Burma Govt Plans 30,000 New Affordable Homes in Rangoon

By Kyaw Hsu Mon 12 March 2014

RANGOON — The Burma government’s housing department is planning to build 30,000 new low-cost homes in townships on the outskirts of the country’s largest city, an official said Wednesday.

Moe Thida, assistant director of the planning division at the Department of Human Settlement and Housing Development—part of the Ministry of Construction—said the department was putting in place ambitious building plans for the 2015-16 fiscal year. Speaking to The Irrawaddy at this week’s Construction Summit, at Rangoon’s Parkroyal Hotel, she said a total of 30,000 low-cost housing units would be built in Hlaing Tharyar, Shwe Pyi Tha, North Dagon and South Dagon townships.

“For the prices of the low-cost housing, we will have to consider how much we can cut the prices. Recently, construction materials and labor costs are significantly increasing. Even excluding the cost of the land, to build one housing unit now costs between 10 million and 12 million kyat [US$10,000-$12,000],” she said.

She said the department had built 55,000 low-cost housing units in Rangoon in the 20 years up to 2010. However, the government does not own much land in the central commercial areas of the city, so most of the housing developments are on the city’s edges.

“We’re building infrastructure in low-cost housing areas, such as the outskirts of Rangoon,” she said.

In recent years, land prices Rangoon have risen to levels out of reach for most people. In commercial areas around the city’s downtown, land can fetch as much as $1,500 per square meter.

In an attempt to restrict the growth in land prices, the Rangoon divisional government in October introduced fixed tax rates on the sale of property in the city. Prices have since stopped rising—mainly because high-value transactions have all but dried up—but rental rates in the former capital are still going up.

Yangon City Development Committee (YCDC), the administrative body of Rangoon city, is also planning to build more low-cost housing on the outskirts to help balance supply and demand.

“The best way to reduce the property prices in Rangoon is to implement many housing projects here,” Toe Aung, deputy head of YCDC’s urban planning department told The Irrawaddy last year, pointing to three YCDC projects in North Dagon and South Dagon.

In order to own government-built affordable housing, residents must complete an arduous application process with the respective housing department, and hope to be selected in a lottery. Privately built affordable homes are also an option, but developers say they cannot find land on which to build.

Ko Ko Htwe, the chairman of Taw Win construction, which has built two low-cost housing developments in Thamine and Insein townships, said land prices were stifling much-needed home building.

He called for the government to allow private developers to build low-cost housing on state-owned land in Rangoon.

“If the government asked me to build 20,000 units right now, I could do it, because I already have a system for building low-cost housing. With five more people like me, we could create a lively market,” he said.

“However, I am still thinking about whether to build another low-cost housing project in Rangoon. I can’t find land at a reasonable price.”

Ko Ko Htwe said he had built some 3,300 low-cost housing units in Rangoon in the past, at a cost of 16.5 million kyat per unit, or about $16,500. With the higher land prices, he said, it would now cost close to 70 million kyat per unit.

“The trouble is we can’t control the prices once we’ve sold the properties. Sometimes it’s the consumers themselves who are playing the market,” he said.