HCMC Seeks ‘Urgent’ Classification for Social and Rental Housing Projects

According to the Department, current data regarding various forms of rental housing remains insufficient, prompting the city to conduct ongoing sociological surveys. These efforts aim to evaluate the actual status and demand for rental housing across different population groups. The resulting data will serve as the necessary foundation to establish development targets that are both accurate and aligned with the city’s socio-economic conditions.

The Department noted that the current legal framework for rental housing remains incomplete. Existing regulations primarily focus on social and commercial rental types but lack the robust mechanisms needed to incentivize large-scale rental housing funds. Consequently, to meet the housing needs of workers, civil servants, and the armed forces, HCMC has petitioned the Ministry of Construction to advise the Government on comprehensive policy reforms. These reforms should prioritize financial, credit, and investment incentives to attract various economic sectors into the rental housing market.

Proposed Solutions and Policy Incentives

To effectively address the housing needs of workers, civil servants, and the armed forces, HCMC has petitioned the Ministry of Construction to advise the Government on comprehensive policy reforms. Central to these proposals is the “urgent” classification for rental projects, which would allow developers to bypass the standard investment policy approval stage. Instead, investors would only need to fulfill investor recognition procedures, followed by 1/500 scale planning, land allocation, and construction permitting.

Furthermore, the city intends to leverage municipal budgets to support essential technical and social infrastructure both inside and outside these developments. To attract further investment, local authorities would be empowered to approve superior density and architectural targets, while developers would benefit from significant exemptions or reductions in land use fees, land rent, VAT, and corporate income tax for the duration of the rental period.

Financial and Investment Incentives

Recognizing the long capital-recovery cycles inherent in rental housing, HCMC has proposed specific financial measures to ensure project viability. The city recommends a dedicated credit package for social rental housing and worker accommodation, offering stable interest rates of 3–4% per annum, or alternatively, rates 1.5–2% higher than deposit rates. These loans would feature 15–20 year terms with a 3-year grace period.

Additionally, the city proposes interest subsidies that cover 70–80% of commercial lending rates during the investment and initial operation phases, specifically targeting the first 10 years of project operation. To broaden the scope of available land, the city also suggests allowing real estate businesses to lease land within industrial zones to build worker housing. Furthermore, developers who commit at least 50% of their commercial project area to rental housing would be entitled to the same incentives currently reserved for social housing developers.

Planning and Land Management

The Department of Construction has also introduced measures to simplify planning and land governance. Under these proposals, if a general plan identifies an area as suitable for housing, authorities can utilize this designation to determine density and infrastructure connectivity. This serves as a sufficient basis for investor selection and project approval, effectively removing additional procedural hurdles.

Regarding land policy, for areas managed by the state or deemed suitable for housing, the HCMC People’s Committee would be authorized to grant investment policy approvals and allocate investors directly. This streamlined approach would bypass lengthy requirements related to land auctions or public bidding. Finally, regarding construction oversight, investors would be granted the flexibility to choose between a feasibility report appraisal by specialized construction agencies or the standard construction permitting procedures as stipulated in the National Assembly’s Resolution 201/2025.