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Low-income housing faces attrition
The national low-cost housing programme could fail as investors can't get sufficient support from local authorities and banks.
Difficulties accessing capital, high interest loans, lengthy procedures and land shortages are some of the problems investors are struggling with.
The Government programme that has just finished its first year has had a very slow start. It has started 37 projects nationwide, but has provided less than 1,000 families with low-cost apartments to live in.
Meanwhile, 189 registered projects, designed to provide over 166,000 apartments for 700,000 people by 2015, need VND28.5 trillion (US$1.25 billion) in capital.
Furthermore, the Construction Ministry's National Housing Development Strategy plans to build 60,000 low cost apartments a year for 10 years to make a total of 600,000. Many experts doubt the target.
"Getting the master plan for our project approved took three years. When we came to banks, all of them refused us as they knew we build low-cost apartments," said General Director of Song Da – An Nhan Joint Stock company Le Thi Lieu Nhan, who is still looking for VND600 billion ($28 million) to construct 920 apartments.
"It takes us six years to complete one project, making it very difficult for companies that join the programme," said Nguyen Van Duc, Director of Dat Lanh Real Estate company.
Nguyen Tan Ben, Director of the HCM City's Construction Department said that the State budget for low-cost housing was limited and there was no budget to get vacant land to build on.
"It's hard to encourage businesses to join the programme because its not economically efficient," Ben said.
"The Government should consider using public land for the programme," Le Hoang Chau, Chairman of HCM City's Real Estate Association, said.
He pointed out there were thousands of hectares of public land going to waste that real estate companies could use.
vietnamnews
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