Ho Chi Minh City and the 'mission' to rescue old apartments

After many years of finding solutions, Ho Chi Minh City is still struggling to find a way to renovate old apartment buildings in the city.

Photo: Old apartment building in Ho Chi Minh City

Difficult to solve the problem of entrenchment for benefits

Recently, Vice Chairman of Ho Chi Minh City People's Committee Le Van Khoa and the Standing Committee of Ho Chi Minh City Party Committee convened departments, branches, and districts with old apartment buildings in the city to listen to reports on policies and mechanisms for dismantling and rebuilding old apartment buildings in the city.

Representative of District 1 People's Committee, Mr. Nguyen Duy Hoa said that there are many old apartment buildings in the district, of which the most prominent in terms of degradation is Co Giang apartment building. When district leaders and construction inspectors came to inspect and find out about renovation plans, they encountered uncooperative attitudes from the residents here.

“This is an extremely unreasonable issue. They buy cheap apartments and then demand compensation of hundreds of millions per square meter. Because the City has not yet had a self-determination policy, these households continue to stay in the apartments and demand high compensation before moving.” District 5 representative, Mr. Nguyen Van Nam, said that the paradox is that most of the households that refuse to move from the 727 - Tran Hung Dao apartment building are speculators. They buy old apartments and then demand high compensation before handing over the houses.

Discussing this issue, Mr. Tran Trong Tuan, Director of the Department of Construction of Ho Chi Minh City, said that the biggest difficulty for the City at present is that when the locality meets to discuss compensation prices, some residents do not agree and demand compensation prices that are too high.

This is unfair to the households that were relocated earlier. Furthermore, the local government is also not decisive. For example, the Co Giang apartment building, although there was an urgent relocation policy since 2005, but due to the lack of determination of the People's Committee of District 1, the clearance has not been completed yet.

“In addition, investment procedures and project establishment are often prolonged. To start a project, administrative procedures alone take 2 years, not to mention difficulties in site clearance... These are the main reasons why the renovation of old apartments is always in a deadlock,” said Mr. Tuan.

Investigating the reality at Thanh Da apartment building, Binh Thanh district, the reporter witnessed that in lots H, M, I... of this apartment building, there were papers for sale of old apartments, priced from only 800 million to 1 billion VND.

“Here, many people buy several apartments because they heard about the policy of repairing old apartments with high compensation prices. When the government organizes meetings to discuss solutions and compensation prices, these households do not come, and even demand a price of several billion VND per apartment. This is a problem that has caused the negotiation between the government and households to go nowhere in recent years,” said Ms. Nguyen Thi Huong, Head of the residential group at Thanh Da apartment building.

In 2016, was the inspection of 474 old apartments completed?

Ho Chi Minh City has decided that by the end of 2016, departments, branches, districts and towns must complete the inspection of 474 old apartment buildings in the city. According to Mr. Khoa, the policy of the City Party Committee and People's Committee is to quickly handle degraded apartment buildings to avoid danger to people, and at the same time, contribute to urban beautification.

However, Mr. Tran Trong Tuan, Director of the Ho Chi Minh City Department of Construction, said that if the plan is done in the old way, it is not feasible because this issue has not been completed for many years, so can it be completed in the last 6 months of the year? Representatives of some districts are also concerned about their own professional capacity. In particular, according to the representative of the Department of Justice, regarding the decentralization of authority according to regulations, the Department of Construction is not allowed, so according to the law, the Department of Construction does not have the authority to conduct inspections.

Mr. Le Hoang Chau, Chairman of the Ho Chi Minh City Real Estate Association (HoREA) commented that it is impossible to complete the inspection of 474 old apartments within 6 months and the current problem of renovating old apartments in Ho Chi Minh City is not without a solution.

According to Mr. Chau, the Prime Minister needs to authorize the Ho Chi Minh City People's Committee to decide on the selection of investors, instead of each project having to be submitted to the Prime Minister for consideration. Next, create a mechanism for the City People's Committee to decide on the appointment of contractors in cases where only one investor registers to implement.

According to Investment