Participants at a conference on social housing development in Hà Nội on March 16. — VGP Photo

There is still much to do to accomplish the Government's objective of completing 130,000 social housing units nationwide in 2024, heard participants at a meeting, chaired by Prime Minister Phạm Minh Chính in Hà Nội this morning.

Policymakers and property developers have long voiced their concerns over a lack of interest by local governments in the development of social housing and housing for workers, resulting in the absence of clearly defined targets for affordable housing in localities' 5-year housing development plans.

To make matters worse, investors and developers have been keeping a distance from the affordable housing segment due to the investment procedure sequence, conditions for purchasing, renting, and leasing social housing still complex and time-consuming, and the incentives for investors in social housing and worker housing projects are considered not attractive enough.

Land funds for developing social housing have not been identified in urban and industrial zone planning; apart from the 20 per cent social housing land allocation in commercial housing projects, most localities have not paid attention to reserving land funds for social housing projects.

There hasn't been a determined and proactive approach in developing affordable housing, and there are no plans to ensure the completion of their set objectives. Despite having a large population of low-income labourers concentrated in major cities with high demand for social housing, the cities have managed abysmally low numbers of social housing units in 2024, namely Hà Nội with 1,181 units, HCM City with 3,765 units, Đà Nẵng with 1,880 units, Cần Thơ with 1,535 units.

There have been reports of approved projects yet local authorities have not shown interest in the selection of project investors for implementation. Meanwhile, some projects have been started but progressed extremely slowly or lack funding due to local authorities failing to submit them for the Government's preferential loans.

The VNĐ120 trillion (US4.85 billion) funds under Resolution No. 33/NQ-CP of the Government have not been effectively disbursed. So far, there have been 127 social housing projects registered nationwide with a total of 114,934 units under construction. However, only 28 localities have announced their list of 68 projects eligible for preferential loans.

Even after the State Bank of Vietnam (SBV) has twice reduced the interest rates for the VNĐ120 trillion funds, with the interest rate applied in the first half of 2024 being 8 per cent per annum for investors and 7.5 per cent for homebuyers, and the preferential interest rate period being short, three years for investors and five years for individual customers, it has not been considered as attractive by both.

In order to address some of the above-mentioned problems, the Ministry of Planning and Investment (MPI) has been tasked to lead and coordinate with the Social Policy Bank, and the Ministry of Construction (MoC) to allocate sufficient capital to provide loans for individuals to buy, rent, or lease units in social housing projects. The state budget allocated has been estimated at VNĐ6,000 billion.

Meanwhile, the MoC was told to work together with localities to focus on achieving the target of completing 130,000 social housing units in 2024 as directed by the Government in Resolution No. 01/NQ-CP dated January 5, 2024. — VNS