Ho Chi Minh City

HoREA suggests housing policies for low-income households

The Ho Chi Minh City Real Estate Association (HoREA) suggested housing policies relating to transparent property growth to meet low-income city-dwellers’ increasing demands.

HoREA suggests housing policies for low-income households

The city has nearly 13 million residents including three million immigrants. Average population increase rate is 3.5 percent annually. Every five years, the city population surges around one million people; accordingly, urbanization intensifies the need for city-focused housing.
As per the municipal Department of Construction, HCMC is currently facing an urban housing backlog of about 134,000 housing units from 2011-2020.
For the period 2016-2020, 81,000 households are in demand of buying social house, according to the HCMC Institute for Development Studies (HIDS)’s study.
Of these, over 10,000 are state employees while 39,000 poor and near-poor households want to buy new houses. More than 17,000 laborers in industrial parks are also in the need of social houses.
City authorities are implementing 39 social housing projects comprising of 44,701 apartments. As per the plan, by 2020 , the city will complete construction of 20,000 apartments yet it will just meet a fraction of the demand.
In 2017, 92 commercial housing projects including 42,991 apartments were sold; however, around 12,495 cheap apartments were sold last year. It is clear that small cheap houses are not satisfied low-income dwellers’ buoyant demand of housing.
Additionally, the city is in short of social houses especially social house for rent. There has been no commercial housing projects at cheap price of VND300-500 million nor no commercial housing projects for rent at inexpensive price.
Asides from that, some 14,366 houses and resettlement houses are vacant; local governments should switch it into social houses or commercial houses to sell in order to return fund for state budget.
To solve the problem of houses for average incomers and poor dwellers, HoREA proposed property developers to re-structure investment and switch to build more cheap and environmentally-friendly housing projects with utilities and services at the price of around VND1 billion.
Moreover, HoREA suggested developers to take part in building social housing program, building old condominiums and urbanization renewal program in slums in rivers and canals.
According to HoREA, People’s Committee in HCMC should petition to the National Assembly and the government to provide loans for those who register to buy or rent social houses at preferential interesting rate of 5 percent a year as per the Prime Minister’s decision.
Furthermore, if possible, HoREA expected that housing developers can borrow preferential loans for social housing projects to reduce cost according to the Housing Law 2014. Also, HoREA wished improved administrative formalities to assist developers.
For instance, Le Thanh housing developer of social housing project in Binh Tan District’s An Lac ward has been certified as project investor but because of hinders in administrative formalities, the company has not been eligible for a preferential loan.
In addition, city authorities should have special mechanism for housing developers of rental apartment at cheap price of VND3 - 5 million a month to encourage them to build these houses aiming to catch up with the new trend of co-living space nowadays.

By DO TRA GIANG – Translated by UYEN PHUONG

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