Hacinco students’ village

VietNamNet Bridge – Though the Education Ministry is trying hard to keep up with students’ great demands for dorms, few private units are willing to invest in the area because of likely losses. 

In Hanoi, for instance, since 2001, there have only been two private dormitory projects:  Hacinco Student Village in Thanh Xuan district and Thang Long Dormitory in Cau Giay district. 

And even these aren’t reserved exclusively for students. Thang Long was first aimed to provide rooms for 2,800 students. Yet, at the moment, a great part of it is being leased to families.   And a major reason is that leasing rooms to students isn’t profitable.    

According to Dinh Dai Co, a high-ranking manager of Hacino village, the revenues from students’ rent are very modest. “With the average monthly rent of around VND150,000 /student, we only garner VND300million dong per month.  

“And in the meantime, there are numerous costs to pay, for management and facility maintenance costs, land taxes, bank interest and others, which also amount to hundreds of millions of dong every month,” said he.  

Because of this, plus other causes including increasing prices, every year for the past few years, the Hacinco project has suffered losses. Meanwhile, there are no significant preferential treatments for businesses investing in building dormitories for students. 

“There is no policy by the government to encourage businesses to build dorms for students, who have great demands for reasonably-priced housing,” said Tran Duc Vu, Vice Director of the Hanoi Department of Planning and Investment. 

Local authorities may have incentives, albeit very small, though. In Hanoi, for instance, businesses are exempt from paying land taxes in the construction process. This, however, applies to all multi-floor apartments rather than solely dorm investors. 

According to doctor Tran Van Tam, Vice President of the University of Construction, given the current state of things, private dorm builders should make smart decisions to minimise costs like building dorms in suburban areas to avoid land taxes. 

This, however, could be effective only if local authorities pitched in and developed a sophisticated public transportation system that would make it convenient for students to travel from dorms to their campuses. 

Doctor Tam also suggested giving universities leave to work with private investors on dorm construction. If that happens, schools could contribute land, and businesses, investment money. 

As for private investors, their greatest expectation is that students will be categorised as those in need of government housing support funds like low-income state employees. Then, there would be more preferential policies for investors, and thus more private units would invest in dorms. 

In the meantime, private dorm owners are trying to increase revenues to make up for low rent by providing additional services such as cafés, post offices, and garages as well as leasing rooms to foreign customers.   

Lan Huong