Thousands of outdated apartment buildings across Vietnam still haven’t been dealt with due to disagreements about ground clearance.

Thanh Cong apartment building in Hanoi.

Hanoi has 1500 outdated apartment buildings that were built during the1960-1980 period and HCM City has 475 buildings built before 1975. Those buildings have deteriorated very badly, threatening the lives of the local residents. Even though many measures have been proposed, they have been proved to be ineffective. Only 1% of the outdated buildings in Hanoi have been renovated.

The most difficult task is ground clearance. All of the households must agree to the plan and fees. However, in reality, each person has their own idea and no one can reach a common ground.

Le Hoang Chau, head of HCM City Real Estate Association, said that Decree 101 about repairing and renovating outdated buildings has many shortcomings. The articles related to population density, maximum height and resettlement areas must be adjusted.

According to the decree, the building residents will be given a new home for free. Moreover, since 12 buildings are located in HCM City’s centre, their height and the number of apartments will be limited. That means firms will not be able to recover capital from these projects.

“Firms will have to spend billions of VND to help the residents relocate. Not to mention other costs and taxes and fees,” Chau said.

The Ministry of Construction is revising the decree. The revised version will be announced in the final quarter and applied in early 2021. According to the ministry, they want a more harmonised version to bring benefits to all parties involved. However, they are facing challenges with the old legal mechanism.

In order to deal with the problems, they have suggested piloting a new mechanism for the outdated buildings in Hanoi and HCM City.