Proposal to Expand Commercial Housing Land Use Sparks Concerns: Will It Address Housing Issues for Low-Income Groups?

The proposal to expand the land available for commercial housing projects is a policy currently under discussion in Vietnam’s National Assembly. While the government’s intention is to ease some difficulties in the real estate market, particularly for commercial housing, it has raised numerous questions, particularly regarding the long-term effects on social housing, a sector with critical unmet needs.

Current State of the Real Estate Market and Social Housing

To understand the proposal, it’s important to review the current state of the real estate market, especially the distinct sectors of commercial and social housing. While the real estate market has flourished in recent years, soaring prices have made it difficult for low- and middle-income groups to afford housing. Workers with monthly incomes ranging from 7 to 20 million VND are unable to afford suitable housing. Social housing, particularly affordable housing, remains in high demand but is not effectively meeting the needs of the population, due to a series of barriers in both policy and implementation.

Additionally, there is the issue of large urban areas and commercial housing projects being completed but remaining largely uninhabited. These developments, while finished and ready for occupancy, have not attracted enough buyers or tenants, leading to underutilized projects that often remain empty or are sold at lower prices. This phenomenon underscores the imbalance between supply and demand in the housing market.

Concerns Over the Proposal to Expand Commercial Housing Land Use

The government has proposed to expand the land available for commercial housing projects by allowing developers to negotiate for the use of non-residential land, such as agricultural or non-agricultural land, for commercial housing construction. The purpose of this proposal is to address the issue in areas where residential land is scarce, especially in newly developed areas that lack housing land, and to stimulate the real estate market by removing obstacles faced by commercial housing projects.

However, this proposal has not received unanimous support in the National Assembly. Nguyen Cong Long, a member of the Standing Committee of the Justice Committee, expressed concerns over the policy, pointing out that while the proposal focuses on easing restrictions for commercial housing, it does not address the pressing issues facing social housing. Long argued that for many low-income workers and government employees, housing remains an unsolved problem, saying that for a civil servant, even if they don't spend money on food, it would take them hundreds of years to afford a home.

Similarly, Du Huy Khanh, a member of the Culture and Education Committee, voiced concerns about the waste of resources, pointing out that many urban areas built for commercial purposes remain empty, and the situation is exacerbated by the fact that low-income groups are still unable to find affordable housing. He suggested that the government should instead focus on using land for social housing projects, which would better serve the real housing needs of the population. According to Khanh, the current demand for social housing is critical, particularly for workers earning between 7 and 20 million VND per month. These individuals need proper housing, but they cannot afford commercial housing.

Where Are the Solutions for Social Housing?

Another significant issue raised by the National Assembly representatives is why land resources and policy mechanisms are not being used to promote social housing development instead of solely focusing on commercial housing. Du Huy Khanh argued that many regions have commercial housing developments that remain uninhabited, while low-income people continue to struggle to find affordable housing. Therefore, land that would be converted into commercial housing land should also be allocated to social housing development. This would better balance demand and truly help those in need.

Supporting this viewpoint, National Assembly representatives Pham Van Hoa (from Dong Thap) and Trinh Xuan An (a member of the National Defense and Security Committee) agreed with the proposal to apply the expanded land use policy nationwide, arguing that limiting it to a few provinces would lead to unfairness and potentially create a system of patronage. However, they emphasized that not all projects should be included in the pilot program, particularly those that have unresolved legal violations.

Position of the Ministry of Natural Resources and Environment

Minister of Natural Resources and Environment, Do Duc Duy, responded to these concerns, explaining that the expansion of land use for commercial housing is aimed at addressing land scarcity, particularly in areas with smaller real estate projects under 20 hectares. According to the 2024 Land Law, projects with land areas under 20 hectares are not eligible for land expropriation or transfer of land use rights. This issue is prevalent across many localities where large-scale real estate projects are absent, and land availability has become a bottleneck.

Duy assured that all projects under the pilot program would adhere to land use planning to ensure that farmland and forest areas are not impacted. He emphasized that the government would closely monitor land conversion processes to prevent any misuse of the policy.

Conclusion

The proposal to expand commercial housing land use has sparked significant debate within the National Assembly. While it aims to stimulate the real estate market, many representatives believe it fails to address the housing needs of low-income groups. They argue that focusing on social housing development is crucial to balancing the market and meeting the real needs of the population. The final decision on the proposal is expected to be made during a vote on November 30, and its outcome will be closely watched to see if it leads to meaningful changes in housing policy.