Landlords need support from the city to help them upgrade boarding houses for workers

January 30, 2023 - 07:38
Many landlords in HCM City want to repair or upgrade their boarding houses where hundreds of thousands of workers live but they can not because of a lack of capital.
A boarding house for workers in District 12, HCM City. — Photo

HCM CITY — Many landlords in HCM City want to repair or upgrade their boarding houses where hundreds of thousands of workers live but they can not because of a lack of capital.

HCM City has 22 industrial parks and export processing zones, as well as the Sài Gòn High-Tech Park and Quang Trung Software Park, with more than 1.4 million workers. Most of them are migrants from nearby provinces and require rental housing.

Many low-income workers have to rent cheap rooms built by local households and individuals, with small spaces and poor living conditions.

Lê Thị Tuyết Lan, who owns a boarding house for workers on Bình Chánh District’s Vĩnh Lộc B Commune, said she has 29 boarding houses for more than 100 workers who are working at Vĩnh Lộc Industrial Park and PouYuen Company.

She recalled the problems both she and her tenants faced when water rose knee-high in her house during high tide. Workers returned home after exhausting ten or eleven-hour shifts only to fight the flood waters that threatened to ruin their possessions.

“Even at 11-12pm, my worker tenants were still busy bailing out water. There was no way I could sleep with all the ruckus, so I got up and joined them,” she said.

She wants to upgrade her boarding houses but it will cost many billions of đồng and she can not afford that.

Another landlord in Bình Tân District, Trịnh Văn Quang, said he also wants to rebuild his nine-room boarding house but he did not borrow any money because he did not want to go into debt.

So, Quang could only afford to do a proper upgrade of four rooms, outfitting them with sturdy staircases, new kitchens, new flooring and ceilings. Then he ran out of money, so the remaining four rooms could undergo very small renovations, like repainting.

Quang said that even though the rent for the newly furnished rooms is double that of the old ones, most tenants are willing to pay it.

“Seeing that worker demand for comfortable living is high, I have considered borrowing money to upgrade the other four rooms, building a garage, a public space, new approach roads, etc.," he said.

He said high interest rates and the resultant need to raise rent are discouraging factors.

Asked about the preferential loan packages that the city authorities have offered, Quang said, “I can only get them after meeting a slew of requirements and criteria. So most other landlords I know just go straight to the bank and present their house as collateral to borrow money.”

Director of the City’s Department of Construction Trần Hoàng Quân said the department has drawn up a plan to inspect boarding houses in the city. Its working groups will conduct inspections and classify the boarding houses following the standards for boarding houses set by the department in 2020.

The boarding houses must have an average space of at least five square meters per person. They must have doors and windows to maximise ventilation and absorb natural light. If a toilet is inside the room, it must be separated by a partition with a sleeping area.

Based on the current situation, the working groups will propose solutions to improve the quality of boarding houses for workers to rent.

Substandard accommodations will be classified based on the level of violations of construction standards concerning area, structure, natural ventilation, lighting and environment.

The city plans to offer bank loans at preferential interest rates for landlords to help them renovate rooms or build new rooms for workers to rent at reasonable prices.

The city in 2011 launched a preferential credit programme for households and individuals to get bank loans to build or repair their boarding houses.

However, only a few landlords have taken part because it is difficult to meet the requirements to get the loans.

Tax breaks and other benefits should be considered, experts said.

The city should also call on enterprises to take part in improving housing for workers.

Enterprises could offer financial support for their workers to help them pay rent. The workers have to commit to renting qualified accommodations and not low-quality ones, experts said.

In the long run, the city government must set aside land for accommodation for workers in areas with many factories and large production facilities, experts said.

It also needs to simplify administrative procedures related to building accommodation for workers, and offer tax incentives for a certain period of time for enterprises that build accommodation for workers. — VNS