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Urban Development and Housing Sector in Viet Nam

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Urban Development and Housing Sector in Viet Nam JBIC Research Paper No. 3 Urban Development and Housing Sector in Viet Nam December 1999 Research Institute for Development and Finance Japan Bank for International Cooperation JBIC Research Paper No. 3 Japan Bank for International Cooperation (JBIC) Published in December 1999 © 1999 Japan Bank for International Cooperation All rights reserved. This Research Paper is based on the findings and discussions of the Research Institute for Development and Finance, JBIC *. The views expressed in this paper are entirely those of the authors and do not necessarily reflect those of JBIC. Some sources cited in this paper may be informal documents that are not readily available. No part of this publication may be reprinted by any means without prior permission from JBIC. *Japan Bank for International Cooperation (JBIC) was established in October 1999 as an organization that conducts Japan’s external economic policy and economic cooperation. JBIC is pursuing a more enhanced role by integrating the functions of two merged organizations: The Export-Import bank of Japan (JEXIM) and the Overseas Economic Cooperation Fund, Japan (OECF). Upon the establishment of JBIC, the Research Institute for Development and Finance (JBICI) was created as its research arm. Its research activities are geared toward improving the overall quality of JBIC’s operations through systematic analysis of various issues and policies related to JBIC’s activities. JBICI was established by merging the two former research institutes: the Research Institute for International Investment and Development (RIIID) of JEXIM and the Research Institute of Development Assistance (RIDA) of OECF. Foreword In 1992, the Overseas Economic Cooperation Fund, Japan (OECF), whose functions have been transferred to the Japan Bank for International Cooperation (JBIC), resumed providing concessional loans to Viet Nam. The ODA loan commitments to Viet Nam aggregated 506.4 billion yen, or approximately US$ 4.6 billion, consisting of 56 loans as of March 30, 1999. JBIC has been increasing its lending operations for urban infrastructure development in Viet Nam. Information regarding urban development and the housing sector, therefore, is quite important for JBIC’s operational references. This study aims at examining the current status and issues of urban development and housing in Hanoi and Ho Chi Minh City. The authors of this report are Kengo Mizuno, Economist, Research Institute for Development and Finance (JBICI) and Keitaro Ishigami, Consultant, Nomura Research Institute, Ltd., Japan, in collaboration with Institute for Urban Technology & Development, Viet Nam. Naohiro Kitano, Director of JBICI supervised the study, and Dr. Tetsuo Kidokoro, Senior Research Adviser to JBICI, and Associate Professor, Department of Urban Engineering, University of Tokyo provided valuable comments. The authors and I appreciate the cooperation given by Vietnamese authorities concerned, housing developers and financiers, and donor agencies. Thanks also goes to the Japan External Trade Organization which provided us with a conference room for the workshop held in Hanoi in July 1999. We hope that this report contributes to building of a common knowledge base on this subject. December 1999 Koichi Kosumi Executive Director Research Institute for Development and Finance Japan Bank for International Cooperation ｉ Table of Contents Foreword ......................................................................................................................i Table of Contents ..............................................................................................................ii List of Figures...................................................................................................................v List of Tables....................................................................................................................vi Glossary of Acronyms ......................................................................................................ix EXECUTIVE SUMMARY ................................................................................................. I Chapter I INTRODUCTION ........................................................................................1 1.1 BACKGROUND AND PURPOSE OF THE STUDY ...................................1 1.2 METHOD OF THE STUDY ........................................................................1 1.3 ORGANIZATION OF THE STUDY ............................................................2 Chapter II URBAN DEVELOPMENT POLICY............................................................3 2.1. ADMINISTRATIVE STRUCTURE .............................................................3 2.2. FUNCTIONS OF RELATED AGENCIES...................................................4 2.2.1 National Level .......................................................................................4 2.2.2. Provincial Level .....................................................................................7 2.3. OVERVIEW OF URBAN DEVELOPMENT ...............................................9 2.3.1. Government Perspective on Urban Development.................................9 2.3.2. Urban Plans...........................................................................................9 2.3.3. Policies Changes Planned....................................................................16 2.3.4. Hanoi Urban Development Master Plan.............................................17 2.3.5. HCMC Urban Development Master Plan ...........................................20 2.4. LAND USE PLAN AND CONSTRUCTION APPROVAL .........................22 2.4.1. Urban Planning...................................................................................22 2.4.2. Approval Process for the Urban Development Master Plan ...............24 2.4.3. Construction Approval.........................................................................25 2.4.4. Regulation on Management of Investment and Construction (1996) ...................................................................................................26 2.5. TYPES OF URBAN DEVELOPMENT......................................................32 ii 2.5.1. Three Types of Development Pattern ..................................................32 2.5.2. Implementation Procedures ................................................................34 2.5.3. Other Development Schemes ..............................................................36 2.6. RECOMMENDATIONS ............................................................................37 Chapter III REAL ESTATE INSTITUTION.................................................................38 3.1. LAND-RELATED LEGAL FRAMEWORK ...............................................38 3.1.1. The Framework ...................................................................................38 3.1.2. Rights of Land Users ...........................................................................47 3.1.3. Transaction of Housing and Residential Land Use Rights .................47 3.1.4. Allocation and Lease of Land ..............................................................49 3.1.5. Actual Transactions.............................................................................53 3.2. ISSUE OF THE LAND USE RIGHTS CERTIFICATE ............................58 3.2.1. Hanoi....................................................................................................58 3.2.2. HCMC ..................................................................................................62 3.3. REAL ESTATE TAXATION.......................................................................66 3.3.1. Real Estate Taxes. ...............................................................................66 3.3.2 Calculation...........................................................................................67 3.4. REAL ESTATE BROKERAGE INSTITUTION ........................................70 3.5. RECOMMENDATIONS ............................................................................70 Chapter IV HOUSING DEVELOPMENT....................................................................72 4.1. OVERVIEW OF HOUSING POLICIES ....................................................72 4.1.1. Housing Policies in the Past ................................................................72 4.1.2. National Strategy on Housing up to the Year 2010 ............................76 4.1.3. Hanoi Housing Development Program to the Year 2010 ....................78 4.1.4. HCMC Housing Development Program..............................................85 4.2. HOUSING DEMAND AND SUPPLY ........................................................87 4.2.1. Overview..............................................................................................87 4.2.2. Hanoi....................................................................................................88 4.2.3. HCMC ..................................................................................................89 4.3. HOUSING MARKET.................................................................................91 4.4. STRUCTURE OF HOUSING SUPPLY .....................................................92 4.4.1. Hanoi....................................................................................................92 4.4.2. HCMC ..................................................................................................93 4.4.3. The Comparison...................................................................................94
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