Solving the paradox: "Excess houses, lack of accommodation"

Vietnam's housing market is facing many unreasonable points: Apartment prices are increasing rapidly, social housing projects are "standing still" while tens of thousands of resettlement apartments are abandoned. Tin Tuc reporters discussed this issue with lawyer, master - real estate legal expert Pham Thanh Tuan.

Dear expert, there are too many unresolved issues that cause social housing projects to continue to “wait and see”. The price of old apartments is increasing, tens of thousands of resettlement apartments are abandoned while workers are “thirsty” for accommodation with low rental costs. What do you think about this unreasonable situation?

There has long been a paradox in Vietnam's housing development: while resettlement housing is abandoned and waiting for people to move in, many people are tired of looking to buy social housing and affordable housing for workers.

In fact, the supply of social housing has been scarce recently. Many people have had to stay up all night to line up to apply for social housing. Many people have to rent houses and live in spontaneous "apartments" that do not meet fire safety conditions. In fact, near my house, there is a resettlement building that was built a long time ago but no one lives there. This area only has lights when it is used as a quarantine area for people infected with COVID-19. After the pandemic, everything returned to the way it was before, almost deserted. This is a huge waste of land resources.

According to the authorities, in Hanoi and Ho Chi Minh City alone, there are about 18,000 abandoned resettlement apartments, causing a huge waste of land resources and public assets. According to experts, should we consider the option of converting unused resettlement apartment funds to social housing?

In fact, the plan to convert some unused resettlement housing funds into social housing has been considered by the authorities but still faces many difficulties in implementation.

At point a, clause 1, Article 124 of the Housing Law 2023 stipulates the conversion of functions from resettlement housing to social housing. This is the legal basis for competent authorities to consider converting unused resettlement housing projects to social housing. However, this conversion will cause many problems. Because when participating in a specific consulting case, I clearly felt that this is really a difficult problem from many aspects: Adjusting legal procedures, design or obstacles from the locality.

The first problem when converting the function of the abandoned resettlement housing fund to social housing is that the legal procedures are not simple. The starting points of these two types of projects are different, so the legal procedures and design standards are also different. When converting the function, the authorities must adjust almost all of the project's legal procedures. Even the 2023 Housing Law (Article 49, Clause 6) requires that housing construction projects serving resettlement must be established and approved as separate projects, not mixed projects with other types of commercial housing and social housing.

Regarding design according to current regulations, the maximum design area for social housing apartments is only 70 m2. Meanwhile, resettlement housing - because it can be used to compensate multi-generational households, is not limited in area. Resettlement apartments larger than 70 m2 cannot be converted into social housing. Renovation to divide into smaller apartments will be very complicated because the Law does not stipulate cases of adjusting the design of completed apartments. The option of converting to social housing in the "xoi do" style (ie apartments with suitable area will be converted) has also been considered but causes difficulties in management and operation.

Even if the legal issues are “resolved”, the psychological factor of the people with resettlement housing is another barrier. Many resettlement projects have problems with construction quality, which reduces the value of resettlement apartments. Many resettlement areas lack basic infrastructure such as schools, hospitals, markets, internal traffic, reducing the quality of life and convenience for residents. That has affected the psychology of the people who do not trust the quality of resettlement housing. If the problem of degraded housing is not renovated and overcome, it will be difficult for people to “dare” to live in such poor quality houses when changing their functions.

In addition, I know that some localities do not want to convert the resettlement housing fund to social housing. Localities want to maintain the resettlement apartment fund even though it is of low quality because they want to have a resettlement housing fund available when compensating and resettling in the area. If the locality does not have resettlement housing available, it will take 2 to 3 years to create a new housing fund or have to buy back commercial housing at a high price. Buying commercial housing for resettlement must be at market price, ensuring that it is suitable for the needs of resettlement arrangements in the area.

So according to legal experts, how to avoid the situation of “having a house but no one living there”? According to him, developing boarding houses and rental houses is the key solution for big cities like Hanoi and Ho Chi Minh City to relieve the “thirst” for housing for people, in the context of social housing still sluggish.

To overcome the situation of “people looking for houses, houses looking for people”. People looking for houses are looking to buy social housing, affordable housing. And houses looking for people are settlement houses looking for people to live in. Solving the housing problem is a complex issue in many countries, especially developing countries like Vietnam.

In the immediate future, we can consider the following options:

First: Authorities should review and work closely with localities on the needs and current status of resettlement housing, avoid the situation of keeping vacant houses, not knowing when they will be needed, and then improve the quality of unused resettlement housing funds and transfer them to social housing. Social housing is for low-income and middle-income people. If this is done, it will help achieve two goals: both freeing up land resources to avoid waste and ensuring the supply of social housing for those in need, ensuring social security factors.

Second: The development of boarding houses should be viewed as a solution to the situation. Boarding houses invested and developed by individuals are often of poor quality, located in cramped areas, and have difficulty meeting fire prevention and fighting standards and ensuring environmental hygiene. However, this is a reasonable source of supply for the poor, students and pupils. Therefore, the government and relevant agencies need to carefully review the issue of fire prevention and fighting to ensure safety for users.

In the long term, the key solution is to develop social housing for low-income earners, students, and workers in urban areas. Only when these groups of residents have suitable housing will the "matchbox" type of real estate no longer have a chance to exist. This is an effective solution but not easy to implement due to lack of financial resources and legal problems.

Thank you very much!