VietNamNet Bridge – Administrative hassles have hampered the progress of a social housing programme to provide accommodation to low-income earners in HCM City, industry insiders say.

Officials double-check smuggled goods at Huu Nghi border gate with China in northern Lang Son Province. Authorities at border gates are tightening controls to prevent smuggling and fake goods during the lead-up to Lunar New Year. (Photo: VNS)

It was not until 2009 when the real estate market had lost steam that the programme was restarted, but it proceeded at a sluggish pace.

Le Hoang Chau, chairman of the HCM City Real Estate Association, said that all of the projects under the programme had been registered but yet to be implemented, and it was problems related to the policies to blame.

Dat Lanh Real Estate Co's deputy director Nguyen Van Duc said the administrative procedures that accounted for 50 per cent of the low-income housing prices were overly cumbersome and had significantly obstructed the programme's pace.

He said his company had been one of the pioneers to join the programme, having built several apartment blocks and residential areas for low-income earners in different city's districts.

The company was undertaking an apartment block project with the Ministry of Construction having approved two-person 20-45 sq.m mini-apartments.

Another project, which is in the pipeline in Go Vap District, was facing hurdles involving investment procedures and licensing, Duc said.

Councillor Dang Van Khoa said for the time being it was essential to develop housing projects for the city's low-income earners.

Khoa however noted that municipal authorities merely planned to carry out State incentive policies, such as tax exemptions and reductions, and subsidised interest rates.

Around 30,000 houses for low-income earners are needed every year, according to property experts.

Khoa said that developing housing for low-income earners must be a top priority for the State without whose co-ordination, the programme would not yield results.

He said city government should be directly involved in organising and calling for investment, and implementing the programme.

To tackle current difficulties faced by investors participating in the programme, Khoa said the city administration must make a ground-clearance land fund available to the programme's investors.

He said the city could retrieve and hand over to the programme's investors hundreds of hectares of public land currently leased by businesses to develop social housing projects.

For prime locations, municipal authorities could retrieve land and put under auction, the proceeds from which would be to create a new land fund to be used by investors.

Experts said that the availability of a cleared land fund would accelerate the implementation of social housing projects, and make unit prices more affordable to low-income earners.

Capital issues emerged as another hurdle to investors, since none had been able to borrow capital at preferential interest rates to develop social housing projects, Khoa said.

Although the Ministry of Construction had asked the Ministry of Natural Resources and Environment to guide localities about issuing land use certificates to investors involved in low-income housing to access bank loans, the solution remained impractical, he added.

Chau of HCM City Real Estate Association said focus should be given to social housing projects that could be leased out on a long term at a reasonable price.

City government would co-ordinate or directly invest in these projects with businesses being the co-implementer of the project.

Deputy Construction Minister Nguyen Tran Nam said that low-income housing currently sold for 8 to 10 million dong per square metre (US$400-500) and each unit measured 50 to 60 sq.m.

Nam said the above price remained beyond the reach of low-income public employees.

VietNamNet/Viet Nam News