Residential buildings for workers at the HCM City-based Tan Binh Industrial Zone.

Despite efforts made by local authorities in recent years to tackle the issue, the supply of houses for workers has failed to keep up with the demand.

With social housing projects for workers in major southern cities and provinces meeting a mere 30 per cent of the demand, a large part of the workers are forced to live in substandard rented rooms.

Thousands of households have invested in building houses that can be rented out to workers. However, as there were no support policies from the government, most houses rented by workers did not ensure suitable living environments and security.

According to Vice Chairman of Dong Nai People's Committee Vo Van Chanh, more than 741,000 workers live in 31 industrial zones and 37 industrial clusters in the province. More than 60 per cent of them have migrated from other provinces, resulting in a huge demand for accommodation.

He said that social housing projects for workers in the province will meet only 40 per cent of the demand on completion. In fact, as of September 2014, only 12 out of 38 projects have been completed and have provided accommodation to 8,100 labourers, accounting for 6.4 per cent of the demand.

The rest of the workers must rely on rented rooms provided by households and individuals. However, Chanh said that the management of this kind of business remains a problem.

With 70 per cent of the 256,000 workers in HCM City's industrial zones needing accommodation, the issue needs to be urgently tackled in the southern city.

Binh Duong Province says that by 2015, about 250,000 workers will need accommodation in the province. To date, 11 out of 19 social housing projects for workers are providing accommodation to 16,599 people.

Investors are hesitating to pour money into social housing projects for low-income earners and workers due to the high costs involved as well as the slow capital recovery.

In addition, the investors in need of capital cannot access the government's VND30 trillion (US$1.4 billion) support package due to the loan eligibility conditions, according to local construction departments.

These departments have proposed greater incentives for investors of social housing projects for workers, including preferential loan interest rates to hasten the implementation of these projects.

According to Nguyen Huu Tin, Vice Chairman of HCM City People's Committee, the city will offer loans for buying or renting social housing apartments at a preferential rate of 3 per cent.

In addition, he said that banks must speed up disbursement of the support package together with other measures to create financial resources for investors, including the establishment of housing saving funds.