Improving the social housing project performance in HCMC

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Assignment, Essay
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Contents
CHAPTER I .................................................................................................................... 5
INTRODUCTION TO THE STUDY............................................................................ 5
1.1 Background of the study ..................................................................................... 5
1.2 Statement of problems......................................................................................... 6
1.3 Objective of the study.......................................................................................... 7
1.4 Research question ................................................................................................ 7
1.5 Significance of the study...................................................................................... 8
1.6 Scope of limitation ............................................................................................... 8
1.7 Organization of Remaining Chapters................................................................ 8
CHAPTER II................................................................................................................. 10
LITERATURE REVIEW, HYPOTHESES AND CONCEPTUAL FRAMEWORK
........................................................................................................................................ 10
2.1 Social housing.......................................................................................................... 10
2.1.1. Social housing concept...................................................................................... 10
2.1.2. Social housing related to the government......................................................... 12
2.1.3. Beneficiaries of social housing ......................................................................... 13
2.2 Social housing project............................................................................................. 15
2.2.1. Construction project concept ............................................................................ 15
2.2.2. Characteristics of social housing construction project .................................... 17
2.2.2.1. Fixed position ............................................................................................. 17
2.2.2.2. Social housing project is unique................................................................. 18
2.2.2.3. Social housing projects are done outdoors and are limited in time........... 18
2.2.2.4. Social housing construction projects are related to many different
resources.................................................................................................................. 18
2.2.3. Classification of social housing projects .......................................................... 19
2.2.3.1. Quality and scale of investment capital...................................................... 19
2.2.3.2. Classification by capital source ................................................................. 19
2.2.3.3. Investment form .......................................................................................... 20
2.3 Social housing project quality................................................................................ 20

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2.3.1. Structural sustainability................................................................................... 20
2.3.2. Usability............................................................................................................ 22
2.3.3. Amenities service accessibility.......................................................................... 23
2.3.4. Infrastructure provision .................................................................................... 24
2.4. Investment cost....................................................................................................... 24
2.4.1. Land cost........................................................................................................... 24
2.4.2. Administration cost ........................................................................................... 25
2.4.3. Building cost...................................................................................................... 26
2.4.4. Maintenance cost .............................................................................................. 27
2.5 Dweller selling price................................................................................................ 28
2.5.1. Market demand.................................................................................................. 28
2.5.2. Ceiling price policy........................................................................................... 29
2.5.2.1. Ceiling price policy projects using government capital............................. 29
2.5.2.2. Social housing ceiling policy built by investors ......................................... 30
2.5.3. Location............................................................................................................. 31
2.5.4. Interest rate ....................................................................................................... 32
2.6 Building code and standard ................................................................................... 33
2.6.1. Parameter.......................................................................................................... 33
2.6.1.1. Social housing area .................................................................................... 34
2.6.1.2. Low-rise adjacent social housing............................................................... 34
2.6.1.3. The project is built by an individual........................................................... 34
2.6.2. Material............................................................................................................. 34
2.6.3. Technical system ............................................................................................... 35
2.6.4. Sanitary equipment............................................................................................ 35
2.7. Project management issues ................................................................................... 36
2.7.1. Design quality ................................................................................................... 36
2.7.2. Construction capability..................................................................................... 38
2.7.3. Project manager capability............................................................................... 39
2.7.4. Supervision capability....................................................................................... 41
2.8. Boosting policies from government...................................................................... 42
2.8.1. Access to funding endorsement of VND-30 trillion credit package.................. 42

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2.8.2. Decrease VAT and land tax............................................................................... 43
2.8.2.1. Decrease VAT............................................................................................. 43
2.8.2.2. Land tax...................................................................................................... 44
2.8.3. Easy administrative approval ........................................................................... 44
2.8.4. Public infrastructure provision......................................................................... 45
2.9. Status of social housing in Vietnam..................................................................... 46
CHAPTER III ............................................................................................................... 54
METHODOLOGY ....................................................................................................... 54
3.1. Research framework.............................................................................................. 54
3.2. Research process.................................................................................................... 56
3.3. Research Methods.................................................................................................. 57
3.4. Data collection........................................................................................................ 58
3.4.1. Questionnaire design. ....................................................................................... 58
3.4.2. Determine sample size....................................................................................... 60
3.4.3. Distribute and collect questionnaires. .............................................................. 60
3.5. Process of data analysis......................................................................................... 60
3.6. Analysis tools.......................................................................................................... 60
CHAPTER 4.................................................................................................................. 62
RESEACH RESUILTS ................................................................................................ 62
4.1. Overview of Ho Chi Minh City............................................................................. 62
4.1.1. Geographical location.......................................................................................... 62
4.1.2. Topographic ......................................................................................................... 63
4.1.3. Population ............................................................................................................ 64
4.1.4. Social housing development in Ho Chi Minh City............................................. 66
4.2. Investing in social housing projects in HCM....................................................... 68
4.2.1. By State investors................................................................................................. 68
4.2.2. By private investors.............................................................................................. 70
4.2.3. 20% conversion from commercial....................................................................... 71
4.3. Investment cost....................................................................................................... 71
4.3.1. Land cost .............................................................................................................. 71
4.3.2. Management costs................................................................................................ 78

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4.4.3. Construction costs................................................................................................ 79
4.3.4. Maintenance costs................................................................................................ 81
4.4. Dwell selling price .................................................................................................. 83
4.4.1. Dwell selling price................................................................................................ 83
4.4.2. Ceiling price policy .............................................................................................. 86
4.4.3. Location................................................................................................................ 89
4.4.4. Interest rate .......................................................................................................... 90
4.5. Building codes and standards............................................................................... 93
4.5.1. Parameter............................................................................................................. 95
4.5.2. Material ................................................................................................................ 96
4.5.3. Technical system .................................................................................................. 97
4.5.4. Sanitary equipment .............................................................................................. 99
4.6. Project management issues ................................................................................... 99
4.6.1. Design quality....................................................................................................... 99
4.6.2. Construction capability...................................................................................... 100
4.6.3. PM capability ..................................................................................................... 101
4.6.4. Supervision capability........................................................................................ 105
4.7. Boosting policy by goverment............................................................................. 107
4.7.1. Planning policy .................................................................................................. 107
4.7.2. Financial policy ................................................................................................. 109
4.7.3. Credit policy ....................................................................................................... 111
4.7.4. Policy of tax........................................................................................................ 112

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CHAPTER I
INTRODUCTION TO THE STUDY
1.1 Background of the study
Housing provides "basic foundation" to help people live and maintain social
activities and physical activity (Byrne and Diamond, 2007). The real estate market has
become unstable since the economies of many countries flourished after World War II.
Housing has become "expensive" in many countries since the beginning of the 21st
century (Haffner and Boumeester, 2010). There is a gap between high-income and low-
income groups. For the low-income group, owning a comfortable home becomes one of
the dreams beyond their pay.
In all countries of the world, human development is always accompanied by urban
development. Urbanization comes from human activities, gathered from activities to
distribute food, vegetation, and infrastructure to create a better environment for human
life. Moreover, the investment in housing expansion is a symbol of urban development
because housing is the essential foundation for social and economic development for all
people (Byrne and Diamond, 2007). .
With the rapid growth of cities, more and more people are moving to these urban
areas and the consequence of this migration process is the increase in population in
cities. Housing is one of the basic needs of human life, equally important to the role of
food, housing provides private and safe residence for people (Sheng and Mehta, 2008).
As the number of people living in the city becomes crowded and competitive, housing
demand will increase, then the gap between demand and home supply will widen if the
pace of construction is slower than demand growth. Young households and low-income
households have lower competitiveness and may be able to become homeless because
they have difficulty entering the housing market. If the situation of homeless households
worsens, urban development cannot continue to be stable.
In order to keep the stability and sustainable development of the city, the
government must take measures to help young families and low-income families enter
the housing market. Sheng and Mehta point out that home ownership is a "human

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right"; no government can ignore this important right of citizens (Sheng and Mehta,
2008).
In Vietnam, the objectives of housing policy are based on the first Housing Law
of 1991, which stipulates that all Vietnamese citizens have legal and legitimate rights to
buy houses. This statement is reaffirmed in the 2011 National Housing Development
Strategy, which states: "The basic human right is to have a suitable and safe
accommodation. This legitimate housing demand is necessary conditions to improve the
quality of human resources as part of Vietnam's industrialization and modernization. "
Vietnam is in the stage of integration and development, urbanization is increasing
rapidly, leading to a clear differentiation between the poor and the rich in urban areas.
Low-income urban residents are confronted with the problem of lack of housing or in
shabby, cramped and overcrowded residential areas because they have no economic
capacity to improve themselves his stay. Therefore, finding a synchronous solution on
policy, design and construction of residential areas, social housing for low-income
people is currently one of the important issues in Vietnamese cities.
1.2 Statement of problems
In the mobility of accommodation and type of housing, there are many ways to
implement this mobility, depending on economic, social, psychological and special
conditions, related to policies, administrative and administrative decisions. There are
accommodation changes that are decided by the people themselves (voluntarily). But
there are also movements, carrying out voluntary accommodation in a involuntary way,
which is under pressure (mandatory) of management and administrative decisions in
urban areas. Resettlement can classify this type of social mobility as a compulsory
accommodation (Trinh Duy Luan. 2009). Housing for low-income people is a topical
issue because currently the results of housing programs cannot reach low-income people
(Nguyen Quang Vinh, 2014).
In order to ensure the lives of people in Ho Chi Minh City, to help low-income
people to stabilize their lives, social housing programs have prioritized to meet the
housing needs for income-strata populations. low. The number of social housing has

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increased significantly in both construction floor area and number of apartments. In
2018, the whole city built 44,701 social apartments. The results of social housing
development have shown great efforts of the Ho Chi Minh City government. However,
compared to the development targets and quality of houses under Ho Chi Minh City's
Social Housing Development Program approved by the Prime Minister, the target has
not yet been reached.
To examine the social housing quality through various kinds of social housing
project provision in Ho Chi Minh City, including: State investors, private investors and
20% conversion of commercial housing projects., this study tries to find out factors
influencing on the quality of social housing project in Ho Chi Minh City, then making
recommendations to improve it.
1.3 Objective of the study
- Research object: Social housing development in Ho Chi Minh City area.
- Scope of research on content: The thesis focuses on researching content of social
housing development including problems
(i) Evaluating social housing development, social housing development plans in
Ho Chi Minh City;
(ii) Planning to allocate (define) land fund for social housing development in Ho
Chi Minh City;
(iii) Social housing management, which refers to the management of the sale,
rental, lease-purchase of social housing and the appraisal of the selling price, rental
price, rental price of low-income housing; study criteria for evaluating low-income
housing development results in Ho Chi Minh City in terms of quantity;
(iv) Criteria for evaluating social housing development results. Researching
factors affecting the development and quality of social housing.
1.4 Research question
The specific research questions are reported below:

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- What are factors influencing on the quality of social housing project in Ho Chi
Minh City?
- What are recommendations to improve the quality of social housing project in
Ho Chi Minh City?
1.5 Significance of the study
To evaluate Social housing project quality, this study aims to propose a proper
dimension of Social housing project by 3 provision domains, then, it contributes to give
Ho Chi Minh city developers more attention to Social housing as well as assisting them
recommendations to improve the quality of Social housing project.
1.6 Scope of limitation
Space limit: Research is conducted in Ho Chi Minh City
Time limit: The study was conducted from January 2017 to December 2018
Content limitation: The study only focuses on issues surrounding social housing
in Ho Chi Minh city
1.7 Organization of Remaining Chapters
This study divides into six chapters.
Chapter I: The chapter provides an overview of the background of the study,
problem statement, purpose of the study, significance of the study, research questions,
and assumptions of the study. The chapter ends with various term definitions.
Chapter II: This chapter includes an overview of social housing, project quality,
social housing project quality with sub-items. This follow with the review of the sub-
items practices, important to measure a social housing project quality. In addition, this
chapter also discusses the empirical studies of support items to clarify social housing
project quality. Finally, it ends with the hypotheses, conceptual framework of this study
and conclusion of this chapter.

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Chapter III: This chapter describes the selection of subjects, data collection, and
respondents’ profile.
Chapter IV: This chapter reports the analysis of the data in detail starting from
the preliminary examination of data until the results of the analysis. Together, it
presents the profiles of the respondents, goodness of measures and descriptive statistics
of the respondents. It follows with the findings or results of the study. These findings
include descriptive analysis of all the independent and dependent variables, reliability,
validity, confirmatory factor analysis and structural equation modeling analysis.
Chapter V: This chapter discusses the recapitulation of the study’ findings and,
provides interpretation related to the research hypotheses. The chapter ends with the
review of the findings.
Chapter VI: Lastly, this final chapter provides summarization of the study.
Discussion includes conclusions related to the research hypotheses, contribution and
implications of the study, limitations, and the recommendation for future research.

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CHAPTER II
LITERATURE REVIEW, HYPOTHESES AND CONCEPTUAL FRAMEWORK
2.1 Social housing
2.1.1. Social housing concept
Housing is not only a residential unit of a single individual but it is a combination
of physical and social factors that complement the housing system (Francescato et al.,
1987). Moreover, housing is a multidimensional phenomenon, it includes the type of
structure (for example, home for a family), life time (owned or leased), location and
jurisdiction use (Shlay, 1998).
"Housing is a construction project for the purpose of living and serving the living
needs of households and individuals." (Article 1 of the Housing Law, 2006).
It has a common unity when we discuss the concept of housing: "The quality of
living in urban centers depends too much on the social service system, including health,
education, mechanics and infrastructure ... ". A community that lacks a safe, appropriate
and qualified home to live, it can actually hinder labor productivity. Therefore, there is a
complex relationship between housing conditions with quality of education,
affordability for health care, income level and social integration (Smith, 1990; Hauri,
Parcel & Hauri, 2001; Payne et.al, 2004; and Rinker 2008)
Housing is not only a shelter but also includes facilities and other social services
in an environment that links people with social institutions around them. It encompasses
the overall environment and infrastructure that provides comfort for people, it will
enhance health and productivity as well as enable them to maintain the social
psychological balance in the environment where they find themselves (Afolayan, 2007).
Appropriate housing means ensuring a privacy, space with proper lighting,
ventilation, and basic infrastructure; Convenient location for moving (working and
going to basic service facilities), security and all at affordable prices (Nairobi, 1991)
,.There is no formal definition of social housing but there is a widely accepted definition

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of "target group" of "affordable housing" given by James E. Wallace: If the total
monthly cost of Families with less than 30% of income (the cost of living in the United
States), this family is entitled to social housing policies.
According to Iglesias (2006), social housing is limited by law for people or
families that meet income requirements. Social housing is provided by the government
to low-income families and less competitive people in the housing market.
Social housing is the term for houses and buildings. They are built by the
government to address the need for accommodation of low-income, poor, economically
disadvantaged or difficult housing providers. The government will build, lease or sell
these objects at preferential prices. Policies, plans and programs for low-income
housing development are often run by local governments such as district or city
governments.
In Vietnam (2015), the social housing fund is supported by the investment and
construction policy. It is sold on installments, leased - purchased and leased to policy
beneficiaries who are difficult to improve accommodation [5]. Here, the concept of
social housing has indirectly appeared through another concept of government-owned
housing funds. And it seems that the inheritance of the Housing Fund's perspective in
the previous legal documents.
In 2016, the concept of social housing for the first time appeared in legal
documents: "social housing is a house built by the government or an organization or
individual to lease or rent objects to hire purchase "[16]. Thus, the concept of social
housing has been stipulated in the most effective legal documents. Since then, social
housing has been defined as a type of housing built for low-income groups in society.
[6].
Article 3 of Decree 71/2010 / ND-CP, Vietnamese law stipulates that: “Social
housing is a house built by the government or organizations and individuals of all
economic sectors. the subjects defined in Article 53 and Article 54 of the Housing Law
and the provisions of this Decree buy, rent or hire-purchase under the mechanism
prescribed by law.

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In summary, the study proposes the concept of social housing in Vietnam: "Social
housing is a type of housing for poor families who have low average income. They are
hired or purchased at preferential prices., They must meet some specific conditions
prescribed by the city government, comply with the regulations and laws”.
2.1.2. Social housing related to the government
The government adjusted social housing provision so that it was not subject to
competition in price like commercial houses. Social housing development is the
fulfillment of the government's political task in every country, it will address the need
for housing for those who need government attention. Income from this activity will not
be much and unlike the transfer of real estate business is commercial housing.
The main provider of social housing is the government. Social housing projects
are government plans, including: Location, type of housing, construction standards and
house prices. Social housing is a kind of product that is not charitable but for sale and
rent. Buyers who are low-income earners may be able to earn wages and money, but
because of the small amount of money, they are only enough to cover their lives and
accumulate a little but cannot afford a house without support some kind of support.
Social housing is only for fixed subjects, it is limited to those who enjoy social
housing. The government has rules for social housing transactions, for example: Family
members, income levels and family background. It should be noted that the social
housing market is open to specific consumers.
People who use social housing are complicated. The number of social housing is
always less than the market demand, because if the supply is higher than demand, there
will be a drop in house prices and affect the social housing market.
Social housing is cheaper than other types of houses because:
(1) Social housing is not bad in quality; it still ensures sustainability with basic
construction standards. But it does not use expensive equipment, for example: Low-rise
buildings (less than 9 floors), it will not have an elevator, does not use high-class

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sanitary equipment, does not use bridge decorations period, there are no luxury utility
services such as swimming pools, tennis courts ...
(2) It has a smaller area than high-end apartments, in many cases several
apartments share a kitchen and toilet.
(3) It is reduced or exempted from some taxes for investors such as land tax. In
addition, the Government also provides financial support through policies to help
investors borrow bank loans with interest. low productivity, partial support for clearance
compensation, financial support through intervention to reduce prices of construction
materials ...;
(4) Buyers can get a discount on the price of the apartment, sometimes only by the
price of the apartment, and they will pay it in 15 - 20 years without interest or very low
interest.
The size and number of social houses are built depending on the needs of the
subjects, suitable to the socio-economic conditions of each locality. Accordingly, the
provincial People's Committee will approve and announce the construction plan, social
housing development plan, specify the type of housing, the demand for housing area,
structure of apartments for rent., buying, balancing specifically with investment capital
sources and incentive mechanisms to call for investment in social housing fund
development.
2.1.3. Beneficiaries of social housing
Those who are allowed to use social housing will depend on the individual laws of
each country. But they have common characteristics, are government officials, the poor
and low-income people. Although most of them have a stable income, but after paying
for their living needs, saving only a little, they cannot buy a house or rent a sanitary
home. For example, according to the Ministry of Construction, the maximum
accumulation of civil servants to pay housing is only about 11.5% of total income,
which is a too low rate.

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Specifically, there are 8 priority groups to receive social housing policies (Decree
90/2006 / ND-CP, and the draft Law on Housing 2014) in Vietnam including:
- People who have contributed to the country: According to the law of preferential
treatment for people who contribute to the country.
- Cadres, civil servants and officials: According to the law on cadres, civil
servants and officials.
- Officers, non-commissioned officers, military personnel, employees, working in
the army, police and secretive workers who get paid from the government budget
- Students of universities, colleges and intermediate schools.
- Workers are working in factories inside and outside industrial zones.
- Low-income people, poor people in cities.
- Families who have returned their official housing: It is stipulated in Article 49 of
the 2014 Housing Law.
- Households and individuals must relocate according to the government's plan: It
is regulated based on the government's land recovery decision, it aims to serve defense,
security and benefits purposes. national, public interest.
- In addition: Other subjects, they have difficulties in housing as stipulated by the
Government.
In order to be hired or buy social housing, they must also ensure the following
conditions:
- They have not owned houses yet and have not rented or bought government-
owned houses.
- They had a house but the average area was calculated according to the number of
people in the family less than 5m² / person or temporary house, damaged.

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- They have a monthly average income of the household, which is not exceeding 5
times the total monthly rent of social housing to be paid (for apartments with a
maximum area of 60m² of floor) and is not lower than 4 the amount of monthly rent to
be paid (for the apartment area with a minimum area of 30m²), calculated according to
the rent rate prescribed by the provincial-level People's Committee.
The law on beneficiary of social housing policies in Vietnam has a hierarchical
hierarchy as follows:
- Those who have no housing, newly married, low average housing area;
- People who receive salary from the government, young officials who have
graduated from university or higher, skilled workers of level 5 or higher, who have not
been supported by the state in any form;
- Officials and employees who are entitled to public housing policies but have
returned their houses to the state (they need to rent or hire to buy social houses).
2.2 Social housing project
2.2.1. Construction project concept
Investment project is the basic cell of investment activity. These are measures
with scientific bases and proposed legal bases on technical, technological, production,
financial, economic and social aspects, which are the basis for making investment
decisions with the goal of bringing financial efficiency to companies and socio-
economic efficiency (Nairobi, 1991).
Investment project is the basic cell of investment activity. These are measures
with scientific bases and proposed legal bases on technical, technological, production,
financial, economic and social aspects. They are the basis for making investment
decisions with the goal of bringing financial efficiency to companies and socio-
economic efficiency.
Construction investment project is a set of proposals related to capital investment
activities to build new, expand or renovate certain facilities. It has the goal of achieving

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growth in the number of projects within a defined period (Ministry of Construction,
2016).
Thus, construction investment projects mention issues:
- Economic and technical proposals related to investment decisions;
- Those proposals must aim to increase the quantity, quality of products and
services and high profits;
- Proposals must be made within the specified time period.
Investment in housing construction is an important part of construction investment
projects. It is essential for housing construction which is serving the needs of houses of
all people. Development activities to invest in housing construction are necessary
because:
First, it comes from the role of housing. Addressing housing is a problem for
many countries. In Vietnam, this is an important requirement in the current period with
population growth in cities. Population projection has been posing many problems for
socio-economic growth and housing.
Housing has two attributes of use value and economic value.
Use value: Housing is an urgent need, is an important means to protect people
from natural phenomena such as: sun, rain, stormy winds, cold weather ...
Economic value: Housing is not only an asset of particular importance for each
family, but also one of the criteria to reflect the socio-economic development level of
each country., is the living standard of the people of each ethnic group.
Housing development will create conditions to improve people's lives, which will
contribute to socio-political stability.
Housing development also contributes to upgrading social and technical
infrastructure, will improve the landscape and urban environment towards modern
civilization.

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In addition, housing development is a necessary condition to create new jobs,
which will improve income for workers directly working in the construction industry.
Housing development will create a chain of investment and consumption stimulus
chains for the development of relevant direct and indirect production and service
industries (construction, production of materials and furniture). , electricity, water and
other urban living services).
Second: Project housing development is very beneficial.
In the current reality, housing construction activities that do not comply with
planning are very common in Vietnam, which has led to an imbalance of housing with
technical infrastructure and social infrastructure. The government does not control
construction activities according to planning, has affected architecture, city landscape,
living environment and the final consequence is the quality of accommodation is lower.
Therefore, the Housing Project will help the government increase the number of
houses quickly, will meet the synchronous requirements of the technical infrastructure
system, will build the architecture of civilized urban areas, currently great.
2.2.2. Characteristics of social housing construction project
Housing construction projects have the following characteristics:
2.2.2.1. Fixed position
Each social housing construction project is always associated with land, so it is
fixed in position and unable to move, it is difficult to increase in quantity and area.
The products of each project are social housing projects, which will be associated
with the location where it was created. So these social housing projects will work at the
place where it was created and cannot be moved elsewhere. This feature has a great
influence on the social housing market and social housing business activities. Location
and location issues are very important for the value of each social housing project.

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2.2.2.2. Social housing project is unique
The social housing project has different characteristics, it is implemented under
different conditions of location, space, time and changing environment that has created
uniqueness for each project.
Each social housing project has its own characteristics. This difference is reflected
in: construction architecture, work item layout ...
Investors and architects want to create social housing projects that are not the
same to create attractiveness for customers but it still ensures the consistency of social
housing projects...
2.2.2.3. Social housing projects are done outdoors and are limited in time
Construction activities are carried out mainly outdoors. If the weather is not good,
it will adversely affect the progress of the project, making the project implementation
time longer and will affect the quality of social housing projects.
Each social housing project must have a clear starting and ending point and there
are often a number of related terms. The success of the project manager is often
assessed by the ability to achieve the right time at the end (i.e. the completion date) or
not?
The pressure to complete on time is huge. If the time is extended, the quality of
social housing projects will be reduced. It can discourage relevant people, especially
social housing project investors.
2.2.2.4. Social housing construction projects are related to many different resources
The management of a social housing project (in a state of always changing) will
be more complicated than the production processes (in a stable state) of manufacturing
companies. It comes from the following reasons:
- Social housing investment projects often need a large amount of money, many
people from different departments in the organization and sometimes they have to work
overtime or hire from other companies.

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- Human resources do not master the content of work, will lose the jail time and
the cost of social housing projects.
- Each person must work with people with different qualifications and skills
2.2.3. Classification of social housing projects
2.2.3.1. Quality and scale of investment capital
Social housing construction investment projects are divided into groups:
- Projects of Group A: These are important projects, they have some role of
national security protection, have a secret nature and have important socio-political
significance. Social housing construction projects belong to Group A, which often with
a total investment of over 400 billion VND.
- Group B projects: Projects on building social houses of group B are projects
with a total investment of between 20 and 400 billion.
- Projects of Group C: Projects on building houses of Group C are projects with a
total investment of under 20 billion.
2.2.3.2. Classification by capital source
Social housing construction investment projects are divided into groups:
- Social housing project using government budget and investment funds of
businesses.
Social housing projects use this capital to invest:
+ Building new social housing projects for sale and lease;
+ Providing capital for building and developing social housing;
+ Investment in infrastructure construction associated with social housing
projects;

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+ This fund is also used to support payment for site clearance compensation.
Construction and renovation of social housing areas have deteriorated.
- Social housing projects do not use government budget capital (projects of
private, non-governmental economic organizations).
In a market economy, business autonomy is the driving force and creating
conditions for companies to balance enough capital for building social housing
business. Especially capital for social housing construction in the city area, it often has
long investment time, with a lot of investment and slow capital recovery.
Therefore, diversifying capital sources for social housing construction investment
projects is an "open trend" for social housing development projects in cities. With the
following forms:
+ Forms of linking many investors to mobilize equity capital:
+ Construction companies borrow, pay foreign capital, borrow from banks;
+ Capital source of customers who are homebuyers: Signing a house purchase and
sale contract in the future, a part of money collected in advance and handing over the
house after the construction is completed.
2.2.3.3. Investment form
- The social housing project is the centralized areas by a main investor in
conjunction with many secondary investors of component projects such as new urban
areas; concentrated industrial zone.
- Project of social housing or individual works: implemented by an investor.
For individual social housing investment projects implemented by an investor, it
often happens to housing construction works of private companies.
2.3 Social housing project quality
2.3.1. Structural sustainability

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21
Specific social housing structures are proven to be relevant to residents'
satisfaction (Rent (1978)). Separate social houses will be preferred over other options
such as mobile homes or condominiums (Morris et al. (1976)).
Ukoha and Beamish (1997) observed that: although residents of social houses in
Abuja, Nigeria were satisfied with neighborhood facilities, they were not satisfied with
the type of structure, characteristics Building features, conditions and management at
social housing areas.
The requirement of structural sustainable social housing development is becoming
increasingly urgent around the world. This is an inevitable trend but the implementation
process is not easy for any city.
In Vietnam, Social housing is a new concept in practice as well as in legal
documents.
Recently, the Government has issued many guiding documents, including: This is
a type of housing built by the government or an organization of all economic sectors.
Social housing is also a complex concept, depending on the economic and social
and environmental contexts of each city, each geographical region and the country.
In countries around the world, there are a number of tools for assessing the
sustainability of structures: Green building assessment system for houses of leed -
America, leed - India, casbee - japan, green building index - Malaysia ... Assessment
tools include criteria for efficient use of energy, water and natural resources. They aim
to minimize environmental impacts, enhance social housing quality, and enhance
capacity. responding to disasters, climate change, helping raise public awareness about
sustainable development, integrating sustainable infrastructure development and social
housing ... Sustainable criteria can be quantified under The form of specific and
scientific parameters is the basis for determining whether a social housing project is
sustainable or not no and its sustainability

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Standards (engineering, environmental technology and construction) can
implement the design and construction of sustainable housing for low-income people,
the most difficult comes from the socio-economic aspect rather than technical.
One of the main goals of sustainable design of social housing is economic
efficiency. The total cost of social housing projects (the construction, operation, and
later stages of destruction) according to sustainable design criteria, they are always
lower while the conditions of environmental quality and comfort works are guaranteed.
Initial investment costs may be higher than conventional designs. It means that the price
of sustainable social housing will be higher.
In Vietnam, the cost of social housing is still beyond the financial ability of low-
income people, the application of sustainable design for social housing does not seem
feasible.
2.3.2. Usability
Usability is a measure of a product's ability to serve user goals, or user satisfaction
is a measure of product availability (Speare and Stewar (1974)).
Social housing characteristics are a more important determinant than the
demographic characteristics of residents (Lane and Kinsey (1980)).
Thus, empirical studies show "Technical specifications such as: Number of
bedrooms, size and location of kitchens, quality of housing units ... are closely related to
satisfaction. of the population (Noriza et al., 2010) Morris et al. (1976) found a positive
relationship between room numbers and satisfaction. Speare and Stewar (1974) and
McCown (1977) found Negative relationship between the proportion of people in each
room and the satisfaction of social housing If the number of people in each room
increases, it will create a higher living environment density leading to reduced housing
satisfaction.
Oh (2000) in his research with low income households in Bandar Baru Bangi
Malaysia, the study revealed that: People are very satisfied with their wisdom. The price

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23
and price of the house, but not satisfied with the size / area of the kitchen, plumbing and
public utilities such as entertainment area, playground, taxi and bus services in the area.
The change in accommodation and additional amenities for social housing
manifested by two main phenomena: Increasing space or number of rooms in the house
... will improve the quality of social housing (Morris and Winter (1978)).
Usability of social housing is an important factor affecting the satisfaction of
residents. It is the physical characteristics of the house (kitchen space, laundry area,
living and dining area), the geometry of the lobby area, the number and density of
sockets, the number of rooms. sleep and bathroom, other aspects of the house such as
home quality, privacy (living density), and family support services provided by
investors such as waste disposal, security, lighting light and ventilation system of the
house (quoted from Tan, 2011).
2.3.3. Amenities service accessibility
Yancy (1971) in a study of social housing projects at Pruitt-Igoe, St. Louis. The
study concluded: One of the reasons for Pruitt-Igoe's failure because it lacks regional
cohesion and social order has not received support from nearby projects.
Dje-buarni and Al-Abed (2000) observed that: The satisfaction of residents in
low-income social housing in Sana'a, Yemen, depends on the neighborhood community
in the neighborhood, namely, depending on their privacy, this also reflects the culture of
Yemeni society.
However, dissatisfaction with the residential area, often with properties: School,
distance to work, distance to medical centers and geographical location (Awotona,
1991)). In addition, accessibility to public transport, community facilities, shopping
centers and physical environment variables are considered predictors of housing
satisfaction. society (Ozo, 1990). Therefore, access to services is an important factor
that forms the satisfaction of social housing users.
Conclusion: The satisfaction of the population is not only based on the
characteristics of social housing, the ability to access services also plays an important

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24
role in determining the level of satisfaction in the quality of social housing projects (
Noriza et al., 2010) and (Salleh, 2009).
2.3.4. Infrastructure provision
The quality of social housing projects is evaluated based on the following criteria
(Morris et al. (1976)):
- Area to stay.
- Access to quality schools.
- Construction quality of roads and traffic.
- Uniformity of social class, race, and moral group.
Therefore, Lu (1999) said: Infrastructure is an important predictor of the quality
of social housing projects and the satisfaction of residents.
The quality of social housing projects is likely to appear in many factors related to
the house. However, factors related to residential areas (roads, electrical systems, water
supply) ... will determine the quality of social housing projects and user satisfaction
(Mullins, Western, and Broadbent, 2001)
Alison, Kearns, and Atkinson (2002) analyzed English social housing data,
concluding that although infrastructure elements are less important than accessibility
factors, it is very important in determining the quality of social housing projects.
2.4. Investment cost
2.4.1. Land cost
Social housing projects must be in line with the city's development plan,
developed in accordance with commercial housing projects (Morris et al. (1976)).
In Vietnam, the land fund for social housing development is formed from the
following forms:

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25
- Government handover land: The Government is based on the purpose of
activities of organizations and individuals. They will conduct land allocation with
collection of money or allocation of land without collection.
- Land lease: The Government leases land, they will collect land rental annually.
- Land transfer: This is a deserted land fund and adjusted for reasonable purposes.
In big cities, when the land fund is getting narrowed, this policy is necessary.
- 20% land fund in investment projects to build commercial houses: This is the
land fund that investors must use to build social houses. The Government stipulates:
"Commercial housing projects and new urban area projects must have a minimum area
of 20% of the residential land area of such projects to invest in building social houses "
If the government directly invests in social housing construction and uses budget
capital. Land fund is implemented as follows:
- For social housing construction projects allocated with central budget capital
from 50% or more of the total investment capital of a project or more, the provincial-
level People's Committees of the localities where exist the projects shall have to assume
the prime responsibility for. and coordinate with the Ministry of Construction in
considering and deciding on the selection of land fund for project implementation;
- For social housing construction projects allocated with central budget capital of
less than 50% of the total investment capital of the projects, the provincial-level
People's Committees of the localities where exist the projects shall consider and decide
on the selection. choose land fund to implement the project.
2.4.2. Administration cost
Administrative costs of social housing are expenses to serve the management and
operation of social housing.
In Vietnam, Administration cost of social housing is calculated according to the
provisions of Circular No. 02/2016 / TT-BXD:

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26
- Administration cost of social housing will be paid monthly or periodically by
owners and users of social housing. After that, the operational management unit will
fully perform the work in accordance with provisions in paragraph 1, Article 10 of the
regulation.
- Administration cost of social housing will be calculated based on the price list of
operation management services specified in Article 30.
- The area of using social housing or other areas other than apartments in social
housing will be used as a basis for calculating operation management funding.
In particular, most administrative expenses in social housing will be used by
investors for operating activities in social housing projects, helping people better life:
+ Utilities fees in social housing areas, it will beautify the general landscape,
garden maintenance, cleaning and maintenance of common areas, care and planting of
decorative trees ....
+ Expenses for security, salary for building management, security guards,
sanitation staff ...
+ Costs used for the general administrative work of social housing.
+ Expenses for equipment purchased and machines used for maintenance of the
land or building.
+ Expenses for maintenance and repair of common areas, outdoor areas of the
building along with related services (repair and replacement of emergency warning
lights, lights, bulbs, information systems) standing wind ... in the common area.)
+ Payment for other items as determined by the investor or building management
is decided from time to time, ensuring the building can operate and maintain properly.
2.4.3. Building cost
This cost aims to maintain the existence of social housing.

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27
Building costs are a type of cost that the government has stipulated. It is used for
the purpose of maintaining or repairing buildings such as elevators, walls, salaries for
security, project management or buying equipment for security, repair and purchase of
lighting equipment ... And what is special is that this building cost will not be included
in the selling price, and users will have to pay the monthly cost.
Building costs must be clear about charges, including:
- Security protection costs.
- Cleaning costs.
- Monthly technical maintenance costs.
- Cost of fire protection.
- The cost of repairing all damaged buildings.
Building costs will be adjusted at each level, depending on its value. Building
managers will plan scientific, detailed plans and manage finance accordingly.
2.4.4. Maintenance cost
Maintenance cost of social housing maintenance is the sum of money, which is
used to serve the maintenance of common ownership parts of social housing. It applies
according to regulations on management and use of social housing.
In Vietnam, social housing maintenance carried out in accordance with the
Housing Law 2014 is mandatory for every social housing project. Maintenance of social
housing includes maintenance of private ownership and maintenance of joint ownership.
Social housing owners are responsible for maintaining their own ownership and
contributing money to carry out maintenance of the common ownership part of social
housing. Regarding maintenance fees of social housing ownership, Clause 1 Article 108
Housing Law 2014:
- For apartments, other areas in social houses where investors invest or lease,
investors must pay 2% of the value of apartments or other areas for sale or lease

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28
purchase; This amount shall be calculated into the sale and rent-purchase money, which
must be paid by the purchaser and lessee upon hand-over and specified in the purchase
and sale contracts and hire-purchase contracts;
- For apartments, other areas in social houses that investors keep not sold, not
leased or sold, have not been sold or rented until the time of handing over and putting
social houses into use., except for the area under common ownership, the investor must
pay 2% of the apartment value, the retained area; This value is calculated by selling the
highest priced apartment of that social housing.
In case the level of maintenance budget mentioned above is not enough to
maintain the common ownership part of social housing, the social house owners shall
have to contribute additional funding corresponding to the area owned by each owner.
Summary: The cost of building maintenance is calculated on the basis of 2% of
the social housing value in the purchase contract and it is included in the sale of the
house, the buyer will incur this expense...
2.5 Dweller selling price
2.5.1. Market demand
Market demand is the most important factor of any business administrator. Before
managers make decisions on what products to produce, they need to calculate which
products they consume in the market and who they serve, need to capture information
about the number of customers in need, the level of customer income, the number of
products of the same type on the market and the volume of each supplier's products on
the market.
In Vietnam, the demand for social housing is increasingly pressing because the
population structure is entering the golden population structure. Vietnam has 70% of the
working age population (15-19 years old). In two cities Ho Chi Minh City and Hanoi
booming demand for social housing, while the land fund for development of housing
construction, traffic and utility services are very limited.

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By 2020, cities will have more than 1.7 million people facing difficulties in
housing (an average area of less than 5m2 / person) and 1.7 million workers who need
to stabilize their accommodation, Vietnam will need to building about 700 thousand
apartments to meet that demand (Ministry of Construction, 2015). To meet the
increasing housing needs of the people, the Government of Vietnam has issued
"National Housing Development Strategy". However, the results are very low. The main
reason comes from the lack of financial resources from the government, poor quality of
social housing and limited services.
According to the forecast of economists, Vietnam will have the urbanization rate
of 45% in 2020, the population in cities will increase by about 30 million people.
Therefore, the demand for social housing will increase.
According to the objectives of the Government's Housing Development Strategy,
the average per capita area in urban areas by 2020 must reach 29m2 / person. If based
on this criterion, the demand for houses is estimated to be between 1,279,820 m2 and
2,805,570 m2, ie between 25.96 and 56.11 thousand apartments. [24]
Every year, many immigrants enter big cities to find jobs and live. This is the
reason why the demand for social housing in cities is huge.
2.5.2. Ceiling price policy
2.5.2.1. Ceiling price policy projects using government capital
In Vietnam, the policy of renting and buying social housing is regulated by the
government, it is determined according to the principles (Decree 90/2006 / ND-CP
September 6, 2006):
- Construction costs: Ensuring the recovery of construction investment capital and
social housing management.
- Do not charge land use fees, land rent and tax incentives according to the
guidelines issued by the Ministry of Finance.

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30
- Price of renting, renting and buying social housing in the locality is stipulated by
the provincial People's Committee, it must ensure the principle consistent with the rent
and purchase price frame of social housing including:
+ The social housing rental price bracket applies to low-rise houses in rural areas.
+ The price frame for renting social housing is applied to social housing types.
+ Price frame for renting social housing.
+ Frame of social housing rental rates in economic zones, industrial zones,
+ EPZ, high-tech zone.
The provincial People's Committees will adjust the rental and purchase of social
housing for a period of 5 years. The cost of land and infrastructure will be included in
the land use tax or land lease that the investor must pay to the state budget as
prescribed.
The government will encourage investors to participate in social housing. Policies
will reduce the financial burden on investors. It will reduce the rent and hire purchase of
social housing.
2.5.2.2. Social housing ceiling policy built by investors
For social housing projects do not use government funding. The committee of
provinces (cities) will appraise the price of selling, renting and renting social housing. It
must protect the conditions:
The user deposits 20% of the value of social housing and will pay the rest
according to the agreed period. The minimum period of using social housing is 05
years, calculated from the day the lessor buys and delivers the house to the user.
The rental price of social housing is determined by the project investor on the
basis of calculating the full cost of maintenance; expenses for recovering investment
capital for construction of houses and loan interests (if any) and norm profits of the
whole project must not exceed 15% of the total investment costs; excluding the State's

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31
preferences for renting social houses; the minimum time for capital recovery is 15 years
from the date of signing the contract.
The Circular specifies that social housing invested in construction projects: selling
price, rental price, rental price of social housing is determined by the project investor on
the basis of ensuring the rules stipulated in Clauses 1, 2 and 3, Article 21 of Decree No.
100/2015 / ND-CP and the price of apartments or houses completed in construction.
Selling price, rental price, rental price of social housing is an apartment in the
society which is determined by the area of apartment use (clearance area).
For social houses built by households or individuals for sale, lease or lease-
purchase, households and individuals shall determine prices by themselves but must not
be higher than the price bracket set by the provincial-level People's Committees. onions.
Before signing a contract for buying, selling, renting and renting social houses with
customers, households and individuals must send the prices, rent rates and hire-purchase
prices to local Construction Services for monitoring.
2.5.3. Location
Social housing projects must be in line with the National Housing Development
Strategy. It must ensure the following factors: construction planning, land use planning
and included in the housing development programs and plans of the provinces (cities) in
each period.
Goverment must announce construction plans, housing development plans, land
funds and specific locations .. social development in 5 years. It will ensure the
connection between social housing and urban area projects, commercial housing
development projects ...
In particular, the government must specify: Location of social housing project,
type of social housing, demand for communal housing area, structure of apartments for
rent, purchase, balance instruments suitable investment capital sources according to
regulations .. in addition, the government will make regulations, will invite

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32
organizations and individuals of all economic sectors to invest in developing social
housing fund .
The selection of social housing construction sites needs to be calculated in
accordance with the city development orientation. It is shown in the land use planning
of each locality, with the master plan for socio-economic development, transport
development planning.
2.5.4. Interest rate
Interest rates are a factor that directly affects the increase or decrease in
investment demand, especially social housing projects because it uses a large amount of
capital. When interest rates fall, the cost of capital is reduced, it will encourage
investors to borrow money from banks to conduct investment activities to create more
products for society and vice versa.
Interest rates are an important government economic management tool. By
controlling the interest rate limits of the market, the government can influence all
economic sectors. Moreover, the government also uses different interest rates as a
stimulus for specific sectors depending on economic development priority policies.
In developed countries, housing credit plays an important role and it often
accounts for a large proportion in the national economy. In the United States, total real
estate mortgage credits account for 50% of GDP, about 88% of GDP in the Netherlands
and 62% in the United Kingdom [ADB - 2002]. Meanwhile, in many developed
countries in Asia, housing finance is still very modest, It has not really developed at a
rate of less than 2% of the GDP of the countries.
In Asian countries, Housing credit is only short-term loans, the value of small
loans can only meet a very small part of the value of housing, and most of the loans are
floating rate according to agreement (Tran Ha Kim Thanh, 2011)
A houses with good and legal quality are very expensive, people are very difficult
to own without using credits. Meanwhile, low-income people have very few
opportunities to own a house. One of the main reasons is that they are not eligible to

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33
access financial resources to support the purchase, construction or repair of houses.
Income and requirements for proving the source of income for this object or the legality
of the home they are in often do not meet the requirements of financial institutions in
order to receive credit. [Mitlin, 2007-2008].
In Vietnam, Housing demand in urban areas is developing very fast, but it only
meets the requirements and needs of some high-income people. Social housing for low-
income people remains a problem for a developing country like Vietnam, because
housing will depend on the income capacity of each person or family in society.
Therefore, the Government must have a policy to mobilize all capital sources to
participate. In particular, banks will have the role to provide capital for businesses and
people, helping them solve financial problems.
The financial policies encourage the development of social housing in Vietnam, it
is expressed in the form of incentives such as:
- Prioritize the allocation of preferential capital sources from the proceeds from
the sale, lease and lease purchase of government-owned houses, land use fees of
housing development projects; directly invested by the government budget; or from
preferential credit programs in each period, from issuing local government bonds,
housing bonds; Government bond capital; official development assistance (ODA) and
other sources of foreign loans; preferential loans through specialized credit institutions
such as banks
- Social policies and from other credit institutions appointed by the government to
allow investors to invest in social housing construction and for beneficiaries of
preferential social housing support policies preferential treatment with preferential
interest rates, usually not exceeding 50% of the average lending interest rate of banks in
the market during the same period.
2.6 Building code and standard
2.6.1. Parameter

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34
2.6.1.1. Social housing area
Social housing must be designed and built in a closed style. - Social housing must
ensure standards, construction standards and standards of each apartment: At least 25m2
of floor, maximum of 70m2 of floor.
Social houses are ensured in accordance with construction plannings approved by
competent state agencies.
The project investor may adjust the construction density or land use coefficient to
a maximum of 1.5 times the current construction standards promulgated by the
government;
2.6.1.2. Low-rise adjacent social housing
Social housing area does not exceed 70m2, It has a land use coefficient not
exceeding 2.0 times and will be ensured in accordance with the construction plan
approved by the government
Projects must be approved by the Chairman of the provincial (city) People's
Committee.
2.6.1.3. The project is built by an individual
Social housing must meet the standards of self-contained apartments in
accordance with the law on construction and the law on housing.
Social housing must be built in a self-contained (separate room, separate toilet
area), with a minimum use area of 25m (including toilets); meet the regulations on the
quality of construction works from level 4 or higher according to the construction law.
2.6.2. Material
Minimum standards for rooms: every room of social housing invested by
households and individuals for sale, lease, lease purchase ... will have to ensure the
quality of construction works. . It must comply with the provisions of the law on
construction and minimum standards: The area of use of rooms must not be less than
10m2; clearance width is not less than 2.40m; the lowest height is not less than 2.70m;

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35
ensuring the supply of hygienic water according to specialized law and standards; The
average use area is not less than 5m2 for one person.
Minimum standards for a apartments, a houses: Each apartment, social house
must ensure the quality of construction works in accordance with government
regulations on construction and minimum standards: For apartments, Social housing
must meet the standards of self-contained apartments in accordance with the law on
construction and laws on housing, with a minimum use area of 25m2 (including toilets).
Land for construction of social houses built by individuals investing in
construction for sale, lease or lease-purchase ... must be in line with construction
plannings; must not be in areas banned from construction; must not violate the corridor
of protection of traffic, irrigation, dike, energy and historical-cultural relics and other
protected areas according to law provisions; must not be in an area at risk of landslides,
flash floods, waterlogging, polluted by industrial wastes, garbage dumps, cemeteries;
must not encroach on public land.
2.6.3. Technical system
The Government of Vietnam has stipulated. Social housing must be designed to
meet the common standards of law:
First, the special social housing project must be a five or six-story house
Second, projects of type 1, type 2, type 3, type 4 and type 5 social housing must
be no more than six floors.
Third, the area of each apartment is not more than 60m² of floor and is completed
according to the type of houses but not lower than 30m² of floor.
Fourthly, social housing must ensure technical and social infrastructure standards
as prescribed by each type of project.
2.6.4. Sanitary equipment

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36
Social housing is considered modern and comfortable, the sanitary equipment
must ensure aesthetics and ensure the use features. The toilet facilities with the most
standard parameters will help improve the quality of social housing.
The sanitary equipment must be cleverly arranged for convenient travel, not
overlapping in the design.
Standard toilet size parameters
Sinh Toilet door: Toilet door has a height: 1.9 m - 2.1 m - 2.3 m and a
corresponding width: 0.68 m - 0.82 m - 1.02 m will fit the feng shui to fit the most .
Nhà House tile size: Accordingly, the floor tiles will use a size of 20 x 20 cm
because the floor has a relatively small area, anti-slip color, depending on your choice.
- Wall tiles can use 20 × 20 cm or 20 × 30 cm
- The ceiling will use paint to paint, not tiles to the ceiling.
- All restrooms should have ventilation fans
- The minimum height of the ceiling is 2.2 m
- Height from floor to sink surface is 82 - 85 cm
- Shower height 75 - 80 cm
- Height of lotus bowl 170 - 175 cm
- Height of coat hanger 165 - 170 cm
If the sanitary equipment ensures the standard parameters of size, will increase the
aesthetic, convenient and safe when used for social housing space. The standard size of
sanitary equipment will be based on anthropological basis and human usage habits. And
for each family, it is possible to adjust a bit to make it more suitable for the members.
2.7. Project management issues
2.7.1. Design quality

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37
Design changes in the construction process are one of the main causes of slow
progress and increase the cost of construction projects. Therefore, improving design
quality will minimize risks, improve project effectiveness.
Design of construction projects usually accounts for only about 5-10% of the cost
of a construction package, but it affects more than 70% of the quality and efficiency of
construction projects.
However, in reality, the situation must change and adjust the design that occurs
frequently in social housing construction projects. In 2017, Vietnam has 15,341
construction projects to revise the design, the proportion of design files to be modified
accounts for about 43.8% of the total number of files investigated. The total estimated
value of pre-verification is about 108,240 billion, the reduction value after verification
is 5,833 billion (equivalent to 5.39%) (Ministry of construction,2017).
Design changes often increase construction costs. Each request for additional
changes will increase the cost of 1 km of roads by about US $ 5,000 (World Bank,
2004). Meanwhile, requests for changes are made regularly in many social housing
projects, The design change averages 3 lovers on a contract.
Design changes due to many objective and subjective reasons. In Vietnam, the
number of consulting companies has increased rapidly, but the number is not in line
with quality (Construction Industry Report in May 2015). Design errors often stem from
design engineers. In addition, the inspection and appraisal process is not good, it also
contributes most to the delay and increase costs in social housing projects, most of
which are government projects.
In order to improve design quality, reduce adjustment risks and risk of design
changes, the role of supervisor is also important. Decree No. 15/2013 / ND-CP of the
Government on quality management of construction works has assigned the
responsibility for inspection of technical designs and cost estimates of state-invested
projects to state agencies. Instead of the previous function, only assigned to the investor.
The government needs to strengthen control right from the first stage of the entire

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38
process of investment in social housing construction, will be able to block errors in the
design of social housing.
2.7.2. Construction capability
The construction industry plays an important role in the economy, keeping the
task of forming, constructing and developing the infrastructure of any country in the
world. If the infrastructure is weak, it cannot form a modern society.
During the implementation of social housing projects, construction companies
will have a lot of impact factors: Determining the factors affecting the success of the
apartment building project; ranking the identified factors; propose solutions to improve
the success of apartment building projects.
Social housing projects have business purposes so investors never accept a poor
quality project. Social housing is mostly high-rise buildings so they all have a certain
difficulty. Therefore, construction companies must have good ability to complete the
project within the budget and time limits.
The monitoring of quality of work in construction phase is very important, it
connects the construction company with the investment cycle.
When implementing social housing projects, construction companies are paid in
advance for a part of the work and after acceptance they receive payment from the
investor. Social housing projects have a specific handover time. The financial
difficulties of the construction company during implementation are a major problem in
developing countries like Vietnam. Therefore, construction capital mobilization index
plays a very important role.
Construction of construction companies must be carried out according to design
documents. If the construction company is massively executing, it will accelerate the
progress but will not guarantee the proper technical process. If they encounter problems
that affect the quality of the entire social housing project, the contract may be suspended
or canceled.

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39
In addition to the above factors, the factors of construction experience also greatly
affect the ability to build. Normally, developers require construction companies to
declare the number of years of experience in production and business, similar projects
implemented and a list of major projects implemented in the last 3 years.
2.7.3. Project manager capability
Project management capacity is the ability to manage and coordinate the project's
work. In Vietnam, the problem is to coordinate a team of capable project managers to
implement the project successfully.
Characteristics for evaluating good project management capacity are building a
unified working group, good communication skills, building trust and focusing on
results. These two factors affect throughout the life of the project.
Project management consists of three major phases. That is the planning and
coordination of implementation, the main content is to manage the time schedule, cost
and supervise the project work to achieve the defined objectives:
- Planning. This is the stage of goal development, job identification, estimating
the resources needed to implement the project and the process of developing a unified,
logical, and actionable plan that can be represented in the form of system diagrams or
according to traditional planning methods.
- Coordination of implementation. This is the process of distribution of resources
including capital, labor, equipment and especially important coordination and
management of time schedule. This stage details the time, scheduling for each job and
the entire project (when it starts, when it ends), on that basis, arranging appropriate
capital, human resources and equipment .
- Monitoring is the process of monitoring and checking the progress of the project,
analyzing the implementation situation, reporting the current situation and proposing
measures to solve problems during the implementation process. Along with monitoring
activities, the evaluation of the project between the end of the period and the end of the

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40
term is carried out in order to summarize the experience and propose the following
phases of the project.
In these 3 phases, project management plays an important role and contributes to
the success of a construction project. For each project, the project manager will manage
and manage the project throughout the project implementation process to ensure the
project is implemented on schedule and in quality. In order to evaluate project
management capacity, in addition to the quality of the project we can evaluate through
specific tasks:
- Human resource management skills: Demonstrate the organization, direction and
control of resources for construction projects, to meet the time conditions and technical
requirements of the project, including coordination with other projects. partners to
ensure appropriate manpower and technology.
- Job management skills: The work framework accurately and clearly shows the
implementation steps, each task with the construction time and progress of each
individual and each unit.
- Time management skills: Time to organize construction projects, it must be
specifically presented in the project management plan including: planning, setting up
specific timetables for each job, development declaration, control and evaluation.
- Cost management skills: Includes effective financial control of the project
through valuation steps, evaluation, budget planning, control, analysis, prediction and
reporting of information about financial costs.
- Information management: The process of transferring, screening, receiving
information and processing to serve the entire process of project implementation.
- Quality management: In order to ensure that all aspects of the project and its
results fully meet the required technical details, the system diagnostic test is carried out
step by step in accordance with Technical requirements are provided to reach agreement
between the two parties.

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41
2.7.4. Supervision capability
Project monitoring is the process of monitoring the project on the progress of
time, cost and progress of the project to regularly assess the level of completion.
Through it, project monitoring will propose the measures and actions necessary to
successfully implement the project.
Project monitoring system works to help project managers:
- Manage time schedule, ensure planning requirements
- Keep costs within the approved budget.
- Promptly detect abnormal situations that arise and propose solutions.
Project monitoring must be carried out regularly and it can be carried out
according to formal or informal systems, depending on many factors such as project
organization type, technology requirements, plans ...
There are many different monitoring methods. Here are some key methods:
- Method of using timelines: Timeline of the project is events, used to mark a
process, a stage of the project. They can be recorded as graphs or words. This method is
understood by everyone in the project about the actual status of the project and can
manage and inspect the project.
- Limit testing method: It will establish a limited scope for project management
and be used to monitor the expenditure and level of project implementation.
- S-curve: S-curve is often used for budget monitoring. This is a graph analysis
method to show the difference between planned expenditures and actual expenditures.
- Implementation control - obtained value diagram: It has a very important role,
will measure the implementation of the whole project.
Indicators should be determined after project monitoring:
1. Time difference = Time taken according to schedule - Actual time

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42
2. Spending difference = Actual spending - Completed value
3. Plan difference = Completed value - Plan cost
4. Total disparity = Spending difference + plan difference = Actual cost - Plan
cost
2.8. Boosting policies from government
2.8.1. Access to funding endorsement of VND-30 trillion credit package
The VND-30,000 billion credit package was implemented under Resolution 02 /
NQ-CP dated January 7, 2013. This is a loan package to support buying houses for low-
income people. This package rate is about 6% fixed for 15 years, it is much lower than
the interest rate of banks.
This credit package is not an annual investment from the national budget, it is a
source of refinancing from the National Bank to commercial banks. It is implemented
according to the principle of commercial loans and must recover capital, interest for a
period of 15 years.
The credit package will support lending to 4 groups: civil servants, armed forces,
low-income workers, housing difficulties to borrow, buy, rent and rent houses. society;
Civil servants, armed forces, low-income workers in cities ... have difficulties in
housing to borrow or rent houses with small areas, cheap prices. (with the scale of less
than 70 m2 / unit, the selling price is under VND 15 million / m2 or the total contract
value including houses and land is below VND 1.05 billion);
Civil servants, armed forces, workers in cities, they already have residential land
and have not been supported by the government to build new or renovate houses in
accordance with the plan;
Companies, households and individuals need to borrow to develop social housing
projects for the first group to buy and rent.

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43
Conditions for people to sign contracts for buying and renting social houses: The
Government is stipulated in Article 14 of Decree No. 188/2013 / ND-CP. Therefore, if
they are low-income workers, they must have regular monthly income below the level
of paying personal income tax.
Requests for certification of ho khau, status of housing, income ... were made
before people signed a purchase contract with the investor.
This regulation effectively avoids the situation of non-low income people but still
subscribes to social housing, enjoys many government incentives and it is often cheaper
than commercial housing.
This is a prudent solution, it helps workers with housing difficulties and will
stimulate the real estate market, will encourage businesses to promote the development
of commercial housing segment with low selling prices.
2.8.2. Decrease VAT and land tax
2.8.2.1. Decrease VAT
The Law amending and supplementing a number of articles of the Value Added
Tax Law was passed in June 2013 and takes effect from January 1, 2014. Specifically,
the cases of selling, leasing, buying social housing will be subject to a 5% value-added
tax rate applicable to social housing sale and lease contracts signed from July 1, 2013.
and will apply to the payment amount from July 1, 2013 for the contract signed before
July 1, 2013.
Social housing projects do not use government funding, will enjoy the following
incentives:
+ Applying the value added tax preferential tax rate according to the law on value
added tax;
+ To be exempted, reduced and enjoy preferential corporate income tax rates in
accordance with the law on corporate income tax;

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44
+ The project to build houses for industrial park workers with the money of that
company, they do not collect rent with the rent not exceeding the social housing rental
price, the cost of housing construction or the cost Housing rent will be calculated as
reasonable cost in production cost when calculating corporate income tax. "
2.8.2.2. Land tax
The land fund for social housing projects will be defined by the People's
Committees of provinces and cities, arranged to build social houses when setting up and
approving urban construction plannings and agricultural residential points villages,
economic zones, IPs, EPZs and high-tech zones in their localities.
Based on the specific conditions of each locality, the provincial People's
Committee will decide to reserve part of the land area. Projects of 10 ha or more may
invest in the construction of technical infrastructure systems for the development of
social houses but in all cases do not exceed 20% of the project's residential land area.
In the case of land allocated or leased for the implementation of a social housing
development project, the investor of the project will be exempt from land use fees and
land rent for the whole land area.
Land use tax: exemption from land use tax for a period of 3 years from the time of
land allocation to the area allocated by the State to implement social housing projects.
2.8.3. Easy administrative approval
Government supports people to access social housing, this is an important content
of social housing development policy.
Those who are prioritized to buy houses are often financially difficult subjects.
Therefore, the Government also proposes to support this group to access social housing
projects through the form of loan support. credit capital and regulations on
administrative procedures when renting social housing.

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45
The Government Resolution No. 02 / CP-QD has assigned the State Bank to
allocate between VND 20 and 40 trillion through refinancing, which will help
commercial banks for low-income subjects and officials. civil servants, officials, armed
forces borrowed with preferential interest rates to buy social housing and buy
commercial houses with an area of less than 70 m2, selling price is under VND 15
million / m2.
Therefore, when the government issued a VND300 billion credit package, the
main objective of this package is to ensure social security, increase the ability to pay for
low-income groups and demand for accommodation. This is the object with real
housing needs. Therefore, the government has used 70% of the total capital for people
to borrow social housing for 10 years, enjoy low interest rate of 6% / year and has now
been adjusted to 5% /year.
This Decree also stipulates: Subjects of buying and renting social houses will be
entitled to borrow capital from credit institutions and commercial banks. The repayment
period will be consistent with the customer's repayment capability.
There are 5 banks participating in supporting loans including: Vietnam Bank for
Agriculture and Rural Development, Joint Stock Commercial Bank for Investment and
Development of Vietnam, Vietnam Joint Stock Commercial Bank for Industry and
Trade , Vietnam Joint Stock Commercial Bank for Foreign Trade, Mekong Delta
Housing Development Commercial Joint Stock Bank.
In addition, the main preferential policies for social housing project investors are
also aimed at lowering the cost of housing products, meeting the needs and financial
ability of low-income people.
2.8.4. Public infrastructure provision
In addition to regulations on design standards; sequences, procedures and dossiers
of application for approval of social housing project investment; order and procedures
for the sale, lease, hire-purchase, contracts for sale, purchase, lease and purchase of
social houses ..., the development of social housing must comply with the construction

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46
planning of the agency. competent to approve and standards and regulations issued by
competent agencies. Social housing must ensure synchronous technical and social
infrastructure systems.
Social housing must be strictly managed in the process of using, operating and
operating, ensuring safety, security, hygiene and environment.
The management of social housing operation directly implemented by the investor
or assigned to the unit with the function of managing and operating houses shall comply
with the current housing law. Those who buy, rent or rent houses outside the
responsibility of paying for the purchase, lease or hire-purchase of social houses must
also pay the management and operation costs of houses according to the provisions of
law.
2.9. Status of social housing in Vietnam
2.9.1. The role of social housing in Vietnam
In the socialist-oriented market economy institution being further improved by the
Government of Vietnam, social housing is a special commodity, meeting one of the
most important needs of human being, the need to stay. The management of this market
with stable prices to improve the quality of life of the people, ensuring social security is
a very important issue. Housing is a key product of the real estate market, a special
market, has an important position and role for the national economy, has a direct and
connected relationship with the financial market. Moreover, land-attached housing is a
finite resource that needs to be effectively exploited, a special means of production,
which has been affirmed by Party documents and institutionalized by the Constitution:
land The belt belongs to the entire population that represents the government.
With the meaning and importance of housing in the process of national
industrialization and modernization, the Prime Minister issued Decision No. 2127 / QD-
TTg dated 30/11/2011 approving the Development Strategy. national housing by 2020,
vision to 2030. The strategy has set out a housing development target to meet the needs
of the people and at the same time to provide mechanisms and policies to encourage and

Improving the social housing project performance in HCMC

Improving the social housing project performance in HCMC

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