PROPOSAL TO PROVIDE INCENTIVES FOR INDIVIDUALS DEVELOPING RENTAL HOUSING FOR ELIGIBLE TENANTS

Expanding Policies for Multi-Room Rental Housing

According to HoREA, the draft Housing Law currently addresses cases where individuals build private houses with multiple floors and apartments for sale, lease-purchase or rental. This type of property is commonly known as a “mini apartment building.”

In practice, however, another type of housing is also widespread: private houses built with multiple rooms for long-term rental. These properties primarily serve workers, industrial employees, low-income earners and people who move to other localities for employment.

HoREA believes that the two types of housing share similarities in terms of their role in providing accommodation, but the current draft does not fully cover cases where individuals invest in multi-room rental housing for groups eligible for social housing policies.

The association therefore proposes adding provisions allowing individuals who develop this type of housing to receive incentives similar to those available to social housing project developers, subject to the relevant legal requirements.

According to HoREA, such a mechanism could mobilize additional resources from the private sector and local communities while increasing the supply of affordable rental housing.

Proposal to Retain the Mechanism Allowing Individuals to Develop Social Housing for Rent

HoREA Chairman Lê Hoàng Châu has also proposed retaining provisions allowing individuals to develop social housing for rental to eligible beneficiaries.

According to him, this mechanism was previously provided for under the 2014 Housing Law and the 2023 Housing Law but is no longer included in Article 64 of the new draft.

HoREA argues that if the mechanism is removed, resources from individuals and local communities investing in multi-room rental housing or multi-story, multi-unit housing for long-term rental may not be fully utilized.

This is particularly relevant in areas with large populations of workers, migrant employees or rapid urbanization, where rental housing developed by households and individuals plays an important role in meeting accommodation demand.

The association therefore believes that establishing a clear legal framework and appropriate incentives could support tenants while also improving the management of this type of housing.

Proposal to Develop Affordable Commercial Housing

In addition to rental housing, HoREA has proposed introducing a policy framework for affordable commercial housing into the Housing Law.

According to the association, such a policy could create an additional mechanism for businesses to voluntarily develop projects targeting middle- and lower-income buyers.

HoREA believes businesses should be able to decide whether to participate based on their business capabilities, expected returns and assessment of actual market demand.

Regarding pricing, the association proposes that the Housing Law should only establish a maximum selling price, with the ceiling determined by provincial-level People's Committees or decided by provincial-level People's Councils for implementation by the People's Committees.

At the same time, HoREA recommends against imposing a fixed maximum profit margin on affordable commercial housing projects.

Under the proposed mechanism, developers could independently determine project costs and selling prices. If the proposed price meets the affordability criteria and does not exceed the ceiling set by the competent authority, the developer could register to participate in developing the project.

Mobilizing Additional Resources for Affordable Housing

HoREA believes that allowing developers greater flexibility in developing their business plans could create opportunities for companies with strong management capabilities, effective cost controls, or advantages in financing and material procurement.

Meanwhile, businesses seeking faster capital recovery or prioritizing cash flow could opt for lower profit margins to improve their ability to sell the products.

Overall, HoREA's proposals focus on two main directions: encouraging additional rental housing supply from individuals and households, and creating broader mechanisms for businesses to participate in developing affordable commercial housing.

These measures are currently proposals being considered during the consultation and drafting process for the amended Housing Law and do not yet constitute legally effective regulations.