The Vietnam Federation of Civil Engineering Associations (VFCEA) has proposed allowing owners of old apartments to establish housing co-operatives and act as investors of new apartment projects on the basis that they have loans guaranteed by local governments and they self-arrange temporary shelters when new housing projects are underway.
Hosts of reasons are cited to give explanations to the stagnation of old apartment upgrading, i.e. incomplete policies or standstill site clearance. As a result, cities are enlarged by new urban zone projects while their heartlands are sleazy and degraded. This time, the Vietnam Federation of Civil Engineering Associations presented its proposals to work out this problem at a recent conference on building policies for old urban zone renovation.
Stagnant and messy
Businesses are very interested in old apartment renovation projects because they immediately see the value of land plots in the downtown. However, after 10 years the policy on old apartment renovation took effect, a little of progress has been made.
According to the Hanoi Department of Construction, Hanoi City now has 982 old flats managed by the municipal government and 173 condominiums managed by the Housing and Urban Investment Development Co., Ltd under the Ministry of Defence. The city has allocated VND7.7 billion to examine 77 apartments and sort out 11 D-grade (dangerous level) condominiums for upgrading. However, many residents are living in dangerous houses because of sluggish construction progress. Hanoi Investment and Construction Joint Stock Company No. 2 embarked on the upgrading of Van Chuong apartment zone (Dong Da district) dozens of years ago but the progress is moving at a snail’s pace. The similar situation is also seen in 11 other D-grade projects although investors have received significant support from local authorities.
The primary reason is attributed to difficulties in site clearance, temporary resettlement, permanent resettlement and regulations on limited heights of high-rise buildings in business districts. These weaknesses take away most benefits for investors.
Indeed, some investors lack competency to carry out housing renovation projects, they only aim for quick profit in an active market. At present, 13 old apartment renovation projects are much behind schedule, including Van Chuong project (Dong Da district) and Nam Dong project (Dong Da). The Hanoi Department of Construction proposed the People’s Committee to change investors.
Delay in old apartment renovation is just one out of many problems. Another is the limitation on the height of high-rise buildings in the downtown.
Dr Pham Sy Liem, Vice President of VFCEA, said Hanoi is now “planting” so many high-rise buildings in business districts, causing infrastructure overloading in many areas and public space shrinkage.
In addition, renovation methods are outdated and inefficient, causing a lot of disputes and delays.
As a result, although Vietnam has the highest urbanization rate in the world, the face of its old urban zones remains sleazy and outdated. Meanwhile, the mushrooming of high-rise buildings leads to worsening traffic congestions, overloading of infrastructures, schools and hospitals.
Social problems
Many innovative solutions to old urban zone upgrading have been adopted, like applying public private partnership to urban zone renovation on a trial basis, building land reserve mechanism, and building financial mechanism as proposed by the Urban Research and Infrastructure Development Institute (VFCEA) at the conference.
Conference organisers also pointed out primary causes to stagnation of urban zone renovation and formation of adverse effects. According to Dr Pham Sy Liem, the global experience shows that this requires interest harmony. It is necessary to define the interest of the State, the interest of local authorities, the interest of owners, and the interest of real estate investors.
Given the interest of real estate investors, the limit on the height of high-rise buildings diminishes the magnet of downtown projects. They turn uninterested in real estate projects in business districts and leave people to live unsafe buildings. We should not criticise real estate companies because they are profit-seeking businesses, not charitable entities. Or in other words, State agencies urgently have to create a mechanism that can harmonise interests of all stakeholders.
VFCEA proposed building land reserve regime. Specifically, the government reclaims the land and provides ready-to-use infrastructure for investors to carry out their projects as planned in order to boost transparency and strengthen equality of urban zone upgrading process. Compensation and site clearance are very important to the success of projects.
Another aspect is to reallocate urban residents together with clearing poor residential quarters and slum houses in major cities to provide land for real estate investors to build new urban zones. On the surface, new buildings create a better outer look for cities but new projects cause critical social issues which may result in disorder. Dwellers in old urban zones live on trading and urban zone renovation projects force them to drop their breadwinners. The poor is reallocated to suburb resettlement zones where finding new jobs is a real challenge. Many have to return to their old places to find jobs and this will worsen traffic congestions. Resettlement apartments reportedly have bad quality, lack social infrastructure and have poor management.
Therefore, old urban renovation is not simply replacing old ones with new better ones. If they lose sources of incomes when they are given new houses, they may have to sell their houses to live. Hence, the risk of falling back into poverty or being homeless is likely.
Where to start?
Indeed, renovating old urban zones was put forth 10 years ago but a little of progress has been made while the burden of urban infrastructure is getting heavier and heavier.
How to give a facelift to the city, how to let citizens lead a better life, and how to develop the city more sustainably? An official from the Urban Planning Institute said, to change urban construction planning methods in general and old urban zones in particular, we need to change the management thinking, or human factors, to be specific. We need clean-fingered planners and managers for the process of planning urban zone construction, from the stage of brainstorming, defining tasks to planning, approving plans and managing plan implementation.
Sharing this viewpoint, Construction Minister Trinh Dinh Dung stressed it’s time to change our thinking and methods in renewing old urban zones. Authorities must take action, not let only investors do on their own.
Le Minh
Vietnamese
