Ho Chi Minh City authorities have decided to review resettlement housing projects in the city to prevent the current situation of surplus in certain areas and reduce wastage of scarce State-budget funds.

Nguyen Huu Tin, vice chairman of the Ho Chi Minh City People's Committee, said the administration has ordered the Department of Construction to check and reassess the ability of those involved in developing resettlement housing, particularly in the Thu Thiem New Urban Area.

He said this is a step being taken to make sure that the projects are completed on schedule.

Tin's requirement was made in the context of many resettlement housing projects having apparently no plans for completion. This has caused many obstacles for the city's resettlement plans for households and individuals who have to move when their land is revoked for various purposes including national defence, national security, national benefit and public benefit in accordance with the approved master plans.

In the Thu Thiem New Urban Area in District 2 alone, about 2,000 apartments that were planned for resettlement have no completion date set. The list of tardy firms in this regard include the Nam Rach Chiec Company with 712 apartments, the Duc Khai Joint Stock Company with 1,080 apartments, and the Vietracimex-Poca.C Joint Venture with 201 apartments, according to a report in the Thoi Bao Kinh Te Viet Nam (Vietnam Economic Times).

The report also says that the Thu Thiem area will likely face an oversupply of resettlement housing since it is predicted to need only about 1,800 apartments as against the 12,500 that are to be built there.

This has prompted calls for the city to reconsider construction of these apartments in the area so that the 13 or 14 trillion VND (616.11 million USD or 663.5 million USD) needed to realise the plan can be saved.

To deal with the oversupply problem, the city government has decided to convert 1,769 apartments from the resettlement housing fund into social housing that can be sold or rented.

For instance, the HQZ Plaza project, whose construction begun on August 17, is one of the four that have been converted from resettlement to social housing.

Officials hope that this conversion will help settle the current redundancy of resettlement housing, because social housing projects have many preferential features that make it easier to sell them, including exemption of land use fees, and a 50 percent reduction in corporate income tax and value-added tax.

The newly issued Decree N°188/2013/ND-CP on construction and management of social housing will offer several new incentives to encourage investment in social housing projects when it takes effect on January 10, 2014.

Under the new decree, in addition to current preferences, enterprises investing in social housing would also be able to receive loans at preferential interest rates from credit institutions including commercial banks.

The decree asks credit institutions to set aside at least 3 percent of their total loans for social housing developers and buyers at reasonable interest rates and payment terms that match the borrowers' repayment capabilities.

Social housing developers will also be able to access preferential loans from local State budget sources, funds raised through bonds issued by local authorities, housing development funds and other capital sources.

Also under the new decree, buyers of social housing can sell their property after five years instead of the current 10 years.-VNA