mrs. Dang Thi Kim Oanh – Chairwoman of Kim Oanh Group – said that the demand for social housing for workers is currently very large, especially in provinces and cities with many industrial parks and a high proportion of immigrants. 

For example, Binh Duong, one of the provinces with a high proportion of migrant workers with nearly 2 million workers from many provinces and cities in the country and abroad. With this labor force, according to Ms. Oanh, the demand for housing is extremely large, especially for low-income workers and workers. 

At the end of 2023, the Binh Duong Department of Construction estimates that the province's social housing demand in the period of 2021-2030 is 115,836 units. In which, in the period of 2021-2025 61,836 units, in the period of 2026-2030 54,000 units.

However, it is difficult for people to access social housing projects due to housing and income policies and the important factor that the supply of social housing in the market is too small compared to the demand. 

“Some of the social housing projects that have been built and completed mainly provide civil servants and public employees with difficulties in housing. As for migrants, workers still have very little access to these projects,” Oanh said.

From the perspective of social housing developers, Ms. Oanh said that to build social housing, businesses first need a land bank. Enterprises wish to be introduced by the State and relevant departments and sectors to introduce clean land funds with reasonable costs to pull down prices suitable for buyers.

In addition, it is necessary to pay close attention and companionship of state management agencies, and at the same time have a smooth legal corridor to support the completion of legal procedures to soon implement the project.

“Banks need to step up to support investors to have enough capital to build and develop social housing projects and buyers to have access to low-interest loans to easily own their homes,” Ms. Oanh said.

Similarly, according to Mr. Le Huu Nghia, director of Le Thanh Construction – Trading Company, it is necessary to speed up procedures for developing social housing projects because businesses are taking too many years to carry out administrative procedures for social housing. 

Mr. Nghia proposed to quickly dismantle the law to increase the supply of houses to the market, and at the same time have effective policies on capital sources with substantive preferential interest rates for both investors and home buyers.

Regarding the issue, Mr. Le Hoang Chau suggested that the family situation deduction should be raised from VND 11 million to VND 15 million for employees and from VND 4.4 million to VND 5.5 million for dependents, and at the same time raise the tax rate of tier 1 to VND 75 million / year instead of only VND 60 million / year as current regulations to suit the situation current practice, helping workers access social housing.