The Vietnamese government has issued Decree No. 108/2024/ND-CP, which regulates the management, use, and exploitation of non-residential public assets, including houses and land. This decree aims to address the issues of abandoned and wasted properties across the country.
Abandoned and Wasted Assets
For over 20 years, residents of Nha Trang City in Khanh Hoa Province have lamented the waste of a prime piece of real estate located at 48-48A Tran Phu and Nguyen Thi Minh Khai Streets, right on the 2nd of April Square. This property, with its beachfront location, has been left unused.
Also in Nha Trang, an 8,000-square-meter plot of land belonging to the Khanh Hoa Radio and Television Station at 70 Tran Phu Street remains vacant. In 2017, the Provincial People’s Committee implemented a project to construct a new office building for the station through a build-transfer partnership with the Phuong Dong Nha Trang Company. However, since the company handed over the project in 2020, this “golden” site has been left unused for four years.
Located to the east of Pham Van Dong Beach, a 4.4-hectare plot of land formerly belonging to the Nha Trang Sao project has been vacant since 2012. The provincial authorities revoked the project and reclaimed the land in 2019, and this “diamond” site has been abandoned and neglected for over five years. Several other properties in the city face similar issues and are awaiting central government guidance for resolution.
Ho Chi Minh City also has its share of abandoned public houses and land, much to the dismay of onlookers. One such example is a plot of land at 162 Nguyen Thi Dinh Street in An Phu Ward, Thu Duc City, which was reportedly unmanaged and vacant in 2018. This site used to house the An Phu Animal Feed Factory of the Saigon Animal Husbandry and Food Processing Company, under the Saigon Agricultural Corporation.
The vacant lot at 48-48A Tran Phu Street. Photo: KY NAM
In Thanh Hoa, the Ham Rong Conference Center, which was inaugurated in December 2012 and opened in November 2014, has not been utilized for its original purpose. From 2015 to 2019, it was used by the People’s Committee of Thanh Hoa City as temporary office space while awaiting the construction of a new administrative center. After that, the center ceased operations and has been abandoned for years. Additionally, several other public buildings in Thanh Hoa City are vacant, including the Thanh Hoa Radio and Television Station, the Military Command Headquarters, and the City Police Headquarters. According to a report by the Provincial Department of Finance, after mergers and rearrangements, there are 537 public buildings and land plots considered redundant, and out of 455 approved for handling, 82 are still awaiting a resolution.
In Hanoi, according to the Municipal People’s Council’s supervision report on the management and use of public houses and land, out of 803 specialized houses, 357 locations were found to be in violation, including subletting, joint ventures, renovations, and illegal construction. Regarding 199 resettlement apartment buildings, with a total area of over 85,000 square meters of commercial service space on the first floor managed by the city, more than 35,000 square meters remain vacant or are being used illegally or inappropriately, accounting for 41%.
Addressing Multiple Challenges
Mr. Tran Hoa Nam, Vice Chairman of the Khanh Hoa Provincial People’s Committee, acknowledged that Decree 108 will help resolve issues related to the management and exploitation of specialized housing and land funds, preventing resource waste. However, he emphasized the need to carefully consider the eligible entities and rental methods before implementation. He pointed out that there should be a correlation between the rental period and the initial investment, as a short rental term might not allow the lessee to recoup their investment. He suggested categorizing the applicable entities and specifying the investment scale and duration.
The Standing Committee of Steering Committee 167 (Ho Chi Minh City Department of Finance) has coordinated with relevant units to advise and submit to the City People’s Committee for comments as prescribed on the expected plan for rearranging and handling houses and land of the Ministry of Finance for 131 houses and land plots with an area of over 257,300 square meters belonging to the central government.
The fund of houses and land under the direct management of the State (vacant land, surplus land after compensation and clearance of projects) but not yet declared and established for state management includes 2,380 houses and land plots with a total area of about 530 hectares.
According to the Thanh Hoa Provincial Department of Finance, the locality has a large number of houses and land plots that need rearranging, a vast area, and many properties lacking legal foundations, making it challenging to implement. The current legal regulations on rearranging and handling houses and land under the Law on Public Asset Management and Use, the Land Law, and guiding documents still have many shortcomings and lack specificity.
Mr. Nguyen Van Thi, Vice Chairman of the Thanh Hoa Provincial People’s Committee, shared that Decree 108 will address some of the challenges in dealing with redundant provincial assets, and the Provincial People’s Committee has directed its implementation. He stated that the province is rearranging usable assets for continued utilization, while those that are not in use will be handled by the Department of Finance, in collaboration with relevant departments, sectors, and localities, through auctions to dispose of the surplus and increase the state budget.
According to the Ministry of Finance, based on reports from 63 provinces and cities on the management, use, and exploitation of the housing fund and land assigned to organizations with the function of managing and trading houses, 31/63 localities have a housing and land fund assigned to organizations that manage and trade houses. These organizations operate under various models, including enterprises, non-business units, and state agencies. They are currently managing a total of 87,664 houses and land plots, with a total area of 23.7 million square meters and a total floor area of over 5.2 million square meters.
Economist Dr. LE DANG DOANH:
Develop a Rigorous Rental Plan
In major cities like Hanoi and Ho Chi Minh City, prime locations are often left vacant due to bureaucratic obstacles, resulting in a significant waste of resources. Meanwhile, the demand for leasing such properties is substantial. Therefore, the issuance of Decree 108 to guide the process of renting public houses and land is very timely and will help address practical challenges. Firstly, local authorities need to inventory and categorize these assets to develop a rigorous auction and rental plan to maximize their potential.
Dr. TRAN QUANG THANG – Director of the Institute of Economics and Urban Management, Ho Chi Minh City, and Member of the Ho Chi Minh City People’s Council:
Need for a Management Mechanism to Optimize Efficiency
Localities should proactively propose solutions for effective exploitation. To achieve this, a strict management mechanism is necessary, utilizing applications and software to reduce costs, prevent losses and waste, and ensure that assets are used for their intended production and business purposes, with transparency and a balance of interests for enterprises and individuals. Finally, all parties must comply with the established regulations, including those related to the Land Law and other relevant management mechanisms.
Renting Through Auctions and Price Listing
Decree 108, which has just been issued, is expected to resolve issues related to the rental regulations for public houses and land. According to the decree, the rental of houses (with associated land use rights) by organizations managing and trading houses shall be conducted through auctions, except in cases where the price listing method is applied. The rental price will be determined through auctions, with a maximum lease term of five years. In cases where the property is temporarily managed pending the resolution of issues, the lease term shall not exceed three years. Contracts can be renewed but not for a period longer than the previous consecutive term. If the lessee is a professional association without a head office or the rent is below VND 50 million/year, the rent shall be applied according to the price listing method.
