Social housing paradox: High demand - low supply, why? –Part 3: "Gold" land not for social housing

	The social housing paradox: High demand - low supply, why? – Part 2: "Gold Mine" neglected?
	The social housing paradox: High demand - low supply, why? –Part 1: Buying a social house: Like dry fields waiting for water! There are policies, pri

Many social housing projects have difficulties in selling because they are far from the city center. Photo: ST

Slump because they are far from the center

Mr. Vu Van Phan, Deputy Director of Housing and Real Estate Market Bureau (Ministry of Construction), said: “Previously, many social housing projects were built by enterprisesor built in remote areas without infrastructureattached, so the “slump”is understandable.”

In fact, there are projects with full facilities and reasonable prices, but the location is too far from the center.

If the speed of consumption in some social housing projects deployed near the center is very quick, on the contrary, many projects due to inconvenient locations have to open to sell from time to time.

For example, the Rice City project in Western Sounth Linh Dam urban area, the Dai Kim social housing project (Hoang Mai district), all of the apartments in these projects were bought as soon as they were offered.

Even with good construction quality,full infrastructure and facilities, near the school and market,apartments at the Rice City social housing project are still "hot" and still being offered for sale with the price up to VND22-24 million per m2 depending on the apartment, VND8-9 million per m2 difference from the original price of this project (nearly VND15 million per m2).

Meanwhile, many social housing projects have faced difficulties when consumption is slow,even if the selling price is suitable for low-income people.

The Bamboo Garden project of CEO Group's investor is a testament to this fact.

According to the representative of the investor, the implementation of the Bamboo Garden social housing project is in compliance with the regulations on spending 20% ​​of the land fund of the urban area project to develop social housing. This project consists of two buildings with nine floors and a total of 432 apartments, of which there are 346 social housing apartments for sale, 86 social housing apartments for rent, area ranging from 48m2 to 66m² per apartment, and with the selling price of less than VND10 million per m2,buyers only need about VND500 million to own an apartment in this project.

Especially,being built within the Sunny Garden urban area project,Bamboo project enjoys the entire synchronous technical infrastructure system and utilities of this urban area such as kindergartens, schools; shopping mall; sports and entertainment center; public parking, green area.

Despite the many advantages, this projecthas fallen into a slump for many years because it is too far from the city center.

Built in Sai Son commune, Quoc Oai district, Hanoi, Bamboo project is 20km from the city center and 1km from Thang Long Avenue.

Being opened for sale at the time when home buyers are still supported with interest rate support of preferential credit packageof VND30,000 billion, Bamboo Garden is still not attractive enough as urban projects at the same time, despite the selling price of the apartment near the center is around VND15 million per m2.

As of early 2020, Bamboo Garden has more than 20 times opened for sale,but still 24 apartments have not been sold, while a number of apartments for rent havenot yet been rented.

Recently, the representative of this enterprise said that the work related to this social housing project has been finished.

A similar case in Hanoi is The Brighsocial housing project. Built in Lai Xa village, Kim Chung commune, Hoai Duc district, with a scale of 1,496 apartments with an area of 44-70m2, by the beginning of 2020, this project opened for sale for the 12th time. This project only sold 500 units. Another project is the Phu Lam social housing project, built in Ha Dong district, because it is quite far from the center, and this project opens for sale when the package of VND30 trillion ends, so the sale and lease of apartments in this project faces many difficulties.

Need to auction"gold" land, creating fund for development of social housing

It can be seen that the project location is one of the weaknesses of social housing.

Along with the location, asynchronousutilities and infrastructure, lack of connection are also the reasons why social housing is not attractive. In 2016, during a visit to the Dang Xa social housing area (Gia Lam), the Dang Xa social housing area was not too far from the center, with good quality, well done in planning and design stages. It had a full cultural institution, reasonable price, good infrastructure and space. Prime Minister Nguyen Xuan Phuc said that localities need to learn and implement this model to overcome the shortcomingsin social housing investment.

However, according to the assessment, this problem has not really been overcome, especially in the context since 2016, the development of social housing has faced many difficulties. Recently, the Ministry of Construction said that difficulties and problems related to the land fund for social housing development stem from the fact that many localities did not pay attention to reserve land for social housing development when organizing formulation, appraisal and approval of master plans, land use plans, urban planning, industrial zone planning.

There is a fact that some localities are too easy to accept investors of commercial housing projects, new urban areas with land use of less than 10 hectares to pay in cash instead of requiring land fund or housing fund for social housing in the project. Or some localities are are easy to accept the project investor's proposal to report to the Prime Minister for permission not to reserve land fund for social housing in commercial housing projects, urban development projectswith land use scale of 10 hectares or more in urban centers of grade 3 or more. In addition, most localities have not yet paid attention to supporting social housing project investors in allocating funds for investment in the construction of technical infrastructure inside and outside the fence of social housing projects from local budgets.

Talking to Customs News, Mr. Nguyen Van Dinh, General Secretary of the Vietnam Real Estate Brokerage Association, once emphasized that itwas very difficultto develop social housing in the inner citybecauseconstruction and compensationcosts were very high, while housing prices as well as the profit margin of social housing were controlled according to regulations.

However, the representative of the Vietnam Real Estate Brokerage Association also acknowledged the fact that social housing projects were far from the center, lacking infrastructure, with low incomes,buyers did not have their own cars to travel, so they had to movetoo far for work as well as taking children to school.

Accordingly, Mr. Nguyen Van Dinh said thatfirst of all, it was necessary to encourage investors of commercial housing projects to fulfill the obligation of supplementing social housing funds.

In terms of land fund, there is a fact that in the inner city, there is no priority for social houses, but mainly for commercial houses, because social houses are labeled "houses for low-income people", many localities or investors default to building far from the center to reduce costs.

Meanwhile, the land fund is created from the relocation of industrial facilities and schools has not been given priority to social housing projects. With shortcomings when using public land for social houses, Mr. Le Hoang Chau, Chairman of the HCM City Real Estate Association,said: “The public land fund including factory land in the inner city is subject to move;head offices of State agenciesdo not needto use; farm land; reserve land.

“These land funds can be used to set up a social housing project if planning is appropriate, or if not, auction for making a budget source to create a land fund for social housing development.For land in prime locations, the best method is to auction to have large revenues for the state budget to create a larger land fund for social housing projects.”

Regarding this issue, the Ho Chi Minh City Real Estate Association has asked Ho Chi Minh City to approve the planning of social housing development areas and also the low-cost commercial housing development area to form affordable housing for low-income people. Accordingly, these housing areas must ensure construction quality, have many utilities, services, trade, entertainment, near hospitals, schools, have a reasonable distance to work and be convenient transportation connection, to attract people to live.

Regarding the land fund for social housing, Decree 100/2016/ND-CP on the management and development of social housing is currently being studied and revised to overcome the shortcomings that have hindered the development of this segment. Accordingly, regulations on the arrangement of land funds for social housing will be revised with the aim of ensuring the planning and arrangement of public land funds as well as land funds in independent housing projects invested by owners of social housing projects.