Investors building commercial houses and urban complexes on areas 5ha and upwards must put aside at least 10 percent of that land to build houses for low-income earners, according to a draft proposed by the Ministry of Construction.
The draft was still being debated, as experts said there were alternatives for investors to build houses for low-income earners instead. The Ministry of Construction, meanwhile, said that investors would be exempted from land-use taxes among other advantages when they built houses for low-income earners.
Housing projects
Once approved, the draft would replace a Government decree that stated that, based on conditions in individual localities, provincial people's committees were allowed to ask investors building commercial houses and urban regions on areas 10ha and upwards to reserve a part of the invested land for technical infrastructure systems, which would in turn be used to build social housing projects.
The decree said that the reserved land area should not exceed more than 20 percent of the entire project area. Though the decree merely encourages participants to implement their duties, it has made many suspicious of its feasibility, the HCM City Real Estate Association is among them.It had already lodged a petition asking the Government to put forward other measures to implement social housing programmes instead of 'cutting' land.
According to the association's general secretary, Do Thi Loan, asking investors to contribute 20 percent of their land was too much, and would encourage other enterprises to falsely set up their projects at less than 10ha to evade their obligations.
Many believed that the ministry's draft would address the problem stated above after the area was reduced to 5ha. This would also mean that more investors would have to lake on such responsibilities in the future. Yet many specialists and investors had not concurred with the recent draft, arguing similar policies were abolished in Ha Noi and HCM City in 2005-06.
HCM City had to "say goodbye" to a regulation that asked investors to cut 10 city to build houses for the poor, while investors who had poured money into house-trading projects were asked to sell a fifth of their housing funds to the city at a base price.
Similarly, Ha Noi had to give up a request asking investors to give a fifth of their land to the city to build houses.
There was never any denying the policies were humanitarian in nature, but they were difficult to implement, so promulgation offices had to revoke them in the end.
Deputy Chairman of the Construction Association Pham Sy Liem said that it was better to encourage investors to buy land to build houses for low-income earners now, as land and housing markets He also suggested asking investors to transform their unfinished buildings into small-sized apartments for low-income earners, using cheap construction materials.
Echoes from past
The Ha Noi People's Committee issued a decision in 2001 which said it would be compulsory for investors to hand over 20 percent of their land funds or 30 percent of their housing funds to the city.
A conclusive statement released in 2007 by the Director of the Natural Resources and Environment Department, Vu Van Hau, found that Ha Noi had not met the demand for housing, especially among the poor, low-income earners and public servants.
In principle, the Land Law regulates the retrieval of land will only be made in cases of violation, or when the State deems it necessary for purposes of national defence and security, or national or public interests.
People who have land reclaimed and can prove their legitimate rights will be compensated and supported.
For investors, it is said that the actual land fund will bring them great benefits. But in fact, their benefits will decline if they obey the city's regulations.
Economists meanwhile have said that it is hardly enough to build cheap houses if investors have to contribute 20 percent of their land funds or 30 percent of their housing funds to the city.
Later, the decision was readjusted into another regulation that said investors would help the city prepare 20 per cent of their land for the city to build houses upon.
Liem wondered why they had to bind investors with contributions of between 10 and 20 percent of their land.
It would be better to consider large areas of "wild land" left idle in urban areas, he said. "It is necessary to retrieve the land within the law, so a land fund will be available to build houses." The head of the Ha Noi Social and Economic Development and Research Office, Nguyen Minh Phong, said it was essential to push projects aimed at building houses for low-income earners.
It was part of this year's plan to stimulate investment and consumption in an attempt to create economic growth and ensure social welfare.
The Ha Noi Natural Resources. Environment and Housing Department estimated that about 10,000 households in Ha Noi had been pressed about houses before the city expanded.
Yet, Phong said that investors were unwilling to invest in building houses for low-income earners because it was not at all lucrative.
Source: Vietnam News
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