Support Mechanism for Renovating Old Apartments in Ho Chi Minh City: Economic - Social Impacts and Urban Development Strategy

1. Introduction

The renovation and reconstruction of old apartments in Ho Chi Minh City constitute a crucial part of the city’s sustainable urban planning and development strategy. As a rapidly urbanizing metropolis, Ho Chi Minh City faces significant pressure to improve the quality of aging residential buildings, ensure the safety of residents, and optimize land use. To incentivize investors to participate in this process, the city has introduced a series of financial support mechanisms and preferential policies to eliminate legal and economic barriers and accelerate the renovation of old apartments.

2. Support Policies and Incentives

According to a draft resolution prepared by the Ho Chi Minh City Department of Construction, the municipal government will cover 50% of the costs for technical infrastructure construction within project boundaries, with a maximum subsidy of VND 1,000 billion per project. Additionally, developers will receive support for half of the relocation costs and full exemption from project appraisal fees. These policies are designed to mitigate investment risks, increase the speed of returns, and encourage more active participation of the private sector in the renovation of old apartment buildings.

Furthermore, under the 2023 Housing Law and Decree No. 98, developers involved in old apartment renovation projects will also enjoy the following benefits:

• Exemption from compensation costs for state-owned land,

• Exemption from land use fees and land rental fees,

• Permission to commercialize apartments, commercial areas, and service spaces after completing compensation and resettlement work.

These measures not only enhance the attractiveness of renovation projects but also promote the real estate market towards greater sustainability and transparency.

3. Current Condition of Old Apartments and Renovation Needs

According to statistics from the Ho Chi Minh City Department of Construction, there are currently 474 old apartment buildings (comprising 573 blocks) in the city that were built before 1975 and have severely deteriorated. Quality assessments have classified these buildings as follows:

• 14 buildings at grade D (severely damaged and hazardous for residents),

• 116 buildings at grade C (showing signs of structural danger),

• 332 buildings at grade B (failing to meet normal usage requirements),

• 12 buildings have been demolished or repurposed.

The aging of these structures poses a direct threat to residents’ safety while also generating social, environmental, and urban planning challenges. Therefore, the prompt implementation of relevant support policies is essential to improving living conditions and ensuring community safety.

4. Economic - Social Impacts and Planning Directions

The renovation of old apartments is not merely an infrastructure upgrade but also holds significant implications for sustainable urban development:

• Enhancing quality of life: New apartments will feature modern designs, comply with safety, fire prevention, and public facility standards, and improve internal urban transportation systems.

• Optimizing land use: Renovation projects will increase spatial efficiency, reduce infrastructure burdens, and create opportunities for smart city development.

• Stimulating economic growth: The redevelopment of old apartments will drive real estate investment, generate employment opportunities, and raise property values in surrounding areas.

• Mitigating natural disaster risks: Newly constructed buildings will have better disaster resilience, reducing risks related to collapses, fires, and other hazards.

5. Implementation Roadmap and Strategies

Ho Chi Minh City aims to complete the renovation and repair of over 500 old apartment buildings by 2035. To achieve this goal, the government will adopt the following strategies:

• Empowering district, municipal, and Thu Duc City authorities to accelerate compensation, resettlement, and renovation efforts.

• Enhancing financial incentives to attract more enterprises to participate in the redevelopment of old apartments.

• Streamlining administrative procedures to shorten project approval timelines and expedite implementation.

• Strengthening public-private partnership (PPP) models to mobilize more social resources and improve project efficiency.

6. Conclusion

The renovation of old apartments in Ho Chi Minh City is not only an urgent task but also a key strategy for sustainable urban development. Through financial support mechanisms, preferential policies, and well-planned execution, the municipal government is creating more favorable conditions for private-sector participation while ensuring improvements in residents’ safety and quality of life. Effective implementation of these measures will contribute to modernizing the city's urban landscape, making it a livable and internationally competitive metropolis.

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