Illustrative image. (Source: VNA)

HCM City (VNA) – Ho Chi Minh City will adopt incentives to encourage the private sector to develop social housing for sale and rent due to the city’s shortage of affordable homes for low-income families and industrial park workers.

According to the municipal People’s Committee, there are about 476,000 young families that do not own a home or are living with their parents or relatives and 156,000 low-income households – including 18,000 of which were displaced by local projects who were not eligible for compensation or whose compensation was not sufficient to purchase a house.

The city also estimated that it will be home to around 400,000 workers from the three industrial parks, requiring some 280,000 apartments, by 2020. However the city could only supply a total of 40,000 homes last year.

By 2020, it aims to build about 20,000 new social housing apartments and 35,000 others exclusively for workers at industrial parks.

Despite many efforts made by the southern hub to build social housing, a number of challenges remain hampering the development of this type of property. Chief among them is the limited land resources for social housing and a lack of long-term loans for developers of affordable housing projects or those in need of affordable homes.

At the same time, a number of projects have suffered lengthy delays in land clearance and other barriers causing slow progress. The city also has few projects offering studio apartments of 25-30 sqm fetching at 300-400 million VND per unit or units of the same size to let that are suitable for low-income earners.

Therefore, the city is looking to improve the diversity of affordable homes for low-income families and accommodation for workers, while providing long-term soft loans with a maturity of more than 10 years to attract developers to these projects. –VNA