HCM City (VNS/VNA) – Ho Chi Minh City is expected to need an additional160,000 social housing apartments in the next decade to meet its risingpopulation and demand for affordable housing, according to thecity’s Department of Construction.

Thedepartment has asked the municipal People's Committee for approval ofa housing development master plan in the 2021-2030 period.  

The cityis expected to have a population of around 11.1 million by 2030, thedepartment said.

The cityplans to develop social housing, with a total floor area of fourmillion square metres for about 160,000 apartments. Of thefigure, it will need around 1.8 million sq.m of floor space from 2021to 2025, and 2.2 million sq.m of floor space from 2026 to 2030.

To achievethe targets, the city will ask investors of projects covering 10ha or more to set aside 20 percent of their land in each projectfor social housing.

The citywill also give priority to using the state-owned land fund tobuild social housing.

The housingmaster plan for the 2021-2030 period sets targets for all kinds ofhousing, totalling 295 million sq.m, withan average floor area per person of 26.5sq.m.

Apartfrom the targets set for social housing, commercial housing projects areexpected to have a total floor area of 45.2 million sq.m by 2030, including19.7 million sq.m for the period of  2021 to 2025, and 25.5 millionsq.m for the 2026 to 2030 period. 

The cityalso aims to have 59.2 million sq.m of floor area for the individualhousing segment by 2030.

To reachthe targets, the city will call for investment into developmentof housing projects under the form of public private partnerships (PPP)through promoting international cooperation, andproviding financial assistance.

Bottlenecks insocial housing 

The demandfor social housing in the city is huge, but the current supply isinsufficient for low-income earners. 

After asocial housing project of nearly 1,000 apartments for officials, civilservants and low-income people was built in Thu Duc district by Chuong DuongCorporation, for example, it sold quickly after construction wascompleted and then was released for sale.

According toVan Minh Hoang, general director of the corporation, there is highdemand for affordable apartments, but projects faceadministrative bottlenecks and limitations.

Theland area for new housing projects in the central areas hasbecome limited, while projects in suburban districts have faceddelays because of administrative procedures.

“Developingsocial housing is seemingly not of interest to propertydevelopers due to unattractive profits,” he said.

Le Huu Nghia,general director of Le Thanh Real Estate Company, said his company wasinterested in social housing, but it faced difficulties inconstruction-related administrative procedures.

He said ittook more than one year to complete procedures related to investmentpolicy decisions for the company’s Le Thanh Tan Kien Social Housing project inBinh Chanh district.

Similarly,Cho Lon Real Estate Joint Stock Company has been struggling for years withadministrative procedures for social housing projects in district 8.

Severalproperty developers have invested their own capital in social housing projects.They include Nam Long, Thu Thiem Investment, Thuan Kieu, Van Thai, Thien Phat,Sai Gon Res, Hoang Quan, Phu Cuong and Sai Gon Real Estate Corporation.

They alsohad to spend money to transfer land-use rights without anysupport from preferential credit policies.

Le Hoang Chau,Chairman of the HCM City Real Estate Association, said that shortcomings insocial housing policies existed.

“The biggestproblem is that the State budget has not been used forallocating funds to implement social housing projects,” he said.

Concessionalloans for social housing developers and buyers are still limited,according to the chairman. They are forced to borrow loans fromcommercial banks at high interest rates, which makes it more difficult for thebuyers to repay bank loans.

Cityauthorities need to identify the problems and then develop solutionsfor social housing so as to meet the rising demand for affordablehomes among low-income earners./.