Hanoi (VNS/VNA) - Theuptake for social housing in Hanoi has been disappointingly low due toindifference from the intended target customers.

According to official statistics, bythe end of 2018, Hanoi’s population stood at 9.6 million – including those fromother localities residing long-term in the city. The World Bank said 60 percentof this figure fall into the middle and low-income groups, with real demand fordwelling spaces.

Even with the preferential loanrates and other support policies from the central government and localauthorities, not everyone can afford to buy out social housing apartments andit’s expected that these people would opt to rent these low-cost apartmentsinstead. However, the backlog of vacant rental apartments continues to grow in Hanoi.

Investors in the city are gettingincreasingly anxious as the bleak situation persists despite numerous openbiddings, while they still had to pay bank interests and the apartmentsdeteriorate from sitting empty.

As per regulations, social housinginvestors must allocate some 20 percent of their apartments or homes in theirprojects for rental.

The Bamboo Garden project in therural district of Quoc Oai, for example, has 432 social apartments – 346 forsale and 86 for rent.

The municipal Department of Constructionofficially started to receive applications for purchase and rental at theproject since October last year but after 15 biddings, there has not been asingle customer interested in renting an apartment at the project despiteattractive price tags of 66,000 VND (2.85 USD) per sq.m per month.

The Phu Lam social housing projectin Ha Dong district is also struggling to deal with the burden of 384 emptyrental apartments.

According to the Department ofConstruction, the city plans to have 6.3 million sq.m of social housing by2020.

By now, from nine completedprojects, 43 underway and the 20 percent of area reserved for social housingfrom 58 commercial projects in the city, the city has 4 million sq.m for socialhousing and the fear is growing that the area reserved for rental in thisfigure is going to waste.

Despite the expenses andresponsibilities that come with purchasing a home outright, the mindset ofhomeownership still prevails in Vietnamese society, even among the youngergeneration that has not yet achieved financial independence, experts said.

Another reason, probably the rentalfee, might not be as attractive as it seems.

Bui Hong Anh, a public servantworking in Dong Anh district, said that if he was to rent an apartment for hisfamily over 40 years, the rental fee would total 1.2-1.5 billion VND, equal tothe price of a social housing apartment. So, he decided to get a bank loan andbought a home instead.

Nguyen Tran Nam, Chairman of the VietnamReal Estate Association (REA) and former Deputy Minister of Construction, hasrecently called for a shift public perception from having to ‘own a house’ to‘having a place to live’.

The location of the social housingprojects is also a concern.

Clustered mostly outside theexpensive centre of Hanoi, the social housing projects may boast affordableprice tags even to low-income groups but ultimately the long commute betweenhome and work on the frequently congested Hanoi streets rendered this advantagea moot point. On the other hand, there are too few affordable housing projectsfor low income groups in the areas packed with companies, manufacturers ororganisations’ headquarters.

Tran Ngoc Hung, Chairman of the VietnamFederal Association of Civil Engineering, stressed the importance of a place tolive as a concept that encompasses not just the house, but also the surroundingenvironment, traffic connectivity and numerous other social and servicesfacilities like schools, markets, or hospitals.

“Had these elements proved wanting,no one would like to come and live,” Hung said.

A representative from an enterprisethat has invested in several social housing projects in densely populateddistricts of Long Bien and Hai Ba Trung told Vietnam News Agency thatthe current rigid policies are hampering the investors’ business and asked formore flexibility, allowing investors to repurpose the unused rental apartmentsto allow for more people to buy them.

Nguyen Manh Ha, Vice Chairman ofREA, said that in the Republic of Korea, poor citizens incapable of rentingsocial housing apartments would be entitled to schemes that allow them to rentthese places for 30 percent lower than the market price, while those with morefinancial capacity would have their rental fees cut by 15-16 percent.

For the middle-income groups, thegovernment would give them preferential lending rates that enable them to buy thehouses outright, Ha said.–VNS/VNA