Conclusion of the Prime Minister at the Conference on Overcoming Difficulties and Promoting the Development of Social Housing in Vietnam

Conclusion of the Prime Minister at the Conference on Overcoming Difficulties and Promoting the Development of Social Housing in Vietnam (Internet image) 

Regarding this matter, LawNet would like to answer as follows:

On March 27, 2024, the Government Office issued Notice 123/TB-VPCP on the Prime Minister's Conclusion at the Conference on overcoming difficulties and promoting social housing development.

Conclusion of the Prime Minister at the Conference on Overcoming Difficulties and Promoting the Development of Social Housing in Vietnam

After hearing the report from the Ministry of Construction on overcoming difficulties and promoting the development of social housing, as well as the opinions expressed by representatives from various ministries, sectors, localities, associations, experts, and businesses, Prime Minister Pham Minh Chinh concluded and provided the following directions:

The Conclusion of the Prime Minister at the Conference on Overcoming Difficulties and Promoting the Development of Social Housing stated that after hearing the report from the Ministry of Construction on the difficulties and promoting the development of social housing, as well as the opinions of representatives from various ministries, sectors, localities, associations, experts, and businesses, Prime Minister Pham Minh Chinh concluded and directed as follows:

(1) Highly appreciating the specific and comprehensive reports from the Ministry of Construction and other relevant ministries, sectors, and localities on the current situation, limitations, causes, and solutions to promote the development of social housing. The conference also received many heartfelt and practical suggestions and proposals from investment and social housing development businesses. In the past period, under the resolute direction of the Government, the Prime Minister, the active participation of ministries, sectors, local authorities, and businesses, the implementation of social housing development has achieved some results:

- The Government has submitted to the National Assembly for approval the Housing Law (amended), Land Law (amended), and Law on Real Estate Business (amended), which include many preferential mechanisms for social housing development, such as:

(i) Exemption from land use fees and land rent for the entire Scheme area; investors are not required to go through procedures to determine land prices;

(ii) Allocation of up to 20% of the total land area for the construction of infrastructure, services, and commercial housing;

(iii) Access to preferential interest rates for loans;

(iv) Relaxing residency requirements for social housing buyers and lease-purchase conditions;

(v) Providing additional policies for housing for industrial zone workers and armed forces personnel.

- Ministries and sectors have actively reviewed and amended many legal documents related to various new contents, removing many difficulties and obstacles in practice... striving to complete guiding decrees and reports to the National Assembly to obtain effectiveness for the Housing Law and the amended Real Estate Business Law from July 1, 2024 (the current effectiveness is from January 1, 2025).

- Many social housing Schemes have been implemented and completed, contributing to supporting low-income people, workers, and laborers in settling down and finding stable jobs. From 2021 until now, the whole country has implemented 499 social housing Schemes with a scale of over 411 thousand apartments (including 72 completed Schemes with a scale of over 38 thousand apartments; 129 Schemes commenced construction with a scale of nearly 115 thousand apartments; 298 Schemes were approved for investment with a scale of nearly 259 thousand apartments). Many localities have been active in attracting investment and promoting the construction of social housing (provinces and cities such as Bac Ninh, Bac Giang, Hai Phong, Binh Duong, Dong Nai, Thanh Hoa, etc.).

- The credit package of VND 120 trillion with preferential interest rates has achieved initial results, contributing to promoting the development of social housing in localities. Banks have committed to providing loans for 15 Schemes with an amount of about VND 7 trillion, including 8 social housing Schemes in 7 localities that have been disbursed with a capital of about VND 640 billion.

- Administrative procedure reform, simplification, and facilitation of business conditions have been strengthened, while decentralization, empowerment, inspection, and supervision have been enhanced.

The development of social housing in the past period has achieved important results as mentioned above. However, the implementation of social housing policies still faces certain existing limitations and challenges that need to be promptly addressed in order to promote the development of social housing in the coming time.

(2) Some existing difficulties and challenges:

The conference identified the existing difficulties and challenges that need to be focused on in order to promote the development of social housing in the coming time, specifically:

- There are still obstacles and difficulties for investment businesses in social housing construction, especially:

(i) in accessing land (land allocation planning, Scheme transparency);

(ii) funding and credit access;

(iii) administrative procedures (in construction investment, investor selection, approval of house prices)....

The investor selection procedures for social housing Schemes are still implemented similarly to commercial housing Schemes, leading to a lack of attractiveness for investors and some difficulties and limitations in terms of conditions and target groups for purchasing, renting, or lease-purchasing social housing.

- Some localities have planned land for social housing, but participating investors still lack capacity and financial resources. Some Scheme investors lack motivation for implementation due to low Scheme efficiency, resulting in delays in Scheme implementation. The maximum prescribed profit margin of only 10% is not high unless localities create favorable conditions and support.

- Many large provinces and cities, which have a concentration of industrial zones, have a low rate of social housing implementation compared to the target of the Scheme "Investing in the construction of at least 1 million social housing units for low-income people and industrial zone workers in the period 2021–2030." Moreover, many localities have not started any social housing Schemes since 2021 (such as Vinh Phuc, Ninh Binh, Quang Ngai, Long An, Vinh Long, etc.).

- The disbursement of the VND 120 trillion preferential credit package is still slow compared to expectations and actual needs (only 5.8% of the credit has been committed, and disbursement has not reached 1%).

More details can be found in Notice 123/TB-VPCP issued on March 27, 2024.

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