Unlocking the supply of Social Housing

The new regulations under Decree No. 100/2024/ND-CP include several provisions that “ease difficulties” and encourage businesses to develop social housing projects.

Addressing the shortage of land funds

Article 83 of the 2023 Housing Law provides more specific regulations on allocating land for social housing development, addressing the shortage of land funds for this segment in recent years. Specifically, the 2023 Housing Law includes a provision that requires provincial People's Committees to allocate sufficient land for social housing development according to the province's approved housing development program and plan.

Decree 100 expands on Clause 2 of Article 83 of the 2023 Housing Law, directing provincial People's Committees to decide whether investors in commercial housing projects must allocate a portion of the land area within their project where technical infrastructure has already been built for social housing construction, or allocate land for social housing with built technical infrastructure elsewhere outside the project area. Alternatively, investors can pay a sum equal to the value of the land plus developed technical infrastructure for social housing buildings in special, first, second, and third-class urban districts, subject to government restrictions that assure ease of implementation.

The process of carrying out investment procedures for social housing projects has also been significantly shortened, helping investors save time and costs in project execution. According to the new Housing Law, effective from August 1, investors are no longer required to determine land prices, calculate land-use fees, or apply for exemptions from land-use fees and rent, as these are automatically exempt.

Additionally, Clause 2 of Article 22 in Decree 100 specifies in detail the components that constitute the total construction cost of the social housing area. This serves as the basis for calculating the maximum profit, which is 10% of the total construction cost of the social housing area, according to the 2023 Housing Law. Investors can also generate additional profits from commercial service buildings and commercial housing, which can occupy up to 20% of the total residential land area within the project, where technical infrastructure has been developed.

Regarding the selection of investors for social housing construction projects through bidding, Clause 5 of Article 21 in Decree 100 clearly stipulates the criteria for evaluating the capacity and experience of investors involved in social housing projects.

Relaxed purchase conditions

Decree No. 100/2024/ND-CP also specifies the conditions for beneficiaries to access social housing support policies, making it easier for those in genuine need to access this type of housing.

Specifically, Clause 1 of Article 29 in Decree 100 stipulates that individuals without ownership of their own home are defined as those, as per Clause 1 of Article 77 of the Housing Law, and their spouse (if any), who do not have their names on the Certificate of Land Use Rights or the Certificate of Ownership of Property Attached to Land in the province or centrally governed city where the social housing project is located at the time of applying to purchase or lease-purchase social housing.

This means that individuals covered under Clauses 1, 4, 5, 6, 8, 9, and 10 of Article 76 of the Housing Law, who do not own homes in the province or centrally governed city where the social housing project is located, are eligible to purchase, lease-purchase, or rent social housing. Besides specifying eligibility, the new law removes certain provisions that caused difficulties for both state management agencies and citizens, such as the term "no home ownership by the household" or the restriction on homeownership within the province where the project is located.

Therefore, individuals wishing to purchase social housing while living with their multi-generational family will not need to go through the trouble of splitting their household registration to obtain confirmation from authorities that they do not own a home. Government authorities now have a legal basis for implementation without hesitation, reducing concerns or reluctance among local officials regarding the verification of citizens' homeownership.

The Vietnam Association of Realtors (VARS) believes that these new regulations are “reasonable and compassionate,” aligning with the expectations of businesses and the public, especially middle-income citizens who pay taxes to the state.

These new regulations will also encourage investment in the social housing sector, partly addressing the dual problem of shortage and surplus in this housing segment, especially in provinces and cities closely connected to industrial zones with a large number of migrant workers. This ensures social welfare, improves living standards, and promotes comprehensive socio-economic development across the country.