HCM City: Low-income People to Have Houses

3:26:28 PM | 7/8/2005

The master plan provides that each year, Ho Chi Minh City ought to build 15,000 houses for low-income people. To realize this target, Ho Chi Minh City's Construction Department has made efforts to enlarge the land fund and formulate many regulations aimed at solving the housing problem for low-income people.

Land fund created

According to Ho Chi Minh City's Construction Department, there are four sources of land fund for low-income people’s housing. The first one is the existing projects that need to be reviewed: if any project is delayed due to external reasons such as compensation for land acquisition and troublesome investment procedures, the city will try to remove these obstacles so that concerned enterprises can go ahead with the projects; if enterprises deliberately retain land for speculative purpose, the city’s authorities is determined to revoke their land use grant. The second source is the slum dwelling areas: the city will develop high-rise building projects in these areas to provide houses for resettlers and low-income people. The third source is the polluted land of business establishments, factories and existing residential areas: the dwellers in these areas must be relocated. The final source is farming land and specialized land that will be converted for housing purposes.

However, when delivering land to individuals and organizations for housing development, relevant authorities should pay careful considerations to the effect that housing companies can record profits while the city’s housing fund is available. The city has assigned the Construction Department and Financial Department to undertake this task. Besides, upon having sufficient land fund, the city will use the State budget for the stage of investment preparation and land acquisition. After completing land acquisition and other necessary procedures such as projects' approval, cost estimates and technical design, the city's authorities will call for investment by inviting bids. This new pilot model is now implemented by the Construction Department.

At present, the stage of investment preparation is quite prolonged. For example, for housing projects of 10-30 hectares, this stage consumes at least 18-24 months. The most troublesome problem for investors is the procedures needed for project’s approval and compensation for land acquisition. Therefore, the Construction Department has recommended an appropriate mechanism to the effect that qualified investors will be selected to carry out investment preparations while the Construction Department or the Management Board of urban upgrade projects will serve as the focal point to settle the obstacles to investors. This methodology will help reduce by 30 per cent the time needed to complete the investment procedures in capital construction.

The poor can afford houses

According to Mr. Nguyen Hoang Nhan, Deputy Director of Ho Chi Minh City Construction Department, in the current context, it is very important to encourage low-income people to deposit money in the housing development fund. When his/her deposit in the housing development fund reaches 30-40 per cent of the house’s value, a low-income person can buy the house on the hire-purchase basis and the remaining payment will benefit from preferential interests. Poor people can rent houses until they have got enough money. Mr. Nhan said that the Construction Department is formulating the regulations on housing hire-purchase and houses for rent for low-income people. These regulations will soon be submitted to the Ho Chi Minh City People's Committee for approval. Also, the Construction Department suggests that the city should provide interest rate support for those people who get bank loans to buy houses, whereby the instalments will be transferred to relevant banks and house ownership certificates will be held by the banks as collateral; these certificates will be returned to house owners once they have completed all payments.

With the above-mentioned policies and practices, it is expected that the poor people in Ho Chi Minh City will be able to afford houses in the near future.

Hoa Binh

A target has been set forth that from now to 2010, Ho Chi Minh City will build 88,000 houses for low-income people (including 70,000 apartments and 18 flats for rent). In 2004 alone, the city is expected to have built 4,000 temporary houses for workers, 2,000 rooms for students and 6,000 houses for hire-purchase and lease. The city will also intensify the relocation and on-the-spot resettlement for 1,500 people households under the project of East-West Avenue. It will also build 1,200 houses under the City Water Environment Project and 4,000 houses under the Urban Upgrade Project.

(Source: Ho Chi Minh City Construction Department)