Small businesses are concerned when Hanoi charges fees for sidewalk businesses

At 10:30 every day, Ms. Huong, the owner of a vermicelli and tofu shop in Van Mieu – Quoc Tu Giam ward, and four relatives started setting up tables and chairs to welcome guests. Since the government tightened sidewalk management, the restaurant had to remove two tables in front of the door, and the number of customers decreased.

After a period of restoring urban order, Hanoi recently proposed renting sidewalks for business purposes, prices ranging from 20,000-45,000 VND per m2 per month, depending on the area and location.

However, many people who make a living on the sidewalk like Ms. Huong expressed concern with the above proposal. “The shop only sells for about two hours a day. By 12:30 there are almost no customers left, so I find it inappropriate to pay rent all day,” Ms. Huong said, and proposed “flexible rent payment by the hour”.

A few hundred meters away, Ms. Kha (owner of the pho restaurant) had just packed up the tables and chairs to “run” the inspection team. However, she hesitates if she has to rent the sidewalk, because the restaurant model requires a large rental area, but customers only come “loudly” for a few hours in the morning. “If there is a policy to charge by the hour of use of the shop, I will rent,” she said.

On the contrary, at busy business locations with a stable number of customers, small businesses hope to soon be able to rent sidewalks, even if only 1-2 m2. In the old quarters of Hoan Kiem ward, premises are often small. The sidewalk is part of the store owner’s “asset” to attract more customers, and is also the “face” of the Capital in the eyes of tourists.

Doing business near the Cathedral, Ms. Hoang Thi Hieu, owner of Hieu Coffee No. 2 Nha Chung, said she is willing to invest in more spacious tables and chairs, contributing to creating the landscape for Hanoi’s famous tourist destination.

Shops around here, including hers, often use cheap plastic chairs. This type is convenient for “running” inspection teams, and is also easy to buy back if it is confiscated. Being able to use sidewalks legally will help them feel secure in investing more in facilities.

In Cau Giay ward, Ms. Hoa – the owner of a bread shop, also wanted to pay the rental fee of more than a dozen square meters in front of the shop, even though this area does not have a sidewalk. The narrow alley was once home to dozens of small businesses from the sidewalk, but now only about half remain.

“I hope to rent locally to maintain a large number of regular customers, instead of moving to another street with wide sidewalks,” she said.

Experts say that the proposal to rent sidewalks is suitable for the needs of the majority, but the implementation stage needs to be carefully calculated.

According to the draft of the Hanoi Department of Construction, business households can only rent paid sidewalks when at least 50% of households and businesses with the right to use the house agree. Architect Tran Huy Anh, Standing Member of the Hanoi Architects Association, believes that this criterion is inappropriate.

According to him, households that are not located on the same frontage, or in a convenient location close to the sidewalk, do not benefit from the policy. Collecting the general opinion of this number will create an unreasonable conflict of interest, instead of restoring urban order as expected by the authorities. “It is a very thin line between legal and illegal disputes,” Mr. Anh said.

This criterion also makes many small businesses and businesses worry that renting sidewalks is just “lucky”. According to the owner of a food service chain (F&B), a large proportion of people support tightening sidewalks, which will disadvantage them when the city collects consensus opinions. This will be a big barrier, especially for chain and multi-store business models.

Architect Tran Huy Anh noted that if sidewalk rental is not strictly managed, the policy risks turning into legalizing encroachment on sidewalks and roadways.

Sharing the same opinion, Associate Professor. Dr. Luu Duc Hai, Vice President of the Vietnam Urban Planning and Development Association, emphasized fairness in sidewalk rental. He recommended that Hanoi should publicly auction the right to rent sidewalks, or give priority to long-term business households to rent on the spot. This is to avoid the situation of “monopoly” on the sidewalk and the ask-give mechanism

The city also needs to have a detailed digital map, clearly identifying which sidewalk areas are eligible for rent, and at the same time apply management technology, avoiding the situation of “renting 1 square meter but encroaching twice as much”.

For business people, policy stability is of greatest concern to them. The owner of an F&B chain said that after the city tightened sidewalk management, a few months ago they changed their business strategy, accepting to rent a larger space to create open space.

If the proposal to charge sidewalk fees is applied, they will be forced to adjust their strategy to find space for the shop. “Policy needs stability for 3-5 years, instead of reversing after a few months,” he commented.