‘Need land and credit incentives to develop low-cost rental housing’

At the seminar on growth drivers by Thanh Nien newspaper held on June 8, Ms. Hoang Thu Hang, Deputy Director of Housing and Real Estate Market Management (Ministry of Construction) said that this agency is completing a draft to amend the Housing Law and Real Estate Business Law, expected to be submitted to the National Assembly at the next October session.

According to Ms. Hang, the Ministry of Construction will research preferential mechanisms on tax, land and credit to attract maximum social resources, especially private capital, to participate in developing the rental segment. Thereby, workers, workers, officers, civil servants, public employees and the armed forces will have more opportunities to access accommodation at reasonable costs.

However, according to Ms. Hang, rental housing development is facing two major bottlenecks: capital and land fund.

Regarding capital, the problem lies in the rental price having to be low enough for workers to access, while the investor’s capital recovery period is very long.

“Very few investors want to spend a lot of money to collect small change. If they lease for 50 years, the rental price will be cheaper, but the payback period will also be longer,” she said. Therefore, according to Ms. Hang, businesses must have access to long-term loans with appropriate interest rates.

Besides, many localities still lack synchronization between housing development and social infrastructure such as healthcare, education, trade and services. According to Ms. Hang, if rental housing projects are located too far from residential areas or employment areas, it will be difficult to attract people to live.

The second shortcoming is the clean land fund. According to Ms. Hang, in localities there is still a lack of synchronous connection between housing infrastructure and social infrastructure such as healthcare, education, commerce… Therefore, the Ministry of Construction recommends that localities review planning and prioritize the development of rental housing in large urban areas, industrial parks and places with a large concentration of labor to ensure effective exploitation.

“If you invest in a densely populated place, there will be tenants. If you build in a deserted area, no one will live in it,” Ms. Hang emphasized.

In fact, rental housing development policies have been stipulated in the Housing Law 2023 along with housing for sale and housing for rent to buy. However, recent development of this segment has been limited, while demand is increasing due to the rapid urbanization process, especially in large cities.

General Secretary, President To Lam and the Prime Minister have directed localities to promote the development of rental housing. The Ministry of Construction is assigned to implement 3 groups of key tasks, first of all perfecting institutions and policies. The revised orientation is to shift from the mindset of mainly developing commercial housing to simultaneously developing commercial housing, social housing and rental housing.

In addition to developing rental housing, the Ministry of Construction is also coordinating with ministries to solve the real estate market to increase the supply of affordable housing.

Currently, the whole country has about 4,500 real estate projects facing problems with a total outstanding capital of about 3.3 million billion VND. To date, ministries and localities have resolved more than 1,000 projects, thereby unlocking nearly VND 800,000 billion in investment capital.

According to a representative of the Ministry of Construction, handling backlogged projects not only helps free up resources for the economy but also adds supply to the market, contributing to reducing house prices and improving people’s access to housing.