Low-income housing illegally sold to speculators

TN News

Email Print

Tougher laws, stricter verification of criteria needed


Homebuyers submit purchase applications at a low-cost housing project in Ha Dong District, Hanoi

A number of illegal trading cases in low-income housing as well as registration fraud have been uncovered in the capital city, exposing policy shortcomings.

It is evident that there are people purchasing the apartments, not to live, but to resell them and earn profits.

Hanoi police discovered the first case of illegal trading in low-cost housing in May. Cao Thi Loan was found to have sold her VND600 million (US$29,000) apartment to another buyer for VND1.1 billion.

The apartment belongs to the Ngo Thi Nham Building in Ha Dong District, the first-ever low-income housing project in Hanoi. Eligible buyers from the project are not allowed to sell these apartments to anyone other than the developer in the first ten years.

The high demand for housing among low-income earners unable to buy properties at market prices prompted the government to launch several affordable housing projects.

It has provided preferential treatment in terms of land prices, interest rates and corporate income tax and so on, so that low-income earners could afford to buy apartments at lower prices than in the market. Property prices in Vietnam are among the highest in the world.

Strict criteria on income, residency and social contributions were formulated to make sure the houses end up with the right buyers.

According to a decision by the Hanoi People's Committee, families without a home or with an average housing area of less than five square meters per head can register to buy low-income housing. The decision also stipulated that buyers should have incomes lower than the city average. In 2010, the average annual income of a Hanoian was VND37 million.

RELATED NEWS

However, it has been found that some apartments developed for the poor have been offered to better-off buyers.

Many apartments in these projects are equipped with expensive home appliances. Some households even own cars.

Nguyen Van Da, deputy general director of construction firm Vinaconex Xuan Mai, which developed the Ngo Thi Nham Building project, said commune level governments should strictly verify facts before confirming information in the applications of those registering to buy low-income housing.

In addition, tax agencies should check the income of each person in such households, he said.

Three months after receiving the apartments, the owners of 69, or 21 percent of the total apartments in Ngo Thi Nham Building, have not moved in.

Now, developers of low-income housing projects are in charge of examining and ensuring that those who register to buy their products meet all the criteria set. However, they say that they do not have enough manpower to examine thousands of applications. The work should be done by state agencies, they say.

To prevent fraud in low-income housing, the Hanoi Department of Construction has asked developers to add provisions to their house sale contracts under which the apartments will be revoked if buyers do not move in after three months of taking possession.

According to the department, 3,000 low-income apartments have been sold so far, including those that are under construction and those that have been completed. The city plans to construct over 7,000 low-income apartments this year.

More Business News