HCM City pilots cheap housing for workers at industrial parks

The Department of Construction in HCM City has encouraged companies at the Hiep Phuoc and Linh Trung Industrial Parks in Nha Be and Thu Duc districts to pilot construction of residential building clusters with 25-sq.m apartments priced at VND100 million (US$4,405) for workers.

Tran Trong Tuan, the department’s head, told local media recently that the two industrial parks in the outyling districts had large areas of unused land which could be used for housing workers.

He said that investors would be more willing to pay for low-income housing if they did not have to pay compensation for residents affected by the building projects. Investors would also be able to avoid paying for infrastructure such as roads and power and water supply, he added.

Tuan said the department had created favourable conditions for any enterprise ready to invest in low-income housing.

Le Huu Nghia, director of real estate firm Le Thanh Co. Ltd, told Nguoi Lao Dong (The Labourer) newspaper that it is impossible to build VND100 million apartments because of the increase in the price of building materials and wages for construction workers.

In the Hiep Phuoc Industrial Park in Nha Be district, the land for building foundations is weak, and thus apartments in that area could cost VND180 million because of additional work needed, Nghia said.

Land at the Linh Trung Industrial Park in Thu Duc district is not as soft as land at the Hiep Phuoc Industrial Park, he added. However, the price of each apartment would be VND150 million, he added.

Truong Anh Tuan, CEO of Hoang Quan Real Estate Corporation, which specialises in social housing projects, said that administrative procedures for building social housing apartments in the city were more complicated than in neighbouring provinces.

He said that two or three years were needed to complete initial procedures for projects on building social apartments, which drives away investors.

Le Hoang Chau, chairman of the HCM City Real Estate Association, said the price for an apartment in social housing was at least VND300-400 million.

Chau said that areas of land now used for rubber plantations in Cu Chi district and at Pham Van Hai farm in Binh Chanh district would be good sites to build apartments for workers.

Before construction begins, local authorities should invest in building streets that connect to these areas, he added.

He and other experts have asked the city’s People’s Committee to expand the metro line under construction from An Suong Bus Station to Cu Chi district to create conditions for further development.

The metro line would add to the success of social housing projects in Cu Chi district, he said, adding that only a few cheap apartment building projects were being built in the central city due to a lack of land.

The municipal Department of Construction said it generally does not encourage construction of buildings with such cheap apartments as it would “destroy future planning”, according to Tuan.

Between 2006 and 2016, 14 social housing apartment projects were built, providing more than 5,100 apartments for workers in the city, but these met only 15% of demand, he added.

The department has set aside 142 ha for 39 additional social housing apartment projects with a total of 45,000 apartments, he said.

Nine of them are under construction while investors have been approved for 14 of them. The remaining project has received an investment licence.

The price of apartments, though, will be VND500 million-1 billion as investors must pay compensation to residents required to move to make way for construction.

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