Under a plan to build social houses and apartment buildings until 2015, the city would clear and hand over land plots to property companies for housing development.
After construction is completed, the city will buy the property at a price equal to the value of the land based on the market price of land plots, according to the VnExpress online newspaper.
The value of the housing on the land will be based on the expense of construction, including costs for site clearance, if any, and the bank interest rate.
When the city buys the completed housing from the companies, it will pay the estimated value of the housing as well as a sum equal to 10 per cent of the total expenses and interest rate.
After the land is allocated, contractors, such as Sai Gon Construction General company and the Sai Gon Real Estate general company, will handle construction.
Businesses investing in social housing projects will be exempted from paying business income tax for four years.
After that, businesses will pay only half of income tax for the next nine years.
According to VnExpress, the city will complete four projects for social houses or apartment buildings this year on a total area of 1,746 ha with construction area of 69,300 sq. metres, equivalent to 800 apartments.
As of the end of last year, the city developed six projects with 2,800 apartments in Districts 8, 10 and Tan Binh, Thu Duc and Binh Tan Districts, all of which have not been completed.
Seventeen projects for social apartments with a total of 6,100 apartments (50-square metre-large) have been approved and are about to be developed.
These projects are located in districts 4, 5, 6, 8, 9, 11, 12 and Thu Duc, Tan Phu, Binh Tan and Binh Chanh districts.
The biggest challenge of the plan to build social houses or apartments is a lack of capital, according to the city's Department of Construction.
Many businesses are not interested in investing in the projects as the possibility to recover capital is not high. It takes some projects about 40 years to recover the capital, said VnExpress.
VNS