Resolution No. 34/2007/NQ-CP On certain solutions to implement the renovation and reconstruction of old dilapidated apartment buildings

Currently, there are many apartment buildings constructed before the 1990s in urban areas throughout the country that are severely damaged or deteriorated and need to be renovated and reconstructed.

At the meeting on May 3 and 4, 2007, the Government resolved the following issues:

I. OBJECTIVES AND REQUIREMENTS

1. Unify the policy to implement the renovation and reconstruction of old dilapidated apartment buildings to create new residential areas with better quality, contributing to improving and enhancing living conditions for the people, renovating the architectural face of cities towards modernity and civilization.

2. The renovation and reconstruction of old apartment buildings must be carried out according to the principle of socialization, exploiting benefits from projects to self-balance finances and ensure sufficient housing funds to serve relocation needs in place, minimizing investment from the state budget, ensuring harmonious interests between housing users and investors. The State prioritizes the common interests of the community with social goals. Ensure that households relocated have better living conditions than their previous residences in terms of area, quality, and living environment. Demolition of houses for the purpose of renovating and reconstructing old apartment buildings must comply with the provisions set forth in Section 4 Chapter IV of the Law on Housing.

3. Local authorities need to develop specific timelines and plans for the renovation and reconstruction of old apartment buildings within their jurisdictions, prioritizing the implementation of projects for severely damaged buildings with unsatisfactory living environments. Strive to achieve the goal of completing the renovation and reconstruction of old dilapidated apartment buildings that have exceeded their service life in urban areas nationwide by 2015.

4. Renovation and reconstruction work of old apartment complexes must be carried out comprehensively according to an overall project, with reasonable planning and architectural schemes, having a synchronized technical infrastructure and social infrastructure for the entire area to be renovated, in line with modern construction standards to meet current and future urban living needs; avoid fragmented, isolated, and small-scale implementation; pay attention to utilizing basements to serve public service needs (parking lots, shopping centers, etc.).

5. For severely damaged and dangerous old apartment buildings, localities need to have emergency relocation plans for households currently residing there to carry out demolition and reconstruction. In cases where demolition and reconstruction are mandatory but economic sectors cannot be mobilized to participate in investment, the People's Committees of provinces and centrally governed cities need to direct relevant agencies to establish specific projects and plans to implement reconstruction using the state budget.

6. Promote the role and responsibility of local authorities and the people in the reconstruction of old apartment buildings. Effectively implement propaganda and mobilization work combined with decisive and timely measures according to the law to ensure the implementation of projects in accordance with the schedule for the common benefit of the community, ensuring social stability and order.

II. SPECIFIC SOLUTIONS AND MECHANISMS, POLICIES

1. Solutions to attract investors:

a) The People's Committees of provinces and centrally governed cities with old dilapidated apartment buildings (hereinafter referred to as provincial People's Committees) are responsible for directing competent agencies to organize surveys, evaluations, and publicly announce lists of old apartment complexes needing renovation and reconstruction within their jurisdictions to attract domestic and foreign investors to register participation. For projects without participating investors, provincial People's Committees are permitted to select project sponsors. If two or more investors register to participate, the sponsor should be selected through bidding. The selection of project sponsors follows the principle of prioritizing investors with experience, financial capability, and the most reasonable temporary and resettlement plans;

b) Provincial People's Committees are responsible for directing the review of projects for the renovation and reconstruction of old dilapidated apartment buildings assigned to sponsors but not implemented or implemented slowly according to the specified schedule, particularly focusing on reviewing the sponsors' capabilities in terms of experience, financial capacity, and resettlement arrangements. If the sponsor does not meet the requirements, a new sponsor with adequate capacity must be immediately appointed. The former sponsor will be reimbursed for reasonable expenses incurred. Encourage capable and experienced foreign investors to participate in projects for the renovation and reconstruction of old dilapidated apartment buildings;

c) Allow project sponsors to decide on selecting consulting units, construction contractors, or self-design and construct (if they have the required capacity under the Construction Law) for individual works or works within the scope of the project funded by the sponsor (for works funded by the state budget, bidding must be conducted);

d) Provincial People's Committees are authorized to issue mechanisms and policies within their authority to encourage economic sectors to participate in the renovation and reconstruction of old apartment buildings in compliance with investment laws and the specific situation of each locality.

2. Solutions regarding planning and architecture:

a) People's Committees at all levels, within their jurisdiction, are responsible for organizing the establishment (or adjustment) and approval of detailed construction planning (scale 1/2,000) for areas with old dilapidated apartment buildings or those that have exceeded their service life within their administrative boundaries. During the process of establishing (or adjusting) detailed construction planning, opinions of related organizations and individuals must be solicited, and after approval, the plan must be widely and publicly announced within the administrative boundary managed by them so that organizations and individuals within the planned area can know, inspect, and implement according to the Construction Law.

b) During the process of establishing (or adjusting) and approving detailed construction plans, the Provincial People's Committee is permitted to review and adjust planning indicators (including building density, land use coefficient, population scale, floor height) for areas with old apartment renovation projects to ensure financial balance, economic and social efficiency of each project and be consistent with specific conditions of each locality;

c) When carrying out the renovation and reconstruction of old apartments, it is necessary to prioritize allocating a certain area to serve public needs; emphasizing diversification in designing new apartments of different sizes to meet the needs of various groups. The minimum area of an apartment allocated for compensation for households being resettled must comply with the minimum area standard for social housing as stipulated in the Law on Housing (each apartment shall not be less than 30 square meters). The minimum area of an apartment intended for business must comply with the minimum area standard for commercial housing (each apartment shall not be less than 45 square meters).² floor).² floor).

3. Land solutions:

a) The Provincial People's Committee considers and permits the project investor to change the purpose of using part of the land area within the project to serve business and service needs to ensure financial effectiveness of each project based on compliance with the detailed construction plan approved by the competent authority;

b) The project investor is exempted from land use fees and land lease fees for the entire land area assigned (or leased) to implement the project (including the portion of land area permitted to change its purpose of use within the project according to the scheme approved by the competent authority).

4. Financial solutions:

a) Depending on the specific conditions of each locality, the Provincial People's Committee considers and decides to permit the project investor to borrow a proportion of investment capital (up to a maximum of 70% of the value of construction works and equipment of the project) from the Development Investment Fund or the Housing Development Fund of the locality (if available); decides on the provision of investment capital to build technical infrastructure outside the scope of the project and some essential social infrastructure works within the project;

b) The project investor is subject to a corporate income tax rate of 10% for 15 years, starting from the date of commencement of business operations, exempted from tax for 04 years, starting from when taxable income is generated, and reduced by 50% of the tax payable for the next 09 years; for the area of housing serving on-site resettlement which is not subject to VAT;

c) Organizations, households, and individuals eligible for on-site resettlement are exempted from stamp duty when obtaining the Certificate of House Ownership Rights;

d) In cases where there is no need for on-site resettlement, if the owners sell their old apartments to the project investor to move to another place of residence, they are exempted from taxes related to the sale and purchase of apartments as well as personal income tax (if applicable);

đ) The project investor is permitted to operate according to the provisions of the law for the remaining apartment areas and business and service facilities within the project (if any) after completing on-site resettlement;

5. Solutions for compensation, temporary accommodation, and resettlement:

a) The project investor must establish a compensation, temporary accommodation, and resettlement plan for those legally owning and using houses in old apartments to submit to the competent authority for examination and approval before demolishing the old apartments;

b) Compensation, temporary accommodation, and resettlement are implemented through payment in cash or by providing housing within the project (after renovation and reconstruction) or by providing housing at other locations;

c) In cases where the owner of an apartment does not have a need for on-site resettlement after the completion of the project, they are allowed to sell their apartment to the project investor at an agreed price before the demolition of the old apartments;

d) Those currently renting state-owned old apartments (not yet purchased under Decree No. 61/CP dated July 5, 1994 of the Government), if they wish to own a new apartment, can purchase it at a price set by the Provincial People's Committee; if they wish to continue renting, they can rent a new apartment at the social housing rental rate issued by the Provincial People's Committee;

đ) Cases of self-extension or construction on illegally occupied land within the project area will not be compensated for land (except for cases that have been granted a Certificate of House Ownership and Land Use Right according to the law), but will be prioritized to purchase apartments within the project at the business price (if needed) and will be supported financially equivalent to 10% of the cost of constructing the new structure to facilitate demolition and relocation;

e) Existing social infrastructure works (kindergartens, schools, health stations...) in the old apartment area, if they need to be demolished, the project investor is responsible for compensating the owner in cash or with a new facility of equivalent size to the area reclaimed before demolition;

g) Permitting the project investor to apply the following mechanisms:

- Providing additional area or compensating in cash for organizations, households, and individuals eligible for resettlement (including those who already own or are renting housing) to achieve the goal of quickly clearing the site and accelerating the project progress while ensuring investment efficiency;

- Cases where residents living on lower floors need to move to higher floors will be considered and provided with additional area (or compensated in cash) depending on the specific conditions of each project;

- Apart from the compensated area, including any additional area provided as support (if any), any surplus area of the resettlement apartment (if any) will be paid for at the business price;

- In cases of large families requiring household separation during resettlement, those in need should register early with the project investor so that the investor can prioritize selling or leasing additional apartments within the same project at the business price.

- Households owning areas on the first floor (ground floor) of old apartment buildings that must move to higher floors upon completion of the project shall be given priority to lease one unit of housing or business premises within the scope of the project (if any) for a term and at a rental rate agreed upon.

6. Post-investment project management:

a) The project investor is responsible for managing and operating the apartment building after renovation and reconstruction in accordance with the Regulations on Management and Use of Apartment Buildings issued by the Ministry of Construction;

b) Technical infrastructure works funded by the state budget (if any) shall be transferred to local specialized management units;

c) Social infrastructure works not intended for commercial purposes (if any) shall be handed over to specialized management agencies or operated under socialization principles;

d) Depending on the specific conditions of each project, the investor may arrange and utilize a portion of the apartment building area (after renovation and reconstruction) to serve business and service needs to offset common management and usage costs, thereby reducing the expenses that residents must contribute when the apartment building is put into operation.

III. IMPLEMENTATION

1. Responsibilities of Ministries

a) Ministry of Construction:

- Promptly study and promulgate Building Planning Standards, specifying detailed criteria related to the renovation and reconstruction of old apartment buildings to be uniformly applied nationwide;

- Guidelines for assessing methods and quality standards for old apartment buildings requiring demolition for renovation and reconstruction;

- Monitor, urge, inspect, and compile reports regularly to the Prime Minister on the implementation of this Resolution. Any difficulties must be promptly referred to the Prime Minister for guidance;

b) Ministries: Planning and Investment, Natural Resources and Environment, Finance shall organize research and promulgate according to their authority or submit to competent authorities for issuance of amendments and supplements to relevant mechanisms and policies concerning the renovation and reconstruction of old apartment buildings that are damaged or deteriorated, ensuring compliance with this Resolution for uniform application nationwide;

2. Provincial People's Committees and municipalities directly under the Central Government, where there are old apartment buildings requiring renovation and reconstruction, shall be responsible for formulating specific mechanisms and policies on reconstructing old apartment buildings based on the provisions of this Resolution, suitable to local conditions; develop timelines, programs, and plans for renovating and reconstructing old apartment buildings that are damaged or deteriorated within their jurisdictions until 2010 and subsequent years; promptly reflect difficulties and report results regularly to the Ministry of Construction for compilation and reporting to the Prime Minister;

For severely damaged or critically deteriorated apartment buildings, immediate measures should be taken to relocate current residents to ensure safety of lives and property while carrying out demolition and reconstruction;

3. Effective date

This Resolution shall take effect fifteen days from the date of publication in the Official Gazette.

MINISTERS, HEADS OF MINISTRY-EQUIVALENT AGENCIES, HEADS OF GOVERNMENT-RELATED AGENCIES, CHAIRMEN OF PROVINCE PEOPLE'S COUNCILS, AND CHAIRMEN OF CITY PEOPLE'S COUNCILS DIRECTLY UNDER THE CENTRAL GOVERNMENT ARE RESPONSIBLE FOR ENFORCING THIS RESOLUTION./.