Nearly 1,700 old apartments await renovation in Viet Nam

Nearly 1,700 old apartments await renovation

In order to overcome the challenges of renovation and reconstruction of old apartments, the principle of "apartment communities as the main body, the city government providing convenience and assistance, and real estate companies participating" should be followed.

"Difficulties are like hitting a stone"

"If an enterprise only pursues its own interests and is unwilling to cooperate with residents and local governments, it will definitely fail." This is a "famous quote" from Nguyen Thi Tao, Chairman of the Hanoi People's Committee, when talking about the city's old apartment renovation project.

According to Ruan Shitao, the reason for the slow renovation of old apartments is the lack of a unified mechanism to ensure the interests of all parties, and the lack of effective measures to force the renovation and reconstruction of old apartments. Furthermore, the Capital Master Construction Plan limits the height of high-rise buildings and requires reducing the population in the city center, which is also a major challenge.

There are 2 cases given

Give two examples of companies involved in the renovation of old apartments. After the floods in Hanoi in 2008, hundreds of residents in Building C1 of Chenggong, Ba Dinh District, Hanoi were forced to evacuate and move to a 5.3-hectare resettlement area near the temple in Gia Lam District. The reason was that the apartment building was seriously aged and might collapse at any time. It is dangerous and poses a threat to the life safety of residents.

At the end of 2008, the Hanoi Municipal People's Committee issued a document handing over the renovation project of the old apartment building C1 to the Transportation Engineering Corporation (Cienco 1) to invest in the construction of a 17-story mixed residential and office building to resettle residents on the original site. However, six years later, the compensation and resettlement plan has not yet received full consent from the residents of the dangerous old apartments, and the apartment renovation work is still stalled.

When the Hanoi Municipal People's Committee decided to hand over the project to Cienco 1, the investor was required to complete the project within two years to ensure the resettlement of residents. However, while the permitting process was ongoing, the government decided to stop new high-rise projects in the four central districts, so the project permits were suspended. Later, in order to speed up construction and delivery, the Building and Construction Bureau allowed Cienco 1 to construct the foundation pile section first.

Up to now, the investors have completed all legal procedures and carried out foundation construction. However, some residents are dissatisfied with the resettlement compensation coefficient of 1.4 and demand a high coefficient like other projects in Ba Dinh District.

Hanoi city leaders said that the renovation project of dangerous old apartments in Building C1 was progressing slowly and could not be completed on time. Investors and relevant institutions failed to solve the problem in time. The city government requires Ba Dinh District to coordinate with the Land Acquisition and Demolition Steering Committee and investors to formulate policies and plans for the demolition and reconstruction of dangerous old apartments in Building C1.

Treat residents as partners

At the latest meeting between the Ministry of Construction and the Hanoi City Government, Nguyen Quoc Tuan, deputy director of the Hanoi City Construction Bureau, said that the slow progress in the renovation of old apartments was due to the conflict of interests between the "government-enterprises-residents". Residents are unwilling to move and are worried that they will not be able to return to their original place. The compensation rate is low and it is difficult to reach an agreement with investors in negotiations.

Minister of Construction Cheng Dinh Yong proposed a series of solutions, such as improving mechanisms and policies to attract funds from all parties; first of all, the overall old apartment plan should be immediately organized and approved instead of rebuilding the buildings individually. In particular, regulations on high-rise buildings should be re-examined, and the Ministry of Construction and Hanoi City will consult the government on this issue.

Experts say that for "successful reconstruction", current socialization mechanisms must be abandoned. Previous mechanisms put the responsibility on enterprises rather than governments and residents. Therefore, the way of thinking must be changed, with the government formulating plans, residents discussing and acting in unison, and then handing it over to companies for implementation. If the redevelopment of old apartments is considered the responsibility of the government and residents, the likelihood of success will be higher.
 

For more information about real estate projects in Ho Chi Minh City and neighboring provinces, please contact FTT LAND!

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