HCMC makes slow progress in relocation houses

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Before carrying out this plan, the municipal authority has had to urge the Department of Construction to review current resettlement housing projects as well as submit ideas to select investors and investment methods in order to complete the plan next year.

The construction department is also to carry out a program to build 11,000 resettlement apartments on 30 hectares in the south of the city.

Initially, the city will invest in power, water and traffic infrastructure at several resettlement areas such as Phuoc Kieng Commune of Nha Be District and Phong Phu Commune of Binh Chanh District developed by South Saigon Development Corporation (SADECO) and Binh Chanh Construction Investment Shareholding Company (BCCI) respectively.

Investors have been asked to advance money to build infrastructure and other components to ensure their projects are on schedule. The city will pay back later.

According to a directive on the development of the 11,000 apartments signed by HCMC vice chairman Nguyen Huu Tin last Tuesday, the city needs to construct homes for officials, workers, students, low-income people, and especially re-settlers.

Foot-dragging projects

In early September in 2009, 21st Century International Development Co. started work on a resettlement project of 4,200 flats in Binh Khanh Ward in HCMC’s District 2.

Covering about 30 hectares, the $350 million scheme comprises 10 blocks of 20-25 stories.

The Binh Khanh resettlement project is considered one of the 3 biggest projects in HCMC, with 12,500 condos used for resettlement in the new urban area Thu Thiem. Once the scheme is complete, the investor is entitled to use one part of the housing and land fund there.

The project owner said the project would be finished after 30 months of construction to meet the accommodation demand of 16,000 residents. However, the project hasn’t made any progress for the past 2 years.

The same situation is also seen at the project to improve urban quality near Thu Thiem Bridge on Nguyen Huu Canh Street in Binh Thanh District invested by Construction JSC No. 5.

The project includes apartment and leasing office buildings of 35 stories and a resettlement condo building of 24 floors with a total of 500 flats.

The construction of the scheme has still fallen behind schedule even though it was planned to be implemented from 2007 to 2015.

HCMC authorities have considered buying the unsold apartments of commercial projects citywide to supplement the municipal resettlement housing fund.

The city’s Vice Chairman Nguyen Huu Tin had discussed such a policy with the association, said Le Hoang Chau, chairman of the HCMC Real Estate Association (HoREA), at the meeting with the association’s members last month.

The association has also been informed by the city’s construction department of the plan to purchase mid-sized apartments from 40 to 70 square meters each.

HCMC is now in need of building resettlement houses for households who will be relocated to clear sites for key projects such as the Thu Thiem New Urban Area, East-West Highway and Northwest Cu Chi Urban Area.

Still, a resettlement housing project will take a couple of years for completion, from site clearance to infrastructure construction.

Meanwhile, many property companies still have a considerable supply of available housing products.

Thus, if it’s carried out, the policy will add more units to the city’s resettlement housing fund while property firms are able to sell their products.

Chairman Chau of HoREA said the city’s government would ensure profits for project owners, and there was a high possibility that this policy would be deployed.

But it’s unclear how many units the city would buy.

Several enterprises however are concerned about how the city would pay for the purchase since the financial procedures would be cumbersome.

The central property management agencies have yet to publicize any official statistics on the unsold apartments on the national market. Nevertheless, a research of CB Richard Ellis Vietnam (CBRE) show there are over 18,000 unsold units in the so-called mid-end apartment segment alone as of last year’s end.