Thousands of vacant redevelopment apartments in Thủ Thiêm New Urban Area, Ho Chi Minh City, are slated for auction. This decision presents an opportunity to finally resolve this real estate issue and generate significant revenue for the city.
From an Unfulfilled Redevelopment Vision
The program to build 12,500 redevelopment apartments in Thủ Thiêm New Urban Area, approved by the Ho Chi Minh City Party Committee and People’s Committee between 2005 and 2010, aimed to relocate 15,000 families.
The project was divided into three plots totaling 12,260 apartments: 1,844 apartments on a 17.3-hectare plot, 4,216 apartments on a 30.2-hectare plot, and 6,200 apartments on a 38.4-hectare plot. The 38.4-hectare plot was divided into nine apartment towers (R1 to R9), assigned to four different investors.
However, various factors, including residents’ rejection of the resettlement plan or opting for compensation payments, led to a significant surplus of apartments.
By 2016, only 2,924 apartments had been used for resettlement out of the total 12,260, leaving 5,626 apartments vacant. This situation resulted in a waste of resources and infrastructure.
Abandoned Apartments on Prime Land
Resolving the surplus of 5,626 apartments faced financial challenges. The estimated construction cost per square meter of an apartment was over 25 million VND (in 2015), placing a considerable burden on Ho Chi Minh City’s budget. Therefore, an auction was chosen as a means of recovering costs.
However, the process encountered some procedural issues, particularly regarding 1,330 apartments in the R8 and R9 complex (New City Thủ Thiêm). Investors unilaterally altered the design from redevelopment apartments to commercial housing and transferred ownership to buyers, leading to legal and ownership disputes.
Consequently, the five apartment blocks (R1 to R5) deteriorated significantly, remaining unused for nearly a decade, except for their use as a field hospital during the COVID-19 pandemic. This highlights considerable waste of public assets.
Not Social Housing
A question arises: why not convert these apartments into social housing? However, the Ho Chi Minh City Department of Construction argues that social housing projects are planned and studied during the initial proposal and planning phases, while the 3,790 apartments in Thủ Thiêm were built for resettlement purposes.
Regulations stipulate that social housing apartments must have a maximum area of 70 square meters. An assessment revealed that only around 30% of the apartments in these five blocks met this requirement, with the rest exceeding it.
Furthermore, the revenue generated from selling social housing is significantly lower than from selling commercial housing, which would not be sufficient to repay the advance funds provided to investors.
Conclusion
The decision to auction 3,790 redevelopment apartments in Thủ Thiêm New Urban Area is a crucial step towards resolving the vacant apartment issue, generating revenue for the city, and freeing up valuable land. However, future similar projects require improved management and planning to prevent waste and ensure efficient resource utilization.
