Investors wary of risky renovation of decaying apartment

Investors wary of risky renovation of decaying apartment

Ho Chi Minh City’s construction department has ordered that several blocks of an apartment built more than 50 years ago in Binh Thanh District be reconstructed but investors say they see no profit in the plan.

Built in 1960, Thanh Da is one of the very first apartments in HCMC.

Ho Dac An, who has been living at flat #004 in Block IV in Thanh Da for more than 20 years, said his house is always flooded due to high tides from the Saigon River. The floor of his house has partially sunk due to the water damage.

Meanwhile, Trieu Xuan Xanh, who lives in flat #020 in Block VI, said residents in his block have suffered greatly from the deteriorated conditions of the apartment over the last ten years.

Blocks IV and VI of Thanh Da Apartment have thus been subject to a reconstruction plan by the city’s construction department.

The department director Tran Trong Tuan checked the sites on Wednesday, and worked with local authorities on the plan to relocate residents in the deteriorated apartment blocks. The buildings will then be demolished and the city will seek an investor to set up new apartments on the cleared site.

Residents of the apartment said they had been informed of the relocation and reconstruction plans several times over the last few years, but no plan has ever been implemented, while their living conditions are only worsening.

Population obstacle

The main obstacle deterring potential investors is that construction will be limited to only a few stories.

This is because Ward 27, where the apartment is located, has stipulated that from now until 2020, no more than 3,300 new residents are allowed to live in the locality.

Hence, even if the investors plan an apartment that could house hundreds of new residents, ward regulations will render their plans irrelevant.

Unfortunately, investors will not be able to gain profits from building just a few stories, they say.

The local government of Binh Thanh District said it will petition to increase the population limit in Ward 27 to 5,000 to ease pressure from the investors.

The district and the construction department have reached an agreement that they will use money from the state budget to relocate residents in Block IV and VI to other apartments in Binh Thanh District.

The site will then be cleared and the district will seek to attract investors to build a new apartment there.

The new apartment will serve as a place to relocate residents in other blocks of Thanh Da Apartment, and the progress will be continued until all of the blocks are renovated.

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