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Encouraging Individual Investment in Social Housing Development

(News Portal – Dong Nai) - The Housing Law of 2023 (effective from August 1, 2024) encourages and provides incentives for individuals to invest in the construction of social housing according to standards for rental purposes. 

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A homeowner in Tan Tien Ward (Bien Hoa City) hired workers to repair rooms for rent.
Photo: Nhan Thai. 

With more social housing options built by individual investors, workers will benefit from larger accommodations at more affordable rental prices, competing with the current cramped boarding rooms.

Workers Eager for More Social Housing

Many believe that with defined regulations and preferential policies for individuals investing in the construction or renovation of social housing for rent, it will be easier for individuals to participate in these investments. This also presents an opportunity for workers and laborers to access better living conditions.

Ms. Nguyen Hong Loan, a woodworker from Tay Ninh Province, working at a company in Thien Tan Commune, Vinh Cuu District, shared that her family of four (herself, her husband, and two children) rents a 9m² room (excluding the loft) in Hamlet 2, Thien Tan Commune for convenience in both work and school. The rent is 2 million VND per month (excluding electricity, water, and internet costs). However, when factoring in the loft, the total area of 13.5m² is still too cramped, with each person having only about 3.3m² to live in. For the same rent, her family could rent a social housing apartment for low-income earners, offering more space and better living conditions.

Meanwhile, Mr. Phung Van Dat, an engineer from Thanh Hoa Province, working at Bien Hoa Industrial Park 2 in Bien Hoa City, believes that the Housing Law of 2023 creates favorable conditions for individuals to invest in social housing for rent. He hopes this will contribute to increasing the supply of social housing in the province. As more social housing is built for workers and laborers, traditional boarding houses will need to renovate and upgrade their facilities, and adjust their prices competitively. This would allow workers to live in better places at more affordable costs. 

A Great Opportunity for Individuals to Invest in Social Housing for Rent

Article 41 of Decree No. 95/2024/ND-CP, dated July 24, 2024, which provides detailed regulations on certain provisions of the Housing Law of 2023, stipulates that in the case of constructing multi-story housing with fewer than 20 units for rent, the construction must comply with regulations on individual housing construction. This includes requirements for design, construction design verification, obtaining a construction permit, managing and supervising construction works, and ensuring fire safety as mandated by law.

According to Mr. Phan Van Chau, President of the Provincial Lawyers Association, the incentives in the Housing Law of 2023 for individuals investing in the construction or renovation of social housing for rent include: exemption from land use fees and land rental fees for the entire project land area; exemption from the procedures for determining land prices, land use fees, and land rental fees. Investors are allowed a maximum profit margin of 10% of the total construction investment costs for the social housing area. They can also access loans with preferential interest rates. For those building social housing for rent, the loan interest rates are lower, and loan terms are longer compared to social housing built for sale or lease-purchase, as decided by the Prime Minister during each period.​

Mr. Phan Van Chau also noted that to qualify for these incentives, individual investors in social housing for rent must comply with Articles 56 and 57 of the Housing Law of 2023. 

Author: Nhan Thai

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