Social housing: Supply and demand mismatch

(Baonghean) - Vinh City is on the rise, the demand for high-rise apartments is very high. Currently, Vinh City has completed and put into use 4 social housing projects and is implementing 2 projects. However, the "demand" for social housing for low-income people and policy families is very high, but the "supply" has not met the demand.

Opportunities for low income earners

With the putting into use of 4 social housing projects in the wards: Le Loi, Quan Bau, Hung Loc, Trung Do, 456 apartments have been solved, with a total investment of 336.10 billion VND. Currently, in the area, there are 2 more social housing projects basically completed, preparing to be put into use in the communes: Nghi Kim, Nghi Phu with 200 apartments, with a total investment of 295.50 billion VND. According to the Department of Construction, implementing Resolution No. 317/2010/NQ-HDND dated July 10, 2010, enterprises that are social housing investors are supported 100% of the costs: compensation for site clearance, site leveling, topographic and geological surveys and detailed construction planning. These policies have had a positive impact on businesses, demonstrating the State's support for businesses in resolving housing policies for low-income people and removing difficulties for the province's real estate market.

Low-income housing projects only meet about a quarter of the demand.

The pioneer investor in building social housing in the province is TECCO Joint Stock Company. In 2011, 2 social housing projects invested by this enterprise were put into use, namely Le Loi apartment complex and Hung Loc apartment complex with a total of 186 apartments. Information about Tecco's social housing was eagerly awaited by the people and was fully booked immediately. Mr. Nguyen Xuan Quan - Deputy Director of Tecco Nghe An branch said: To implement the project, the investor was exempted from land use fees and supported with design fees. The selling price of the apartment at that time was 7.4 million VND/m2. The confirmation of the subjects eligible to buy or rent-purchase social housing was inspected and approved in writing by the Vinh City People's Committee. The selling price and rent-purchase of social housing were assessed and approved by competent authorities.

Following that, Kim Thi Real Estate Joint Stock Company implemented the CT1 social housing project, 15 floors high, including 238 rooms with a construction floor area of ​​18,777 m2, of which 80% of the apartments are planned for low-income people and 20% are commercial apartments. Currently, this unit continues to implement the CT2 social housing project, 12 floors high, including 170 apartments with a total floor area of ​​15,174 m2, with a total investment of 147 billion VND. When accessing the apartment of Kim Thi Real Estate Joint Stock Company according to the criteria for low-income people, Ms. LA, working at the Provincial Reproductive Health Care Center, was really excited to be able to borrow under the 30,000 billion VND package with incentives, solving the difficulties of her family. At the same time, the policy of developing social housing has opened up opportunities for home ownership for many low-income people.

Up to now, the loan to buy houses under the 30,000 billion VND package has expired, but low-income people, civil servants, public employees... can borrow to buy social housing at the Social Policy Bank with low interest rates according to the provisions of Decree 100/2015/ND-CP dated October 20, 2015 of the Government on the development and management of social housing at 4.8%/year (0.4%/month). This is an important capital channel for both home buyers and companies investing in building social housing.

There are many shortcomings

However, in reality, the price of apartments is not much lower than that of commercial housing, and is still quite high compared to the income of home buyers. The total exempted cost is 4-5% of the total investment, the selling price is from 6.6 - 8.8 million VND/m2 (about 5-10% lower than the selling price of commercial housing of the same type). Mr. Nguyen Xuan Quan - Deputy Director of Tecco Nghe An branch said that according to Decision 98 of the Provincial People's Committee, investors in social housing construction are exempted from 10% VAT, exempted from corporate income tax, exempted from infrastructure investment, and are given a profit margin of 5-10% on the selling price of the product. If such incentives are enjoyed, the product price will decrease, and home buyers can buy houses at lower prices. However, businesses have not enjoyed many incentives as prescribed and therefore, the price of social housing has not been as expected.

That is why, although the provincial authorities have tried to create favorable conditions in terms of policies and mechanisms to develop social housing locally, the number of enterprises investing in this type of housing in Nghe An province is still small, while the demand of the people is still very high. With 6 projects implemented, only less than 700 apartments have been launched on the market, this number is too small compared to the demand of about 3,000 apartments of low-income people.

It is known that the demand for social housing in Vinh city and urban areas is very large, but investment in social housing is still facing many difficulties, because investors do not want to "spend money" in this field because of low efficiency. In this situation, in order to encourage and attract investors in social housing projects, the Department of Construction presides over and coordinates with relevant departments, branches and sectors to advise the Provincial People's Committee to propose the Provincial People's Council to issue a Resolution on mechanisms and policies to support and encourage economic sectors to invest in the construction of social housing, while reducing apartment prices, creating conditions for low-income people to buy houses, will contribute to stabilizing their lives.

Low-income housing area - Hung Thinh and Hung Loc Residential Area (Vinh City) invested by Tecco.

In addition, another problem that needs to be mentioned is the situation of handing over social housing that is taking place. According to the law, investors have full authority to sign contracts after receiving written approval from competent authorities, so there are still acts of selling, exchanging social housing objects or giving them to people who do not really need them. “Previously, according to regulations, buyers of social housing were allowed to transfer after at least 10 years, but now the regulation has been reduced to 5 years. Therefore, there is no shortage of situations where one person lives in an apartment but another person is the owner. There is a phenomenon of secret transfers, circumventing the law by handwritten papers without notarization, waiting until after the prescribed time to complete the transfer procedures,” Mr. Nguyen Xuan Quan added.

Therefore, along with supporting and encouraging investors to invest in building social housing projects, authorities need to further tighten the management of social housing to avoid speculators taking advantage of the situation, affecting the right to buy houses of low-income people who are really having difficulty with housing.

Thu Huyen