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City plans super cheap homes

Update: February, 20/2017 - 09:00
Lê Hữu Nghĩa, Director of Lê Thành Commerce & Construction JSC
Viet Nam News

 Municipal authorities are considering following in Bình Dương Province’s footsteps to build ‘super-affordable houses,’ but the jury is out on the project’s feasibility.

These houses come with shockingly low price tags, starting at just VNĐ100 million (nearly US$4,500).

A Thời Báo Kinh Tế Sài Gòn (The Saigon Economic Times) report has officials, economists, construction experts and businesspeople weighing in on how this feat can be achieved.

Trần Trọng Tuấn, head of the HCM City Department of Construction

The department is finalising a project to build super-affordable houses in the VNĐ100 million ($4,500) and VNĐ300-500 million ($13,200-22,000) range.

To be able to build $4,500 - houses like in Bình Dương, the project must achieve three criteria: no land fees (land clearance and land use fee), no infrastructure investment costs, and a 25sq.m. floor area per house, which works out to around VNĐ4 million, or $175 for each square metre). In addition, the housing complex must be located near clusters of workers, for example, industrial zones.

Tuấn said that in HCM City, two locations that meet all the above requirements are the Hiệp Phước Industrial Park in Nhà Bè District and Linh Trung Export Processing Zone in Thủ Đức District.

Nguyễn Hồng Hải, Chief Architect of Becamex IDC Corporation

Bình Dương was build to build the super affordable houses thanks to a lot of conducive conditions.

First, the workers’ housing complexes are accounted for in the province’s general urban plan – including infrastructure development of industrial zones, urban residences, roads, schools, and hospitals.

Second, the province’s determination and resulting support policies helped cut down construction time and cost. Third, the province issued a policy expanding eligibility for social housing projects.

The socio-economic conditions of each locality are different, and HCM City cannot expect to copy the Bình Dương model.

In my opinion, HCM City can build affordable houses, but in the $13,200-22,000 range, since the land and development fees are way higher than in Bình Dương.

The city needs to prioritise sustainability. It is the economic hub of the country, so the construction of affordable houses must be done in a sensible way so that they can still function in 20-30 years without turning into slums later.

An affordable complex must be designed in a flexible manner, so people with financial means can buy two or three adjacent apartments to merge into one big living space.

In Bình Dương, we also constructed ‘space walks’ – functioning as spacious, clean, and convenient streets – to connect between buildings.

I think that super-affordable houses must not be merely a place to live, they must form a connected ecosystem for the community, where residents can access public services as easily as residents in other luxury apartments.

Lê Hoàng Châu, Chairman of HCM City Real Estate Association.

In my opinion, HCM City can only build some 15,000 to 20,000 $4,500 apartments because its land reserves are very limited.

Geologically, only districts like Gò Vấp, Hóc Môn, Củ Chi, and part of District 9 are similar to Bình Dương. Despite having the infrastructure, the Linh Trung and Hiệp Phước industrial parks have weak ground.

If HCM City authorities are dead set on building super-affordable houses, infrastructure must be a priority. The complexes must have everything from schools to hospitals, playgrounds, and other amenities.

The super-affordable houses are meant to meet living demands of workers working at industrial parks in the city, so there’s no point in worrying about a potential influx of people from neighboring provinces pouring in, raising the already high pressure on existing infrastructure.

However, in my opinion, only a limited number of $4,500 homes should be built to accommodate a small number of ‘immigrants.’ Therefore, the Construction Ministry and other competent authorities need to issue as many support policies as they can to help develop social housing projects and commercial affordable houses.

In the meantime, the city needs to develop satellite urban areas for low-income city residents that follow social housing projects’ standards, but still with full options.

When the economy develops and people’s income rises, these areas can be renovated.

Lê Hữu Nghĩa, Director of Lê Thành Commerce & Construction JSC

I felt $4,500 houses are not achievable in HCM City.

The construction cost alone of each square metre is already VNĐ5 million ($219), that means the price for a 25sq.m apartment cannot be lower than VNĐ125 million ($5,500).

Furthermore, many areas in HCM City have weak ground, requiring intensive consolidation and deep foundations, and combined with other land and infrastructure fees, the cheapest apartment will be in the VNĐ150-180 million ($6,600-7,900) range.

But, in apartments with that kind of price, there’s no guarantee of a liveable living standard for inhabitants. And there’s the inadvertent risk of these apartment buildings becoming ‘slums’.

Therefore, I think if the city authorities are pursuing affordable housing, then apartments at the price range of $13,000 to $22,000 are the viable option.

In addition, the city will need to focus on developing infrastructure, especially streets and other types of traffic infrastructure, that make it most convenient, and thus, attractive, to residents. – VNS



Lê Hoàng Châu, Chairman of HCM City Real Estate Association.
Nguyễn Hồng Hải, Chief Architect of Becamex IDC Corporation

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