Capital shortage still poses a major bottle-neck in developing rental housing for workers in industrial zones of Ha Noi, said director of Ha Noi Industrial and Export Processing Zone Authority (HIZA) Nguyen Xuan Chinh.
A residential area for workers in Kim Chung commune in Ha Noi's Dong Anh District. The capital city currently has 18 industrial zones with 200,000 workers but rental housing meets the demand for only 10,000 workers. (Photo: VNS)
He said that many investors registered projects, but progress stalled after that. However, authorities found it difficult to force them to speed up.
Slow capital recovery made investors disinterested in such kind of projects, he said.
Meanwhile, if interest rates of bank loans funding the projects were fully taken into account, workers found rental charges unaffordable, leading to vacant rooms.
For example, a 4-ha housing project for workers by Phu My Group in Phu Nghia Industrial Zone is expected to provide 1,144 apartments for about 8,000 workers. But since the first apartment building of the project was completed in September, 2010, only about 70-80 per cent of offered apartments were filled. The group asked for loans worth VND180 billion (US$8.5 million) to continue carrying out the project, but only got VND14.2 billion ($676,000) in loans from the city's Housing Development Fund.
In another move, Nam Duc Infrastructure Development Ltd Co invested in 41-ha of rental houses for workers in Quang Minh 1 Industrial Zone, but recently asked for permission to shift part of the project into commercial housing to cover costs for land acquisition and construction.
Meanwhile, head of Housing Development Division under the city's Construction Department Vu Ngoc Dam said that a majority of proposed rental houses for workers were not included in local detailed land-use plans, posing difficulties in project design and land acquisition.
Director of the Ha Noi Investment Development Fund To Thi Hanh said that developing houses for workers was more difficult than houses for low-income earners because investors could only get profits of 10 per cent of project value while their investments were stagnant for long time.
So, in addition to State's policies for social housing investors, local authorities needed to have particular policies for each project, she said, also urging banks to have looser conditions for investors to access loans more easily.
"If banks insist requiring developers to have "healthy" financial situations or bankable mortgage, few companies are qualified to get loans, especially in the current situation," she said.
According to the city's Construction Department, under a programme to develop rental housing for workers from 2011 to 2015, the city targets to build over 1.9 million square metres of housing for 321,000 workers, accounting for 50 per cent of demand.
However, investors have registered to build nearly 540,000sq.m for nearly 56,400 worker.
At present, the city has 18 industrial zones with 200,000 workers but social rental housing has just met demand for 10,000 workers.
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