Ho Chi Minh City Proposes Flexible Housing Development Under New Law

The Vietnamese government has proposed allowing Ho Chi Minh City to flexibly convert between social housing, commercial housing, and resettlement housing as part of a draft law on urban development. This proposal aims to meet the actual housing needs of residents and resolve long-standing challenges in urban development. According to the draft law, the city will be empowered to permit changes in land use for social housing or rental housing projects in accordance with urban development plans, without requiring approval of investment policy. The city will also have the authority to switch between different types of housing, including the functional conversion of public assets, to meet usage demands. In its appraisal document for the draft law, the drafting agency stated that the development of social housing, the renovation of old apartment buildings, and the relocation of housing along canals in major urban areas are progressing slowly due to a lack of mechanisms. Specifically, preferential policies for TOD (Transit-Oriented Development), social housing, or rental housing are insufficient. Therefore, granting Ho Chi Minh City the flexibility to convert between housing types is expected to address the real housing needs of its citizens. Furthermore, the draft law will allow the city to designate developers for social housing, rental housing, and worker accommodation projects built on state-managed land or other land suitable for planning. Households whose land is acquired may purchase or rent social housing without a lottery, and will not need to meet housing ownership or income conditions. Individuals who are resettled in social housing after their land is acquired may also be allowed to sell their units according to market mechanisms once the full payment is made. Additionally, the draft law includes a series of investment incentives for the development, construction, maintenance, and operation of social housing, worker accommodation, public service housing, and other policy-driven housing segments. A similar flexible conversion mechanism was previously approved for Hanoi in the amended Law on the Capital. Hanoi plans to convert unsold social housing after one year, or vacant resettlement housing after a minimum of nine months, into commercial housing, with a maximum conversion rate of 20% of social housing in each project. Ho Chi Minh City has the highest social housing development target in the country, aiming for 199,400 units by 2030. The period from 2026 to 2030 alone requires the completion of over 181,000 units. Since the beginning of the year, nine social housing projects with nearly 11,000 units have commenced construction in Ho Chi Minh City. Nineteen projects, providing approximately 19,000 units, are currently under construction. In the third quarter, 59 projects with nearly 54,900 units are expected to commence construction, with completion anticipated in 2027.