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Published on Tuesday, 22 January 2013 19:38
The Construction Ministry remains optimistic about its low-cost housing projects despite a flood of complaints that unit prices will put them beyond the reach of the people they are supposedly intended for.
Minister Kyaw Lwin told Parliament last week that his ministry is striving to build more low-cost housing and seeking ways to make existing housing more affordable for people with low incomes.
“We are coordinating with the Yangon Region government to house people on low incomes and inviting cooperation from private companies,” he said, describing two low-cost housing projects to be built in Dagon Seikkan Township as a “quick win”.
Kyaw Lwin said construction would begin in the fiscal year beginning in April. Combined, the Ayeyawun and Yadana projects will have 17,000 units.
“A total of 288.24 billion kyats [US$340 million] from the state budget will be used for the construction project in the fiscal year 2013-2014,” he said, adding: “We have also proposed that the government borrow $9.44 million from Exim Bank of China to buy electrical equipment for the project.”
Earlier reports said the Department of Human Settlement and Housing Development would spend K500 billion from the state budget to construct the apartment buildings and then transfer them to the Yangon Region Government for sale.
Aye Aye Myint, deputy director of the department said the apartments would have no land cost because they would be built on state-owned land.
However, despite the free land, the low-income units are expected to cost K 20 million kyats (about US$24,000) apiece.
A construction company owner, who asked not to be named, said this was double the expected price. “People are expecting new apartments at not more than K 10 million per unit. Even if the land plots could be bought at K 5,000 per square foot, the price of the apartment would be K10 million,” he said.
Aung Kyaw Oo, director of the Department of Human Settlement and Housing Development, has said that the payment period had been reduced to 10-15 years and that the least expensive units will cost K8 million.
“We cannot lower prices any further,” he said.
Under this plan, monthly payments would be at least K100,000.
A tenant at low-cost Yuzana Housing in suburban of Yangon said this would be unaffordable because it was half of his family’s income. “I cannot afford to pay K100,000 a month,” he said.
Although the government is using plenty of state money to build housing for low-income families these families cannot afford the prices that are likely to be charged, critics of the projects say. They also say the projects lack transparency.