Prime Minister: Shorten procedures, reduce interest rates to increase social housing

On March 16, chairing a conference to remove difficulties and promote the development of social housing, Prime Minister Pham Minh Chinh clearly stated that social housing is a normal housing like other types of housing, helping people settle down and make a living. However, the difference is that there must be mechanisms and policies that are suitable for both buyers and sellers. Therefore, all relevant entities must get involved, put themselves in the position of those who do not have a place to live to act.

Social housing is still low compared to demand.

The Prime Minister's request was raised when the reality developed.social housinghas not met the requirements. The Ministry of Construction said that investment in social housing is still limited. Of which, Hanoi has only three projects with 1,700 apartments, meeting 9%; Ho Chi Minh City has seven projects, 4,996 apartments, meeting 19%; Da Nang has five projects, 2,750 apartments, meeting 43%...

According to the report of the Ministry of Construction, in the period from 2021 to the end of 2023, there will be 499 social housing projects implemented nationwide with a scale of 411,250 apartments. Many localities have been active in investing and starting construction of social housing with tens of thousands of apartments.

However, this ministry assessed that although there is a huge demand for social housing in some key localities, the construction of social housing is still limited, such as Hanoi, Ho Chi Minh City, Da Nang... In addition, 28 localities have announced 68 projects that are eligible to meet the requirements.120,000 billion VND credit packagewith a loan demand of more than 30,000 billion VND.

Banks have committed to providing credit for 15 projects with an amount of about 7,000 billion VND; with 8 social housing projects in 7 localities being disbursed with capital of about 640 billion VND.

However, many localities have not paid attention to developing social housing and workers' housing, such as not clearly defining land funds, selecting investors, and slow progress in project implementation. The evidence is that only 28 localities have announced a list of 68 projects, while 59 projects have started construction but have not been included in the list.

Furthermore, the actual implementation of social housing projects shared by businesses is still fraught with many shortcomings and difficulties.

Mr. Nguyen Viet Quang - Vice Chairman of VinGroup Corporation said that the preferential loan interest rate for investment in construction as well as for renting and buying social housing is currently high, with the investor being 8%/year, and the customer being 7.5%/year. The procedures for implementing social housing projects are longer than for commercial housing projects. From the beginning of implementation to the commencement of construction is usually about two years.

Mr. Nguyen Viet Cuong - Chairman of Phu Cuong Group also shared that he has built more than 1,000 apartments but is stuck in legal procedures. There are projects that have not been implemented even though they have requested two or three dozen seals.

"Why does the Prime Minister work with great intensity, enthusiasm and desire for development, with the right direction, but we cannot implement it as planned? Is it a situation where the carpet is laid out above and nails are strewn below when administrative procedures are stuck, or is it a fear of making mistakes, fear of responsibility, and not daring to do it?" - Mr. Cuong raised the question.

High interest rates, cumbersome procedures

As further evidence, Mr. Cuong said there was a company with good capacity, implementing a project for 6 years, everything was almost completed, then suddenly a document was sent requesting to review that project.

So the project has been "frozen" for 3-4 years now, unable to be implemented, causing a loss of 2,000 - 3,000 billion VND, and unable to pay taxes to the State. According to him, if any mistakes are discovered, they need to be pointed out so that the business can do it right.

Sharing the same view, Mr. Tran Ngoc Anh - Deputy General Director of Viglacera Corporation said that the company is facing some difficulties in trading social housing apartments. Also because of the regulations that are still limited in terms of subjects and conditions for renting and purchasing.

Therefore, Mr. Anh recommended that the Prime Minister soon apply the amended Housing Law and issue a decree on social housing in the direction of removing obstacles and expanding the subjects eligible to buy and rent with simple and easy-to-implement conditions so that the poor can soon access housing.

Dr. Le Xuan Nghia, a member of the National Monetary and Financial Policy Advisory Council, also pointed out the reality: For a long time, people have been talking about the government not wanting to allocate land for social housing because it cannot collect taxes.

Furthermore, administrative procedures are associated with petty corruption. He said that he surveyed a number of provinces and found that the procedures were extremely complicated. Each year, some provinces only cleared a few dozen hectares of land for compensation and site clearance. Meanwhile, some provinces innovated their methods and the area of ​​land compensation and site clearance increased to hundreds or thousands of hectares.

According to Dr. Hoang Van Cuong - Vice Principal of National Economics University, there are social housing projects located quite far from the center, without means of transportation and travel time.

Therefore, he believes that it is necessary to plan locations near the center but with low commercial advantages to build rental housing funds, meeting the housing needs of low-income people.

These projects need preferential loans, maximum simplification of lending conditions, and specific commitments on low interest rates. This is coupled with using the budget to support the program, increasing the loan term, ensuring at least enough cycles for businesses to invest and recover capital.

With the assessment that the social housing market is congested in both supply and demand, Dr. Tran Du Lich - member of the National Monetary Policy Advisory Council, said that to remove the supply, it is necessary to immediately create land funds for businesses to build housing, and have preferential tax policies.

On the demand side, it is necessary to remove procedures for buyers such as certifying that they are low-income earners and do not have a place to live.

Agreeing with the view that the State is responsible for providing housing for the people but not for housing ownership for everyone, Mr. Lich said that there should be a rental housing fund. Along with that, there must be a support mechanism from the State budget with an appropriate rate, for example, interest compensation.

The 8% interest rate in the 120,000 billion VND package is outdated, so it needs to be adjusted to match the average interest rate of 6.9% with a term of 20 years.

"Recommend that the Government submit to the National Assembly to allocate state budget resources to subsidize interest rates for four commercial banks participating in social housing policies and recapitalize the Vietnam Bank for Social Policies. At the same time, allow mortgages using social housing projects to borrow capital, and amend regulations that social housing projects for rent are entitled to tax incentives of up to 70%" - Mr. Le Hoang Chau - Chairman of the Ho Chi Minh City Real Estate Association, further proposed./.