Despite years of implementation, the supply of social housing remains far below demand among workers. One of the key reasons behind the underperformance of SH development is the persistent bottlenecks relating to legal procedures, capital, and land availability.
Only 15.6% of the target achieved
In January 2023, the Prime Minister approved a plan to build at least one million social housing units. The programme targets low-income households and industrial workers during the 2021–2030 period. So far, only 657 projects have been launched, with only 15.6% of the 2025 target having been completed. A 120 trillion VND credit package allocated for this sector is also being disbursed at a sluggish pace.
According to Dr Nguyen Van Dinh, Chairman of the Viet Nam Association of Realtors, the main challenge lies in the complex administrative procedures that make it difficult for developers to carry out projects. Lengthy and convoluted processes drive up costs and discourage developers from participating in social housing projects.
Additionally, many localities have yet to allocate suitable land for social housing development. In some cases, land has been allocated but lacks the necessary infrastructure, making it unfeasible for project implementation. When investors have to secure land and clear sites themselves, driving up overall project costs. Meanwhile, mechanisms for attracting private land and enforcing the 20% land allocation within commercial housing projects remain unclear, leaving this resource largely untapped.
Furthermore, although banks have introduced various mechanisms and credit packages for social housing development, developers still face hurdles due to strict borrowing conditions, loan procedures, and interest rate requirements.
From a business perspective, Pham Cong Doan, Deputy General Director of Arita Joint Stock Company, noted that legal procedures for homebuyers to access social housing are still overly complicated, hindering project implementation. The process for verifying buyer eligibility requires applicants to prove multiple criteria, such as not owning property, having low income, and working and residing in the locality. Freelance workers in particular struggle to obtain income verification under forms issued by the Ministry of Construction, as many local authorities either refuse to confirm or fail to respond in writing.
He also highlighted issues in verifying property ownership tied to land, which has led to the rejection of many applications. There remains no clear inter-agency mechanism for verifying buyer eligibility, especially for out-of-province workers. Many localities have struggled with processing applications, process paperwork slowly, and inadvertently infringe on the rights of citizens while delaying project timelines.
Bold reforms to unlock social housing
At a recent seminar titled “Investing in Social Housing Development: A New Context, New Opportunities”, Tong Thi Hanh, Director of the Department of Housing and Real Estate Market Management under the Ministry of Construction, stated that the newly approved resolution piloting special mechanisms for social housing introduces a host of bold reforms aimed at encouraging enterprise participation and accelerating nationwide project implementation.
Projects using standardised, typical designs will be exempt from construction permits. Additionally, the use of streamlined contractor appointment procedures is expected to cut implementation time by up to 90% compared to traditional bidding processes. Prices and lease-to-own rates for social housing units will be calculated by investors, subject to audit and oversight by provincial authorities, enhancing transparency, autonomy, and reducing delays.
A notable highlight is the proposed establishment of a National Housing Fund, which would provide a stable, revolving supply of social housing, with a focus on supporting vulnerable groups. The fund would mobilise resources from the State, commercial housing developers, homebuyers, and individual and organisational contributors, and encourage developers to contribute apartment units as part of their investment. The fund is expected to concentrate on developing long-term rental housing, ensuring tenants can live securely without the fear of abrupt eviction at the end of lease terms.
In terms of governance, rental housing will be managed on a rotational basis, once a tenant becomes eligible for commercial housing, the unit will be reclaimed and allocated to another worker. The National Housing Fund is expected to serve as a cornerstone social policy instrument, calling on businesses and the community to help build a sustainable social housing ecosystem.
Allowing investors to be assigned projects without competitive bidding, provided public funds are not used, will significantly shorten implementation timelines, bring greater transparency, and serve as a strong incentive for developers. Once applied, this regulation is expected to streamline project preparation, speed up delivery, and reduce opportunity costs for enterprises, motivating capable and committed developers to get involved.
Dr Nguyen Minh Phong, an economic expert, stressed that amid the growing urgency of housing demand among low-income earners and workers, mobilising sufficient resources, particularly capital, is critical to successful implementation. He proposed a package of synchronised financial and policy solutions.
These include simplifying disbursement procedures for the 120 trillion VND loan package and lowering social housing lending rates to below 5%, while expanding the pool of eligible borrowers. He also called for increased State budget allocations for rental SH, credit guarantee support, tax exemptions and reductions, and allowing trade union funds to be channelled into social housing development. Land designated for social housing should be made public, standardised, and prioritised in industrial parks and new urban areas. At the same time, investment trust funds should be established, the issuance of green bonds encouraged, and public–private partnerships strengthened in the management and operation of social housing projects.
The investment process for social housing projects has now been shortened to under 12 months, cutting project timelines by up to 70% compared to previous procedures. All these reforms aim to encourage bold participation from investors.
