Swedish Partners Behind Low-income Housing in Vietnam

Among the Swedish contributors are the Swedish Co-op Centre, KF project centre, the HSB and Riksbyggen housing co-operative alliance – all of which have entered into an agreement with the VCA to provide Vietnam’s lower income earners with reasonable housing conditions.
     The so-called housing co-operative is an independent entity managed and owned by co-op’s members who are consulted during the course of housing construction and management. The co-op will be set up in the form of an association, either specialising in building brand new houses or converting State-run apart-ment blocks into those managed by housing co-ops. With Swedish support, the project has already finished building pilot models in Hanoi and HCM City.
     The programme is designed to provide long-term housing to co-op members at the lowest possible price as well as offer good services and a favourable natural and social environment. In a few years, the programme will set up permanent housing co-ops and housing co-op unions targeting families with middle and low incomes, particularly young married couples.

To be eligible for the project, candidates must have a stable income, participate in the housing savings clubs, have a real demand for housing and be able to advance 30% of the house value.They must belong to the housing co-op, which will reserve 90% of its apartments for members, and the remainder for outsid-ers. As a member of the housing co-operative, buyers can borrow money from a bank amounting to 50-70% of the value of the mortgage and will be allowed to repay the loan after 10 to 15 years.
     Construction companies will make bids to provide the co-ops with modern and durable houses equipped with a central gas system, a waste water treatment system, as well as access to ADSL internet. The housing co-op model has already been implemented successfully in many countries worldwide, including Denmark, Sweden, the United States, Canada, and the Philippines, among others.

Experts agree that the housing co-ops have proven to be the best solution to the surging demand for accommodation in big cities. Although many projects for low-income earners have begun in Vietnam, only a minority can afford to buy or rent because of high prices.
     According to Stig H. Lindhe, who is the director of the Swedish KF project centre, the housing co-ops will win public confidence because their prime concern is not profit but benefit to buyers, who will have the chance to purchase houses at a lower price than is offered on the market.

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