Hanoi offers incentive for businesses to develop rental housing

Hanoi offers incentive for businesses to develop rental housing

Hanoi People's Council has approved a resolution to support investment in housing development, with a focus on rental housing for workers and priority groups.

Passed on June 15, the resolution covers both commercial and social housing invested for rent, with a minimum rental period matching the project's operating time, typically 50 years.

To encourage businesses to participate in investment, Hanoi applies several incentive mechanisms, such as exemption from land use fees and land lease fees for the area used to build rental housing and technical infrastructure within the project. This policy is similar to the mechanism currently applied to social housing.

In addition, the investor is allowed to allocate up to half of the project's apartments as commercial housing for sale, provided that the total floor area of ​​the commercial housing portion does not exceed 60 per cent of the total floor area. For this portion, the investor must still fulfil their land-related financial obligations as stipulated.

Projects using private capital will have their investment policies decided by the city and assigned to the investor without requiring auctions or tenders to select the investor.

According to the resolution, at least 70 per cent of the rental apartments must be reserved for policy beneficiaries, including those eligible for social housing support, civil servants receiving salaries from the state budget working in Hanoi, people whose land has been expropriated for project implementation, high-quality workers, and relatives of martyrs for ancestral worship. Among these, those whose land has been expropriated will be given priority in housing allocation to help them stabilise their lives as soon as possible.

The investor will use a portion of the profits from the sale of commercial housing to subsidise and reduce rental prices. Rental prices must not exceed the price range set by Hanoi People's Committee.

For tenants, the resolution stipulates that they are not allowed to transfer their lease rights, sublet, or lend/rent the property to others in any form.

In the near future, the city plans to implement two projects in the Phap Van–Tu Hiep and Viet Hung areas. One of the two projects covers nearly 2.5 hectares, comprising seven buildings of 12–13 stories with a total investment of over $140 million, providing 1,166 apartments.

While some businesses like Vingroup and Sonadezi have participated in developing rental housing models in the south, Hanoi has yet to announce the list of businesses that will invest in projects under the new mechanism.

VIR