|
Over-5 ha of urban area must reserve 10% of land for low-cost products
The investors of commercial housing projects and new urban areas, with land of more than 5 ha, may have to reserve at least 10% of the land fund to build low-cost houses, if the suggestion by the Ministry of Construction (MOC) is approved by the Government.
According to MOC, besides a lot of benefits investors can enjoy when building low-cost products, investors, when reserving 10% of the land fund of their projects to build low-cost products, will also be able to be exempted from the land use fee and from the land leasing fee for the land area.
The suggestion not new
In fact, the Government once asked investors of commercial projects to reserve their land fund to develop low-cost products to serve the development targets of localities.
The Government’s Decree 90 stipulates that provincial authorities have the right to make decisions requesting commercial housing projects, with a scale of over 10 ha, to use a part of the projects’ land fund (no more than 20%) to build the technical infrastructure basis, so that the local authorities can develop low-cost housing.
The regulation just encourages, but does not enforce, investors to join in the development of low-cost housing. Experts once warned about the feasibility of the regulation. The HCM City Real Estate Association (HOREA) sent a document to state management agencies, asking the state to set up other solutions to the low-cost housing program, instead of applying the regulation which it sees as unfeasible.
HOREA’s Secretary General Do Thi Loan, said that 20% of the land fund proves to be a very big proportion, which will prompt investors to develop less-than-10-ha projects in order to avoid the duty. Meanwhile, Vietnam should not encourage small scale projects.
And now, if the suggestion by MOC is approved, even the investors of the projects, with the scale of over 5 ha, will also have to fulfill this duty.
And once again, doubts have been raised about the feasibility of the regulation. Similar requirements were once set up and then were removed in Hanoi and HCM City in late 2005 and early 2006. The HCM City authorities had to remove the regulations on using 10% of the land fund to build houses for the poor, and selling 20% of the house fund of the projects to the city at cost.
Hanoi had to remove the regulation that asked real estate developers to sell 50% of the apartments’ area to low-income employees.
Will it be feasible?
The investors of the real estate projects in Hanoi once felt unhappy with the city’s regulation that investors have to reserve 20% of the land fund, or 30% of the house fund, to add to the city’s house fund. This was considered the duty that investors had to fulfill in return for the right to implement commercial projects.
The basis for the city to promulgate the regulation was the 1993 Land Law.
However, some lawyers have discovered that the 1993 Land Law did not consist of any provisions which can serve as the basis for the city’s authorities to promulgate the regulation on reserving 20% of the land fund or 30% of the house funds to add to the city’s house fund. And a question has been raised: is it a kind of administration order to take back parts of projects?
Meanwhile, according to Dr. Pham Sy Liem, Deputy Chairman of the Vietnam Construction Federation, it is not necessary to ask commercial real estate developers to fulfill their duties, while there is still a big fund of idle land, which has been kept by incapable investors or speculators. Liem said that if the state takes back the land, it will have several thousands of ha of land to develop low-cost houses.
vietnamnet
|
