In response to information about the waste of resettlement housing funds in Ho Chi Minh City, when many projects have been completed but the occupancy rate remains low, the leadership of the Ho Chi Minh City Department of Construction stated that a comprehensive perspective is needed on the city’s resettlement issue.
At the recent Q1/2016 press conference of the Ho Chi Minh City Department of Construction, Director Trần Trọng Tuấn responded to the media that, regarding the resettlement program, it should not be evaluated solely from the economic or investment cost perspective, as the program also carries important social security implications.
Over the years, the city has continuously invested in infrastructure to meet socio-economic development needs. This process requires a resettlement housing fund to stabilize the lives of residents after land clearance.
For instance, after 20 years of implementing the canal system renovation program in Ho Chi Minh City, 36,000 households have been cleared, which means people must be provided with resettlement housing. Without such investment, these people would have nowhere to go, since for many of them, the compensation money is not sufficient to afford commercial housing.
Therefore, the resettlement program has made a major contribution to the city’s development and to improving residents’ living conditions. On the other hand, the legal framework for compensation, land clearance, and resettlement arrangements has constantly changed. A resettlement project cannot have land ready overnight. For example, the Vĩnh Lộc B resettlement area in Bình Chánh District took 8 years of land clearance before implementation could begin.
A representative of the Department of Construction affirmed that, from a management perspective, maintaining a reserve housing fund for a major city like Ho Chi Minh City in case of emergencies is not redundant.
For the Vĩnh Lộc B resettlement area, the city spent VND 1,000 billion to build 300 land lots, 2,000 apartments, and social infrastructure, with the expectation of resettling residents.
However, reality shows that resettlement is not only about allocating apartments but also must be linked with employment, transportation, and education — a hard-learned lesson. To attract residents to live in Vĩnh Lộc B, the city had to apply a policy of selling apartments on an installment basis similar to social housing.
Similarly, 12,500 resettlement apartments in Thủ Thiêm face the same situation. With the desire to develop urban areas in the city’s east according to proper planning, besides commercial housing, displaced residents were to be resettled on-site.
Yet at that time, compensation policies changed. Specifically, residents could choose to receive cash compensation and find new housing themselves, while some still opted for on-site resettlement, leading to a surplus of resettlement housing.
Of course, the cost of building 12,500 resettlement units involved some financing from construction enterprises (under BT contracts — land-for-infrastructure exchange, or the city would reimburse them). However, to avoid waste and to generate revenue to pay off loan interest, the Department of Finance proposed multiple solutions for handling the surplus resettlement housing.
For example, in Vĩnh Lộc B, the city auctioned more than 1,000 units to enterprises. For the 12,500 units, several options were proposed, such as determining land-use rights at market prices, offsetting apartments, partially selling to enterprises to recover capital, and partially handing them back to the city to add to the housing reserve fund.
A representative of the Department of Construction emphasized that, from a management perspective, for a large city like Ho Chi Minh City, having a reserve housing fund for emergencies is not unnecessary. In the implementation process, there will be both positive aspects and limitations. However, the city cannot, out of fear of waste, fail to prepare resettlement housing for residents when carrying out compensation and clearance for technical infrastructure projects.
