Yangon’s urban-development plans are self-defeating, critics say

Residents of Yangon are generally unexcited by the government’s plans to build more low-cost projects, citing the high prices and negative consequences of the projects to land prices and rents in the commercial city.

Asked about this, Zaw Zaw, a resident of a northern section of Dagon Myothit Township, simply said “We can’t afford them.”

“We definitely want to own an apartment, but the government apartments will go to those who are closely associated with it,” Zaw Zaw said, adding that private companies will not build housing at a loss so due to the high cost of land the idea of owning an apartment was “hopeless”.

Su Su, a company worker, said apartment prices were rising due to the construction of low-cost housings, adding: “We can’t even imagine buying a low-quality apartment on the outskirts in Yangon.”

A housewife in Yangon dismissed the government housing projects as gifts to the rich. “The people who actually need a home are sharing apartments with other families. We are facing so many problems because we can’t afford our own apartment. We want to live at our own place,” she added.

She also believed it was not possible to extend the city’s limits. Because the government had granted ownership of land to farmers they had sold it to speculators who allowed them to continue farming it, but held on to the farmland ownership books.

Farmers were now leasing land they used to own, but if the government revoked their right to own land they would protest against the government, even though they had already sold it. Farmland in Twanty, Thanlyin, Dala and Htantapin townships had been sold already to speculators, but owners of expropriated farmland must be compensated at market prices, she said.

From 2005 to 2010 only 36,000 government housing units were built – an average of 7,200 units a year.

Soe Tint, deputy minister of construction, said in January that the government planned to build another 35,000 or so units between 2011 and 2015. Construction Minister Kyaw Lwin then said a total of 4,500 low-cost units will be built in Hlaingthayar and Dagon Myothit (Seikkan) townships within two fiscal years.

Dr Kan Zaw, minister for national planning and economic development, told reporters at this month’s Myanmar Global Investment Forum that the supply of land in Yangon was scant and prices kept rising. High-rise apartment projects are planned and that some of these projects would begin next year. The government’s 20-year national development plan (2011-2031) is now in its second phase (2016-2021), which will be adjusted according to the census results. City development committees in Yangon, Mandalay and Nay Pyi Taw are also drafting plans for construction of more housing, Kan Zaw said.

“Now, we have collected the census data and estimated the current population. We know the population of each township and how many apartments will be required to accommodate the increasing population,” the minister said. “We are drafting these plans with the Ministry of Construction’s department of human settlement and housing development.

Land prices are surging around Yangon on speculation that the city’s limits will be extended, with speculators apparently a few steps ahead of public announcements of new projects.

“By the time Hanthawady airport project was announced, business people had already snapped up acres of land adjacent it in Bago Region,” a retired civil servant said.

During the socialist era, farmers were not allowed to own land, he explained. They have the ownership now but they sell it to speculators.

Urban planning experts have complained that the government’s effort to build low-cost housing have been self-defeating. The projects have merely driven up the cost of land and pushed rents beyond the reach of many families.

Even the lowest-cost affordable apartment units are going for about Ks 20 million (US$20,000) each, a sum few working class families can afford. As a result of the housing crisis, homelessness is surging, families have to share apartments, and others are being driven to the city’s periphery where rents had been cheaper.

City planners are now debating whether or not an expansion of the city’s limits would help.

An urban planning expert said a city has four basic infrastructure needs – clean water, reliable electricity, waste disposal system and roads. None of these were being adequately met in Yangon. To decide whether or not to expand the city’s limits, officials have to consider the rate of migration from rural areas as well as the possible difficulties these migrants will face. Yangon also needs to solve its crime and homelessness problems.

Affordable housing projects are supposed to help curb soaring rental costs, but all they are doing is driving up the cost of land, the critics of these projects say.


NB: The best way to find information on this website is to key in your search terms into the Search Box in the top right corner of this web page. E.g. of search terms would be “property research report”, ”condominium law”, "Dagon City", “MOGE”, “yangon stock exchange”,"MECTEL", "hydropower", etc.

To learn about the business opportunities in Myanmar click here

To evaluate the various segments of the market that you could possibly enter base on your competencies you can do a Custom Market Entry Strategy Research. You can see a sample report at page "Actual Sample of Client Report”. Click here to go to page.

Do you know that IE Singapore is giving up to SGD 20,000 support for Singapore company to venture into Myanmar? To learn more click here