Social housing drive can lead to developer incentive

Social housing drive can lead to developer incentive

Developing more social housing in industrial-centred localities is a fundamental solution to meet the increasing demand of immigrant workers.

The K-Home New City social housing project, jointly funded by Singaporean partner Surbana Jurong Group and Vietnam’s Kim Oanh Group, was started on March 9 in Thu Dau Mot city of the southern province of Binh Duong.

K-Home New City boasts over 3,300 apartments. Located adjacent to large industrial parks (IPs) such as Vietnam-Singapore IP 2 and Dong An 2, it is expected to bring housing opportunities to many workers.

Hoa Phat Yen My, a subsidiary of Hoa Phat Group, will build 9,000 social houses in the northern province of Hung Yen with an investment of nearly $200 million.

Expected to be put into use by the end of 2028, the complex will have a population of about 11,500 people serving workers in Yen My II IP located nearby, as well as other parks in the province.

Hoa Phat’s Yen My II is currently expanding its second phase. Phase I, covering over 97 hectares, is 100 per cent filled with the presence of 35 enterprises.

Industrial real estate giant Becamex has also built over 45,000 apartments that are both workers’ housing and social housing in Binh Duong. Each apartment has an area of 30 square metres including a mezzanine, and a selling price of VND100-300 million ($4,000-12,000).

In 2025, Becamex plans to set up around 10,000 social housing units in Binh Duong.

Meanwhile, Tran Duc Vinh, chairman of Tran Anh Group, is promoting the approval of designs and preparing legal procedures for the development plan of Phuc An City, a social housing project in Duc Hoa district of the Mekong Delta province of Long An.

With a starting selling price of VND200 million ($8,000) per unit, buyers only need to pay 30 per cent of the apartment value in advance, while the remainder can be paid in instalments without interest in five years.

According to Vinh, the government’s plan to build at least one million social housing apartments for low-income people and IP workers by 2030 has offered a direction to real estate businesses. Nevertheless, Long An is currently seriously lacking in housing for local workers.

“Businesses have a lot of land but have difficulty in proceeding with legal procedures to carry out commercial housing,” Vinh said. “Therefore, building social houses is an alternative solution for them. Developing social housing will offer more work for employers, utilise abandoned land, and contribute to the socioeconomic development of the province.”

Talking with VIR, Trang Le, country head of JLL Vietnam, said that the government is promoting social housing, so there will be incentives for investors and developers to build social housing in cities and provinces.

“However, we still have to consider the commercial feasibility because investors can only put money in when there is profit,” Trang said. “In particular, social housing is now built with advanced designs and modern materials. Even though they are typically just a small apartment, enough for a young couple, they must have full basic amenities and a better living environment.”

As of July 2024, Vietnam had established around 430 IPs with about eight million workers.

VIR