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Social housing now in vogue
Social housing projects are getting renewed attention as a way to give the economy an important boost.
The Ministry of Construction (MoC) estimated that at least 30 per cent of two million state employees and their families and at least 20 per cent of industrial park workers did not have stable accommodation. This did not take into account thousands of other families living in below-standard accommodation in urban areas.
Given current average property prices, a low-income earner finds buying a decent house difficult. According to the MoC, direct government financial support for house buyers, indirect support in the form of incentives and regulations for construction enterprises and direct housing construction are key solutions.
Each solution has its own pros and cons. However, experts said that given the current market situation, there could not be a breakthrough in the cheap housing market unless the government took the lead by investing directly in social housing projects.
“It is not easy to solve this social issue by market mechanisms alone, as profits are not attractive,” said Nguyen Minh Phong of the Hanoi Institute of Socio-economic Development Studies. “Therefore, the government must be the conductor for the development of the social housing fund and market.”
The government’s role spurred much discussion in the past, but recently more concrete steps have been taken to boost actual development. Most significantly, the prime minister recently decided to issue VND4 trillion ($224.7 million) worth of bonds to build 200,000 houses, half in Hanoi and half in Ho Chi Minh City.
In Hanoi, many social housing projects have received extra support from the government. The Hanoi Office of Construction has been conducting a trial social housing project for the 2007-2010 period, including 800 apartments in Long Bien district costing VND250 billion ($14 million) and 864 apartments in Dong Anh district costing VND444 billion ($25 million).
Only seven buildings with a total of 336 apartments, in Long Bien district have been completed and leased out to four enterprises to provide accommodation to their employees. The Hanoi Office of Construction expected that with new support from the government, 24 out of 26 buildings in the project will be completed and leased out by the third quarter of this year.
Meanwhile, new projects have also been announced. The Housing and Urban Development Corporation (HUD) said it registered with the MoC to join the social housing development programme. Its trial project will take place in the Thanh Lam New Urban Area in Me Linh, Hanoi, with a target of over 4,000 low-cost apartments, measuring 45-65 square metres each.
Vinaconex also requested loans from the government’s 2009 stimulus package to deploy six social housing projects across the north and central parts of the country. These include 13 buildings with seven 11 floors each in Nha Trang, six buildings with five 11 floors each in Thach That, 800 apartments in Chuong My, Hanoi and three small projects in Hanoi, Vinh Yen and Vinh.
In Ho Chi Minh City, for past few years, 99 social housing projects started on a total area of 425 hectares, including over 37,000 apartments and houses. Some 28 projects have been completed, providing over 5,600 apartments for low income earners. The city authority said it would boost the social housing fund substantially from this year through 2015, with 18 new large projects expected to buildmore than 300,000 apartments and houses.
“The strong implementation of the government’s social housing programme across the country will bring a significant boost to the construction market as well as the general economy,” said MoC’s deputy minister Nguyen Tran Nam. “The construction materials market, for example, has struggled during the first months of this year, posting no growth over the same period last year. But with social housing projects booming, I expect that the market will see substantial improvements in the coming months,” he said.
According to the MoC, at least 10 million sqm of social housing will need to be built in next six years to ease the demand for accommodation. The MoC estimates that the construction of just 500,000 sqm of social housing floor will consume 120,000 tonnes of cement and 30,000 tonnes of steel, and generating thousands of jobs in the construction sector.
VietNamNet/VIR
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