More than a million low-income homes to be built by 2030

The project aims to develop affordable social and worker housing in urban areas near industrial parks and export processing zones.

The State encourages economic components to develop affordable housing to provide conditions for everyone to have a place to live under market mechanisms.

By 2030, the total number of completed dwellings in localities will reach about 1,062,200. Of these, about 428,000 will be completed by 2025 and 634,200 by 2030.

A social apartment building in Đình Hoà, Thủ Dầu Một, Bình Dương — VNA/VNS Photo Chí Tường

Housing construction areas properly defined

To promote the development of social housing and worker housing, the Ministry of Construction proposes some solutions, including improving the legal framework for social housing for low-income people and workers in industrial zones.

The ministry will study and develop a draft resolution of the National Assembly to pilot policies to promote social housing development and revise the Law on Housing 2014 to be consistent with the revised Law on Land, the revised Law on Bidding, tax laws, and guiding legal documents, including revising mechanisms and policies on social housing.

Regarding allocating land for social housing and worker housing, the ministry proposes amending and supplementing regulations on land for social housing development.

When formulating and approving urban planning, rural construction planning, industrial park development planning, and research and training areas planning, the competent People's Committees must identify the land area for social housing development within the provincial and district-level areas.

The land fund for social housing development must be suitable for each period's local planning, land use plan, and development programme.

The social housing development target is considered an economic and social development target for each locality for five years or annually.

The ministry also proposes supplementing regulations on planning and land allocation for worker dormitories.

When formulating and approving industrial park planning, the land fund for worker dormitories, service buildings, and public utilities serving workers working in those industrial parks must be allocated within the commercial service land area of the industrial park.

Regarding the credit for social housing development, it is important to identify the investment in social housing development for low-income workers as an investment category in the long-term capital sources of the locality.

Amendments and supplements should be made to regulations on funding sources for housing development through new funding regulations.

This will optimise current funding sources to limit dependence on state budget funding, supplement the mobilisation of capital from local development investment funds for social housing development, limit the use of state budget funds for infrastructure development by the provisions of the Public Investment Law, and mobilise foreign capital for social housing development.

Huge credit programme planned

The focus is currently on coordinating with the State Bank of Vietnam to implement a credit programme worth around VNĐ120,000 billion (US$5.15 billion) through specific credit packages for investors and homebuyers.

The interest rates are about 1.5-2 per cent lower than the average long-term VNĐ loan interest rates of state-owned commercial banks (including Agribank, BIDV, Vietcombank, Vietinbank), as directed in Resolution No. 33/NQ-CP dated March 11, 2023, of the Government.

The selection of investors in social housing construction projects is encouraged to be socialised, and the regulations on the selection of investors in social housing construction projects are amended and supplemented in a uniform and consistent manner with other relevant laws (investment, public investment, construction, land, and bidding).

The selection of social housing project investors is encouraged to promote the socialisation of investment. Amendments and supplements should be made to regulations on selecting social housing project investors in a unified and coherent manner with other related laws (investment, public investment, construction, land and bidding).

Supplements should be made to regulations on the selection of investors for workers' dormitory construction projects in the direction of enterprises that are assigned to do business in industrial zone infrastructure and simultaneously act as investors in the construction of infrastructure for workers' dormitories.

After investing in the infrastructure of the workers' housing area, investments can be made in building dormitories or transferring the land with infrastructure to the Provincial Industrial Zone Management Board for transfer to the Vietnam General Confederation of Labor or production enterprises in the industrial zone or enterprises with the function of housing business to invest in building dormitories for workers.

More benefits for investors

Amendments to regulations on incentives for investors are more substantial, focusing on the 20 per cent of commercial land area in social housing projects, which is to be accounted for separately, not jointly with the entire project, and allowing for reasonable and legitimate costs incurred during investment and business operations of social housing to be included in the cost.

Amendments to the Value Added Tax and Corporate Income Tax laws allow for a higher reduction in value-added and corporate income tax for investors in social housing rental projects than those for social housing projects for sale or lease purchase.

Amendments to regulations require that at least 20 per cent of the area in social housing projects be set aside for rental. The developer is only allowed to sell the remaining units after five years of use, with the option to choose the business plan (sale, lease and lease purchase) at their discretion without being required to allocate the housing fund for rent.

Policy beneficiaries revised

Regarding the beneficiaries of social housing policies, employees are now separated into groups; workers, labourers, experts working in enterprises in industrial zones, clusters, export processing zones, and high-tech zones and production enterprises in industrial zones, with separate mechanisms and policies to develop housing types for workers to rent.

Regarding solutions for implementing social housing projects, ministries and agencies will continue to review existing problems, identify causes, and propose solutions.

To ensure the target of social housing development by 2030, about VNĐ849.5 trillion (US$36.1 billion), mainly from public-private partnership capital, is needed to complete 1,062,200 social housing and worker housing units by 2030.

It will be necessary to focus and prioritise credit for lending to social housing and worker housing projects to ensure social welfare.