Part 1. PRECONDITIONS AND BACKGROUND FOR SOCIAL HOUSING
DEVELOPMENT IN THE PROVINCE DURING 2009-2020
I. The province’s housing strategy
The Law of Housing was approved by the National Assembly of the Socialist Republic of Vietnam on 29 November 2005 and takes effect since 01 July 2006. Article 45 of the Law articulates that the State has policies and mechanism to develop the social housing fund for rent and purchasing for civil servants, military officers and workers of economic zones, industrial zones, processing zones and hi-tech zones and other people as being regulated by the Government.
In Lam Dong Province, developing and improving the quality of housing for the local people have been paid much concern by the Provincial Party Committee and People’s Committee. On 9 January 2003, the Standing Board of the Provincial Party Committee issued Resolution No. 16 NQ/TU on policies and mechanism to encourage housing development in the province. On 2 July 2003, the Provincial People’s Committee issued Decision No. 78/2003/QD-UB on the approval of the Urban housing development program of Lam Dong Province by 2010. Article 1 of this Decision mentions the aim of this Program as “By 2010, each urban household has a concrete apartment or house. Disadvantaged and low-income households and civil servants have appropriate houses”.
These are preconditions and background for urban housing development, including social housing from now to 2010 and the following years.
II. Master and detailed planning
Based on the Vietnam urban development master planning orientation by 2020 approved by the Prime Minister (Decision 10/1998/QD-Ttg dated 23 January 1998), the Province has made the Rural and Urban Residential Areas Development Planning by 2020. This is a background for urban development and urban housing/social housing development of the province. This helps speed up the construction of houses as being planned, improve the landscape, manage house construction orderly and prevent unregulated construction which can destroy the local landscape.
III. Economic structure transfer towards industrialization and modernization
The Province’s Socio-economic Development Strategy has focussed on the development of industry to contribute to economic structure transfer to boost other economic sectors to develop; combining central and local economic development to make good use of the local potentials; promoting industrial production; developing hi-tech industry and creating more jobs; developing rural economy by encouraging traditional professions, creating more jobs, increasing incomes and contributing to rural urbanization.
The estimated average annual production value growth rate of the industry and construction sectors is 20-21% and of the service sector is 16-17%.
The rapid growth of industry and service-tourism sectors requires the increase in the number of houses in urban areas and industrial zones in the province.
Part 2. AIMS, POINT OF VIEW, PRINCIPLES
FOR SOCIAL HOUSING DEVELOPMENT
I. Aims of social housing development
Housing and social housing development is an element which contributes to economic growth, political and social order and people’s living standard improvement. Therefore, the province’s social housing development by 2020 should gain the following aims:
1. Increase houses for those who are eligible to buy or rent according to the Law of Housing; by 2018, there will be enough houses for those people.
2. The housing policies should be in conformity with the reconstruction of urban areas and modernization with the aim of fulfilling the socio-economic development targets set by the IX Congress of the Party, in which rapid, effective and sustainable development will be in line with social advances and equality and environmental protection.
3. Contribute to improving the housing quality and infrastructure; improve the living conditions for low-income people, bridging the gap between different groups and ensuring social equality.
4. By 2010, implement some social houses projects in Da Lat City, reviewing the efficiency and expanding to other localities in the province.
II. Development point of view
1. Housing is a basic need of the human beings; the right of being housed is recognized and protected by the State through policies to help them to have their houses within their capacity and conditions.
2. Housing and social housing development is the cause of everyone, thus mobilizing all sources to meet the housing demand.
3. Social housing investment and construction must be in conformity with master planning and be approved by authorized bodies; it should be done comprehensively with development of relevant infrastructure including transport system, water supply and sewage system, electricity supply system, kindergartens, schools and healthcare facilities.
4. Social housing development for low-income people should be in line with job creation and family planning.
III. Principles for social housing development
1. The government invests in building houses for policy households who have difficulties in housing (who are mentioned in Article 53 and 54 of the Law of Housing) to buy or rent.
2. Social housing development is done with projects which are in conformity with master planning and are approved by authorized bodies, ensuring technical and social infrastructure to contribute to the improvement of the quality of housing and sustainable urban development.
3. Funds for social housing construction are from the following sources:
a) Money earned for the selling and renting of State-owned houses.
b) Money from land use and leasing charges of commercial housing development projects and new urban development projects.
c) The local government budget.
d) Voluntary funds from domestic and international organizations and individuals.
đ) Fund raising from other legal sources as stipulated by law.
4. Organizations and individuals who invest in social housing projects are exempted from land using and leasing fees in the land area used for social housing development and from relevant taxes as stipulated by law.
5. Strict management of investment, construction and selection of those who are eligible to buy, rent and use social houses.
6. Social housing development projects which use the state budget must conform regulations on management of state-budgeted construction projects. They should ensure appropriate area and price to meet the condition of users.
7. The selling and renting price is determined based on the following principles:
a) Construction and maintenance cost balance.
b) Excluding land leasing cost and taxes (as being instructed by the Ministry of Finance).
c) In conformity with selling and renting prices being regulated at Decree No. 90/2006/NDD-CP dated 6/9/2006 of the Government – Appendix 1).
8. Selecting right buyers and renters; buyers and renters are not allowed to transfer houses in any forms, excluding inheritance mentioned at Item 2 Article 106 of the Law of Housing; the house management bodies reserve the rights to get the houses back in case of violations.
Within the same period of time, a person/household is allowed to buy or rent a defined area according to the social housing standards.
9. After being granted the house ownership right certificates, the owners can sell the houses and the house management bodies can buy it back; in case the house management bodies do not buy, then the owners can sell to other people.
The selling price must not exceed the price of the same new social houses built by the provincial PC at the time of selling.
Part 3. PROJECT CONTENT
I. People who are eligible to buy and rent social houses
1. Civil servants as being stipulated by the civil servant law.
2. Military officers.
3. Workers in economic zones, industrial zones, processing zones and hi-tech zones.
4. People who returned public houses mentioned in Item 4 Article 40 of Decree No. 90/2006/NĐ-CP dated 6/9/2006 of the Government.
Those who are mentioned in item 1,2,3,4 above must have real difficulties in housing and have regular and stable incomes which enable them to cover their daily expenses and accumulate to pay the renting and buying charges.
II. Requirements in development and management of social houses
1. Land fund for social houses
a) Land for social houses must be identified clearly in the planning of urban areas, rural residential areas and industrial groups; the authorized bodies must approve the housing planning in parallel with the master planning and publicize the planning and relevant policies for housing development projects.
b) The provincial PC decides commercial housing and new urban areas projects with the area of over 10ha, which should include area and infrastructure for social housing development and relevant cost.
2. Requirements in the constructions of social houses
a) Social housing development project holders
Assign the management bodies of state-owned houses at the municipal, district and communal levels to be social housing development project holders using the state budget.
b) Requirements of social houses
Social housing development project holders must ensure the architecture criteria of social housing construction as follows:
- Criteria and requirements of social houses
+ Social houses in urban areas are apartment blocks with no more than 5 storeys and are designed in compliance with construction regulations; priority is given for building apartment blocks with less storeys or separate houses where the land fund is enough.
+ The maximum and minimum area for each apartment is 60m2 and 30m2 respectively.
+ Social houses must satisfy technical and social infrastructure criteria of housing construction regulations.
+ The renting and selling price should be reasonable for low-income people.
- Encourage to use typical and sample design to reduce cost.
3. Social housing management and operation
a) Select social housing management and operation bodies
- The provincial PC decides the management and operation bodies of state-owned social houses on the principle of: bidding if there are two or more registrants; or assigning a local social housing management body if there is no registrant.
- The management and operation of social houses owned by other stakeholders is decided by the project holder on the principle of ensuring the right persons and households who are eligible to buy and rent the houses and the selling and renting prices being regulated by the provincial PC.
- The management and operation bodies of social houses are given priorities as public services providers stipulated by law.
b) Conditions of buyers and renters of social houses
- Buyers and renters of social houses include civil servants as stipulated by law, military officers, workers in industrial zones and local industrial groups, and those have returned public houses stipulated at Item 4 Article 40 Decree 90/2006/ND-CP dated 6/9/2006 of the Government.
- Renters of social houses are low-income households and:
+ have no house or have not rent any state-owned houses.
+ have houses with the average area per person of less than 5m2 and are unable to improve their housing.
- Buyers of social houses include those who are eligible to rent social houses and are able to pay at least 20% of the house value.
c) Procedures to select buyers and renters of social houses
The PCs of districts, Bao Loc Township and Da Lat City establish the Appraisal and Selection Committee. This committee include representatives of organizations and agencies relating to social houses in the localities and is chaired by the Chairman or Vice-chairman of the district.
The standing body of the Committee is responsible for receiving applications. The Committee examines and suggests the list of buyers and renters of social houses to the Department of Construction and submit to the provincial PC for approval; the social houses management body sign contracts with buyers and renters based on this list.
Priorities are given to the following cases:
- Those who are in urgent need of houses (people with no houses, houses are cleared, households with many generations, houses with the average area per person of less than 5m2…).
- Civil servants, young officers with tertiary or higher qualifications, and workers at level 5 or higher qualification and have not been provided houses.
- Civil servants who are eligible for being provided with public house but have returned their houses and need to buy or rent houses.
d) Buying and renting contracts
- The renting and buying contracts are signed by the house management bodies and the renters/buyers. The house management bodies can terminate the contracts if violations of contracts occur, for example the renters or buyers do not pay charges for three consecutive months, change the house structure, or transfer the house to other people without the permission of the house management bodies.
- The renting contracts are signed periodically with the maximum period of 5 years (60 months). Extension is given if the renters do not violate the contracts and are in the list of eligible renters of social houses.
- Buyers of social houses pay the first instalment of 20% of the house value and the rest within 20 years (240 months) since the date of signing the contract.
- Buying and renting contracts are regulated at Decree 90/2006/ND-CP dated 6/9/2006 of the Government (Appendix 6 and 7). The renters/buyers must commit to follow housing regulations, preserve the estates and hand over the estates to the management bodies when the contracts expire or when the management bodies get the houses back for other people or for repairing.
đ) Defining renting and selling prices on the following basis:
- Construction and maintenance cost balance.
- Exclude land leasing charges and taxes as being instructed by the Ministry of Finance.
- Comply with the selling and renting prices being regulated at Decree 90/2006/ND-CP dated 6/9/2006 of the Government.
- Renting and selling prices are changed every five years.
4. Demand for social houses in Lam Dong Province during 2009-2020
a) Demand for social houses
The total labor force in the province in 2007 was 633,947 people. Statistics show that during this period 14,693 households need social houses, including:
- 13,612 households of civil servants (including 22% of married people).
- 1,081 households of military officers
The Provincial IZ Management Board’s reports show that the Loc Son and Phu Hoi IZs have been approved with construction of workers’ houses according to the progress of investment and real demand (the estimated number is 3000 apartments).
Demand for social houses concentrates in Da Lat City (31.6%), Bao Loc Township 22.8%), Duc Trong District (10.2%) and bauxite factories in Bao Lam Districts.
To meet the above demand, there will be construction of 800,000m2 of social houses floor, including 350,000m2 by 2012 and 450,000m2 by 2020.
b) Demand for land for social houses construction
- By 2012
+ The total floor area of construction will be 350,000m2
+ The total land area needed: 30ha
- By 2020
+ The total floor area of construction will be 450,000m2
+ The total land area needed: 40ha
Totally the province needs 70ha for construction of social houses from 2009 to 2020.
c) Financial demand for social houses construction
- By 2012, with the total floor area of construction of 350,000m2 and the cost of 2.1mil VND/m2, the total fund needed is 735bil VND.
Tentative financial sources:
+ The province budget: 400bil (54.4%)
+ Enterprises’ budget: 335bil (45.6%)
- From 2013-2020, with the total floor area of construction of 450,000m2, the total fund needed is 945bil VND.
Tentative financial sources:
+ The province budget: 600bil (63.5%)
+ Enterprises’ budget: 345bil (36.5%)
III. Financial sources for social houses construction
1. The province budget: from the renting and selling of state-owned houses and land leasing.
2. Mobilization from other sources domestically and internationally
a) Bonds and capital contributions as stipulated by law.
b) Advanced capital mobilization from renters or buyers.
c) Loans form domestic and international organizations.
3. Establish the Housing Development Fund from:
a) The province budget
b) Contributions from individuals and domestic and international organizations.
c) Mobilization from other sources domestically and internationally
d) The Fund is used for:
- Loans for social house project holders at preferential interest rates for construction of social houses.
- Loans for renters and buyers with priority being given to policy households, civil servants and military officers.
Part 4. MEASURES AND IMPLEMENTATION
I. Measures to develop social houses
1. Planning and architecture
a) Construction planning
- The planning of social houses must be engaged with the general urban planning to ensure the technical and social infrastructure comprehensiveness and the users’ access to public services.
- The PCs at all levels are responsible for balancing the budget for 1 / 2,000 and 1 / 500 detailed urban planning to ensure the construction of social houses to comply with the master planning.
- The selection of the construction sites must follow the master planning and ensure the technical and social infrastructure comprehensiveness.
b) Architecture of social houses
- Organize the design of social houses suitable with the planning and the local conditions; use typical and sample designs approved by the authorized bodies to save cost.
- Develop apartments and linking houses in IZs to meet the living conditions and demand of workers.
2. Land policy for social housing development
a) The PCs at all levels speed up the land planning, especially in communes, wards and townships for the approval of land fund for social houses for current and long term use.
b) Owners of commercial house and new urban areas project with the area of over 10ha must use 15% of the land fund for social housing development. The site clearance and infrastructure investment cost will be calculated in the land using and leasing charges that the project owners have to pay to the province budget, the surplus difference will be covered by the province budget.
c) Land using and leasing charges are exempted for social housing development projects.
Preferential taxes exemption and reduction are applied to social housing development projects as being regulated at Article 34 and 35 of Decree 24/2007/ND-CP dated 24/2/2007 of the Government.
4. Site clearance policy
In addition to the Government regulations on site clearance, preferential policies for site clearance of social housing projects are as follows:
a) The provincial PC does the site clearance and compensation and then hand over the land to the project holders. The provincial PC covers compensation for land use for public purposes; the project holders advance the compensation charges and deduct from the renting and selling fund.
b) The project holders are facilitated to get loans from the province to do the site clearance.
c) The PCs of Bao Loc Township and Da Lat City cooperate with project holders to do the site clearance timely and effectively and do the coercion if necessary.
5. Project investment policy
a) If the detailed planning is approved, the project holder has to outline a project plan; in contrast the project holder has to do detailed planning and submit for approval. The cost for detailed planning is calculated in the project investment cost.
b) Be exempted from Construction Licences if there is the 1/500 detailed planning being approved by the authorized bodies.
6. Establish the Province Housing Development Fund
a) The Province Housing Development Fund is a financial institution operating on the cost balance and non-profit principles.
b) The Fund is mobilized from the province budget (housing renting and selling, land leasing) and contributions from domestic and international individuals and organizations (if any).
c) The Fund is used for developing social houses in the province.
1. Responsibilities of departments and relevant agencies
a) Department of Construction
- Be the standing agency who helps the Provincial PC to supervise and suggest solutions for the implementation of this Project.
- Instruct relevant bodies and localities in the planning as mentioned in this project.
- Suggest the social house renting and selling price ranges in Lam Dong Province.
- Advise the PC appropriate designs of social houses in the province.
b) Department of Natural Resources and Environment
- Cooperate with Department of Construction to make land use planning for housing.
- Carry out procedures for land leasing.
c) Department of Planning and Investment
- Cooperate with the Departments of Finance and Construction and relevant localities to advise the PC on the budget for social housing development fund to submit to the Provincial Peoples Council for approval.
- Cooperate with the Department of Construction to advise the PC on the preferential policies for social housing development projects.
- Cooperate with the Department of Construction and relevant bodies to advise the PC on the preferential policies for commercial housing development projects to mobilize sources for social housing development projects.
d) Department of Finance
- Cooperate with relevant bodies to advise the PC on the establishment of the Housing Development Fund in 2009 as being regulated by Decree 90/2006/ND-CP dated 6/9/2006 of the Government.
- Report and advise the PC on the annual financial demand for social housing development for approval.
dd) Department of Information and Communications and the Lam Dong Radio and Television publicize the province’s social housing development policy and supervise the implementation.
2. Responsibilities of the PCs of districts, Bao Loc Township and Da Lat City:
a) Carry out surveys of the demand for social houses, make plans for social housing development and allocate enough land for the construction of social houses.
b) Support the project holders in site clearance and compensation according to the approved plans.
c) The Da Lat PC cooperates with relevant departments and agencies to carry out pilot projects for social housing development in the City according to the principle and the mechanism of this Project.