New rules needed for affordable housing

In 2009, the Ministry of Construction (MoC) submitted a plan to the government which aimed to raise VND6 trillion ($289.85 million) for the building of 24,000 low-cost residential apartments with a total floor area of 1.2 million square metres. However, less than 5,000 such apartments have been built around the country to date.

No low-end residential housing projects have seen construction kick-off since early 2011.

Shedding light on the scarcity of mini residential units Deputy MOC Nguyen Tran Nam said property developers focused too much on top-end products and ignored the demand of the majority of local people for affordable housing.

Nam said property developers should pay due attention to diversifying housing developments, putting a particular emphasis on smaller units that met market demand if they did not want their products to go unsold.

Some businesses, however, say state management agencies are to blame for the current dearth of low-end tenement units.

Ho Chi Minh City-based Dat Lanh Real Estate Joint Stock Company deputy director Nguyen Van Duc said several years ago the firm asked the city authorities for permission to build small residential units of 25 to 40 square metres for people with low incomes. However, the firm’s proposal was not welcomed by the city’s management.

It is a similar story in Hanoi with some property firms saying proposals to build small- and medium-sized residential units for state employees and young couples had been rejected by city authorities, partly because such housing didn’t conform to current TCXDVN 323:2004 housing construction standards.

According to Bac Giang province’s Quang Minh Group Joint Stock Company general director Nguyen Duc Nam, the TCXDVN 323:2004 standards set out three categories for residential units.

Grade A apartments should be 50-70 square metres in size to accommodate one to two people; grade B apartments range in size from 75-100sq.m. for four people and grade C apartments have floor space of above 105sq.m. for 5-6 people.

“If they want to meet such requirements, businesses cannot build housings at a low cost,” said Nam.  

Thinh Dat Real Estate Company Limited director Nguyen Hung Long said the [TCXDVN 323:2004] standards should be revised in line with actual conditions.

Dat Lanh Company’s deputy director Nguyen Van Duc said state competent agencies should not regulate minimum apartment areas but regulate minimal per capita housing areas. This would make it easier for developers to design projects that gave customers what they wanted.