Deputy Minister of Construction Nguyen
Tran Nam talked with Viet Nam News about social housing and the establishment of
a housing fund for future projects.

Social housing projects have
faced difficulties in accessing preferential loans from the Viet Nam Development
Bank (VDB). What solutions has the ministry taken to resolve the problems?

We currently have over 200 registered
social housing projects while our capital sourcing remains limited. We therefore
should prioritise projects in major urban areas. The ministry in collaboration
with the VDB has initially chosen 44 projects.

This is something of a new
approach, as we’ve mobilised capital from various sources, including commercial
banks and businesses. The projects have been also offered preferential policies
from the State.

Shortcomings and difficulties were
unavoidable as this was the first time we carried out such a project.

However, with the support of the bank and
the ministry, meetings have been held with enterprises and we’ve solved some
difficulties in accessing loans. The VDB is committed to providing loans with
preferential interest rate to the projects next year under Prime Ministerial
Decision No 18.

The first VND391 billion (US$18.6 million)
loan has been made to the Viet Nam Glass and Ceramics for Construction (Viglacera)
to build 1,000 social housing units in Ha Noi’s Gia Lam District. Several
projects in the central and southern areas will also be offered loans. VDB has
informed to all its branches nationwideministry. to receive applications
for loans without needing to seek permission from the ministry.

The ministry has proposed that the
Prime Minister extend preferential taxes due to the successes of 2010. What are
your views on the situation?

In the long-term, social housing projects
in urban areas have been given preferential policies, including land use fee
exemptions, and VAT and corporate tax reductions. It means that land users have
received preferential loans from the VDB, increasing the pace of construction
and shortening procedures. As for taxes, the PM has to have the discounts agreed
by the National Assembly. The law stipulates that the PM is able to decide VAT
and corporate tax exemptions for some investment sectors but for only one year.
The Construction Ministry therefore has submitted a proposal to the PM to
extend the policies.

Is this necessary to modify the
regulations that stipulate that a minimum area of 30 square metres per house is
required, despite there still being a huge demand for housing, particularly
among the low-paid?

Statistics from the National Population and
Housing Census last year showed that families in Viet Nam are declining in size,
which follows social development trends. The scale of apartment size was
previously based on 4.4 people per household while the rate last year was 3.8
people. This trend is set to continue as large families are likely to be divided
into smaller households with only one child, along with an increase in single
households. Viet Nam has targeted an average area of 20 square metres per capita
by 2015. Small houses would be suitable for families consisting of one or two
people, and would match people’s earnings.

However, houses are not only used for
living, but also perform a cultural and historical role. They can’t be too
small.

Some countries have successfully
developed a housing fund. Do you think that such a fund would be feasible in
Viet Nam?

The State Budget for the projects is
limited, while the demand for housing has been urgent, especially among
low-income earners. Along with preferential policies from the Government,
low-income earners should have the responsibility in acquiring their houses
themselves. Targets on social housing can only be completed if there are
co-operation between the State and people. The poor could contribute a part of
their monthly incomes to the fund. The fund then would offer them low interest
rate loans to buy their houses.

The fund would also mobilise money from
people who have their own houses and high incomes to help others. Experience
from mainland China and South Korea showed that the housing fund could issue
bonds to build houses and offer loans to people. The Central Housing Policies
and Real Estate Market Steering Committee carefully investigated and submitted a
plan to the Government to establish the fund. I think it is feasible and we
should establish the fund as soon as possible.

With support from the Government,
we will complete housing targets for low-income earners. We should set a
long-term plan to ensure every household has their own house.

When will the fund be officially
established?

There are arguments about who would
participate in the fund. Some thought that it should be a voluntary fund while
other argued that it should be compulsory. I think that if the fund is
voluntary, only the poor would contribute to the fund as others already have
their own homes. Everyone should take part in the fund. All employees with or
without homes would be required to contribute 2 per cent of their monthly income
to the fund. If every employee makes a contribution to the fund over the 30
years of their working life, there should be a sufficiently large source of
capital to help the poor.

VietNamNet/Viet
Nam News