Social housing needs easier legal processes to flourish: experts

February 25, 2023 - 07:49
A recommendation has been made for the city's management board of civil and industrial construction investment projects, but the decision is not yet approved.
A social housing project in Thủ Đức, HCM City. —VNA/VNS Photo Xuân Tình

HCM CITY — Legal challenges are impeding progress on social housing and complex projects in HCM City, according to a recent report submitted by the city's construction department to the municipal People's Committee.

One project affected is the Tanimex Apartment Building in Bình Tân District, whose head investor is Tân Bình Import-Export JSC.

Despite having sufficient capital and land resources since 2010, the project remains on paper due to complicated processes to change its usage purpose from a workers' boarding house to a social housing unit.

The city People's Committee chairman Phan Văn Mãi has directed the Department of Natural Resources and Environment to address the issue.

The construction department held a meeting in November last year intending to realise the chairman's decision. However, no progress has been made so far.

The resettlement unit for households affected by the Xuyên Tâm Canal renovation project is in the same situation.

The plan has over 12,000 sq.m of land provided by the Bình Thạnh District People's Committee with the State budget and a complete infrastructure plan.

However, construction remains on hold as the city has not assigned a head investor.

A recommendation has been made for the city's management board of civil and industrial construction investment projects, but the decision is not yet approved.

Numerous social housing and workers' complex projects in the city are also making no progress due to bottlenecks in law compliance.

A real estate business owner said that the legal process for social housing is as slow as that of commercial housing projects.

He hoped that authorities and the government would address the core of the problem, which is having specific policies to remove the obstacles in legal procedures for social housing projects.

This way, businesses could access preferential credit packages and build affordable houses for people.

Nguyễn Duy Thành, chairman of Global Home Management JSC told Thanh Niên (Youth) newspaper that social housing was a major demand. However, the supply was very limited.

Apart from difficulties in legal procedures that might take years to complete, investors also had to deal with the fluctuating prices of construction materials, which lead to a significant difference between the selling price at the point of purchase and handover.

Thành believed that the government, as the market regulator, should create favourable conditions for legal processes to be completed in the shortest time possible.

More importantly, the state must have a land fund that could be offered or put up for public bidding between competent contractors.

If these conditions are met, social housing units will enter the market at a quick rate and low prices, as they only include construction costs, a few other expenses, and a 10 per cent profit margin, according to Thành.

According to the vice-chairman of HCM City Real Estate Association Lê Hữu Nghĩa, the government is focusing on developing social housing and workers' complex.

However, administrative procedures and working processes are an enormous obstacle, even if the VNĐ110 trillion (US$4.2 billion) credit package is approved.

Nghĩa said: "The key issue now is administrative procedures.

"Only if these processes are accelerated and streamlined can the projects continue, borrow loans and be built for a supply of apartments for people to buy and rent."

HCM City has tens of thousands of apartments and land for resettlement projects abandoned, especially in Vĩnh Lộc B and Thủ Thiêm resettlement areas.

Nguyễn Hoàng, a real estate expert, suggested that these abandoned resettlement projects should be converted into social housing to take advantage of the VNĐ110 trillion stimulus package when it is approved.

He said that as the regulations stated that households under land clearance plans if having no other accommodation and not enough money for a resettlement place, can purchase or rent social housing units. — VNS