Reorganize City and Create More Land Bank

(ĐTTCO)-Ho Chi Minh City is spread across approximately 2,100 sq. kms, so it is unreasonable if people say the City does not have any land left to construct more houses and apartments. However, the current organization of the City and many architectural structures may seem that Ho Chi Minh has vast shortage of construction area.

A corner of HCMC. Photo: HOANG HUNG

A corner of HCMC. Photo: HOANG HUNG

People who are interested in the real estate market, usually see many different market conditions such as land shortage, land surplus, unstable land prices or even unreal land prices. Many of these conditions are dependent on the City’s planning and organizing of its land area.

Limited land bank
 In the 1970s, Philippines decided to develop Manila from 1-center City to a 16-center City. Manila created 16 new economic centers. Some modern cities are Makati (financial city), Quezon (science city). This planning changed Manila.
So far, the two biggest cities Ha Noi and Ho Chi Minh are being developed by using “spread from the center” model. This is like dripping oil into water where the movement of the oil is unpredictable. In 1990-2000, most apartments and buildings were concentrated and clustered in complexes within central parts of these two cities.
Groups of full-service apartment buildings were constructed in District 4, 5, 10 to serve as new home space for residents who previously lived in degraded buildings or settled around crowded wholesale markets and narrow spaces along canals.
Many apartments are built on land areas that the developers bought or leased or on land spaces of degraded department blocks and buildings. These apartments don’t have any service areas. They only offer a congested living space. 
Over time land space in the central parts of the cities has become exhausted and developers have been moving towards suburban areas to invest in projects.
From 2010 to 2018, land in District 4, 10, 11 or Phu Nhuan and Binh Thanh has been strongly deployed. However, after 7-8 years of constant constructions, the remaining space in these districts is also now very limited. 
The investors then again moved towards District 2 or Go Vap and Binh Thanh, but not significantly. They forecast that success rate of projects in above districts is not high, given the under-developed infrastructure and transportation facilities in these areas. 
- In the Northeast, most projects are concentrated around District 2, along Ha Noi highway and Thanh My Loi area. 
- In the West and Northwest, most developers stop at Go Vap District. 
- In the South, projects are mainly in District 7. Only a few investors are interested in Binh Chanh because the apartment projects there are not as profitable as independent houses.
If the City allows this status to last longer, there will be a serious shortage of land for developing bigger projects by 2022.
Notably, since 2015 some developers moved to invest in some neighboring provinces or in the Mekong delta as Ho Chi Minh City is running out of land. The City authorities are seeking government approval to transfer 26,000 ha of agricultural land to residential land. However, if the organization and planning of this project is not done well, this 26,000 ha may be split to many tiny and smaller plots for sale. This will impact the effectiveness of the project. 
Few investors dare to invest in land areas which lack basic facilities of transportation, hospitals, schools, shopping malls, or entertainment parks.
To resolve the land shortage issue or to create new development spaces in some huge land areas like Cu Chi, Binh Tan or District 9, the authorities should reorganize the City and aggressively change perception in planning.  

New perception required
 Many big investors like Vingroup, Tuan Chau, FLC have had their eyes on Cu Chi for a long time but have still not taken any action as they are waiting for a City master plan. Thus Ho Chi Minh needs to change its entire concept of planning and developing the City.
There are two ways to throw stones into a lake. 
First, we throw a big stone into the middle of the lake and the water will then move in concentric circles creating big waves. These waves will then move and spread from the center to the edges but then weaken substantially.
Second, we throw five smaller stones into different parts of the lake and these five stones will create five smaller wave zones. These five wave zones will spread out and merge into each other, thus making the lakes surface more calm.
The first way is being applied in Ho Chi Minh City. The spread of the central wave cannot go far, no matter how large the force we create in the center. The City’s planning should be done in the second way, creating more centers by applying the “multipolar decentralized” model.
In 1995, Ho Chi Minh set the target to develop 2 satellite cities in Northwest of Cu Chi and Hiep Phuoc. But it was not a successful plan mainly because of absence of strong investment of government in the infrastructure and therefore this project did not attract big investors. 
The distance between Cu Chi and Ho Chi Minh is just 30 km, but it takes about one hour to travel from City center to this area. That’s why many investors gave up after considering investment there. 
Cu Chi has huge potential, covers 500 sq. km (one fourth of Ho Chi Minh area), with population of 400,000 people (equivalent to 3 urban wards). This area has a higher terrain, stable hard ground, and is also adjacent to Binh Duong which is a fast growing and proactive province. Cu Chi is connected to ASEAN countries by Moc Bai, Tay Ninh border gates. 
To revitalize Cu Chi area or to reorganize Binh Chanh successfully, Ho Chi Minh should have a master plan, develop the City’s infrastructure professionally and synchronously and implement investments based on new perception.
There is a question, why most investors like to invest in central areas even though these projects are high risk, take longer time and require bigger investment? 
The answer is that central areas have good transportation and infrastructure, and are fully covered by plenty of service facilities. Investment in these spaces is easy for creating a brand name and reputation.
Next question, why does HCMC not consider creating one or two more centers located about 20-30 km from the center? If HCMC can do this, the face of the City will be much different, help attract more investors to Cu Chi, Hoc Mon, Binh Chanh and Can Gio. There will be new cities around the central downtown area.
It is not correct to say Cu Chi, Hoc Mon, Binh Chanh, Binh Tan are sleeping as they are seasonally hot (Cu Chi) and always noisy (Binh Chanh, with illegal construction activities happening both day and night). Unfortunately, such continued activities can only ruin the urban landscape besides creating an ineffective low economy. 

Deputy Professor Dr. Nguyen Minh Hoa

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