After more than four years of implementing the one-million social housing units project for the 2021–2030 period, only 85,275 units have been completed, achieving just 8% of the target. To meet the commitment of one million units, Vietnam needs to develop a comprehensive social housing ecosystem centered on its citizens, with close coordination among the government, businesses, banks, and the construction industry.

The dream of affordable housing for millions of Vietnamese workers, from industrial zone laborers to urban youth, is increasingly out of reach amid rapid urbanization and skyrocketing commercial housing prices. The one-million social housing units project (2021–2030), under Decision 338/QĐ-TTg, carries a humanitarian mission, promising to provide housing opportunities for low-income individuals. However, after over four years of implementation, this dream remains far from reality for those who need it most.

A Situation in Need of Improvement

The latest statistics from the Ministry of Construction as of July 2025 paint a concerning picture of the social housing project’s progress. By July 2025, only 117 social housing projects with 85,275 units have been completed, achieving 8% of the 1,062,200-unit target for 2030 and 20% of the 428,000-unit goal for the 2021–2025 phase. At the current pace, without fundamental changes, the one-million-unit target risks remaining a mere “paper figure.”

Even more concerning, of the 686 projects initiated with a total of 627,651 units (59.1% of the target), many are stalled due to legal obstacles: 155 projects (132,791 units) face delays due to land clearance issues and lack of capital, while 416 projects (417,185 units) have not started due to conflicts between the 2024 Land Law and the 2023 Housing Law regarding land allocation and investment approval.

The shortage of social housing is not merely a social welfare issue but also profoundly impacts Vietnam’s socio-economic development. According to a General Statistics Office survey, approximately 70% of industrial zone workers currently live in substandard, unsafe rental accommodations, directly affecting labor productivity and quality of life. This raises serious questions about the sustainability of the current industrial development model and Vietnam’s ability to attract high-quality labor in the future.

Identifying Core Challenges

First and foremost is the unsustainable financial mechanism. The initial 120,000 billion VND credit package, later increased to 145,000 billion VND and implemented from April 2023, has seen only about 3,400 billion VND disbursed by the end of June 2025. This accounts for just 2.3% of the total credit package, highlighting significant inefficiencies in financial policy implementation and severely hindering investment and development activities by businesses in this sector.

Second, the lack of consistency and coherence in the legal framework has created major barriers. A prime example is the inconsistency regarding the 20% land allocation for social housing in Hanoi, where the 2024 Land Law and 2023 Housing Law have not been fully harmonized. This has caused many projects to stall despite thorough preparations by investors.

Third, cumbersome administrative procedures, taking anywhere from 6 to 24 months, have discouraged both businesses and citizens. The project approval process, from securing investment permits and design approvals to obtaining construction permits, requires navigating multiple levels and agencies with varying requirements, creating unnecessary bottlenecks in a context that demands urgency to meet people’s pressing needs.

Finally, the issue of land allocation for social housing poses significant challenges. Many designated plots are located far from industrial zones and lack basic amenities such as schools, hospitals, markets, and public transportation. This not only reduces the appeal of social housing projects but also imposes additional living costs on low-income families.

Learning from Successful Models

To find appropriate solutions, studying and learning from successful social housing models worldwide is essential. Notably, Singapore and South Korea, two countries with highly successful social housing systems in Asia, offer valuable lessons on placing citizens at the center of the entire ecosystem.

(as Singapore’s late Prime Minister Lee Kuan Yew once stated)

Singapore’s social housing model is managed through the Housing and Development Board (HDB), supported robustly by the Central Provident Fund (CPF). A standout feature is that citizens can access loans with preferential interest rates of just 2.5% per year, with monthly repayments capped at under 20% of their income. The HDB serves as a comprehensive “one-stop” agency, overseeing the entire process from planning and investment to construction and distribution of the final product. As a result, Singapore achieves an impressive homeownership rate of over 90%, a rare global success.

South Korea excels in diversifying social housing types, offering options like mini-apartments for singles, public rental housing, and units for young families. With preferential loan interest rates of 1–2% per year and flexible income eligibility, citizens can easily access suitable housing. The Korean government does not directly build housing but partners with semi-public urban development corporations that operate like private enterprises while benefiting from policy support.

These experiences highlight that an effective social housing ecosystem requires close coordination among stakeholders, with each playing a specific role and benefiting from tailored incentive policies.

Comprehensive Solutions for a Social Housing Ecosystem

Government: Creating a Transparent and Efficient Framework

The government acts as the “conductor” of the social housing ecosystem, fostering collaboration to achieve the goal of one million units by 2030. The focus is on shifting from a support-based approach to a development-driven one, with specific solutions aligned with Resolutions 66-NQ/TW, 68-NQ/TW, and legal frameworks such as Decrees 100/2015/NĐ-CP, 49/2021/NĐ-CP, and Circular 07/2024/TT-NHNN:

• Establish a National Social Housing Development Fund: This fund serves as the “financial backbone” with three long-term capital sources:
  • Issue green social housing bonds with preferential interest rates of 3–3.5%, exempt from income tax on bond interest, attracting both domestic and international investors (banks, investment funds, individuals, ESG funds, and green financial institutions). These bonds are tied to energy-efficient social housing projects meeting standards like LOTUS or EDGE, capitalizing on global sustainable investment trends.
  • Reallocate 15% of revenue from commercial real estate taxes and land-use fees in major urban areas to fund the National Social Housing Fund. Businesses participating in social housing projects are granted 100% corporate income tax exemptions for seven years and exemptions from land-use fees for green-certified projects, encouraging investment without creating new financial burdens.
  • Promote public-private partnership (PPP) models combined with Official Development Assistance (ODA) from the World Bank, ADB, and JICA at 0–1% interest rates, focusing on industrial zones and major urban areas. PPP businesses can access loans at 4–5% interest from the Social Housing Fund and are exempt from VAT on green construction materials, reducing budgetary pressure and building trust through the involvement of reputable organizations.

National Social Housing Credit Guarantee Fund: A 100% credit guarantee for social housing loans with interest rates of 3–4% per year for citizens and 4–5% per year for businesses, managed transparently through a national blockchain-based portal that publicly discloses transactions and project progress.

• Legislation of Social Housing Land Funds: Amend the Land Law and Housing Law to mandate 20–25% of land in urban and industrial zones for social housing, with flexible adjustments based on local needs (20–25% in Hanoi and Ho Chi Minh City; 20% or lower in Type IV and V urban areas). Developers are granted 100% corporate income tax exemptions for 7–10 years, increased land use coefficients by 1.5–2 times, and exemptions from land-use fees for social housing. Strict penalties (fines of 5–10% of project value or land reclamation if not implemented within 2 years) are enforced. “Clean” land funds are publicly disclosed on the blockchain portal to ensure transparency.
• Digital One-Stop System: Reduce project approval time from 6–12 months to 4–6 months, minimize informal costs, and ensure transparency and openness.
• National Communication Campaign: Leverage TikTok, YouTube, and consultation sessions at industrial zones to promote success stories like “How I Bought a Social Housing Unit.” Regular project progress updates foster accountability and public trust.

Real Estate Enterprises: Opportunities Amid Challenges

In a saturated commercial housing market with tightened credit, social housing represents a “new frontier” with significant potential, accounting for 60% of market demand (Mordor Intelligence, 2024). To attract active participation from major enterprises, robust and appealing policies are essential. Proposed policies include:

• Increase Profit Margins to 15–20%: Compared to the current 10%, this level is attractive enough to encourage long-term investment from major corporations like Vingroup, Novaland, Nam Long, Ecopark, TTC Group, and Becamex.
• Tax and Land Cost Exemptions: Provide 100% corporate income tax exemptions for 10 years, waive land-use fees, and reduce VAT by 50% for businesses using green materials and advanced technologies (e.g., modular housing, prefabricated components).
• Flexible Mortgage Mechanisms: Allow mortgaging of future assets to secure loans at 4–5% interest rates, guaranteed by the Social Housing Fund, enabling businesses to improve capital turnover.
• Promote Green Technology: Subsidize 50% of certification costs for green building standards (LOTUS, EDGE) and prioritize enterprises using BIM, AI, or eco-friendly materials in bidding processes.

Banks: Driving Sustainable Financial Momentum

Banks serve as the “lifeblood” of the social housing ecosystem, activating a sustainable flow of capital. Proposed mechanisms include:

• Comprehensive Credit Guarantees: The Social Housing Fund guarantees 100% of loans (3–4% per year for buyers, 4–5% per year for developers), reducing credit risks.
• Tax and Fee Incentives: Offer 50–100% corporate income tax exemptions for 7–10 years and waive credit guarantee fees for loans aligned with the program’s objectives.
• Preferential Refinancing: The State Bank provides refinancing quotas at 2–3% interest per year, enabling banks to maintain 1–2% profit margins.
• Electronic Credit System: Process applications within 15–20 days, using blockchain to prevent fraud and ensure transparency.

Construction Industry: A Catalyst for Recovery and Innovation

Social housing presents an opportunity for the construction industry to overcome its “frozen” state, create millions of jobs, and reduce product costs through modern technology. Proposed solutions include:

• Tax and Fee Incentives: Provide 100% VAT and import tax exemptions for 7 years for businesses using advanced technologies (modular housing, prefabricated components, automated construction), reducing construction time by 20–30% and costs by 15–20% (Ministry of Construction, 2024). Businesses can deduct 50% of technology investment costs from corporate income tax.
• Preferential Credit: The Construction Technology Support Fund offers loans at 2–3% per year (5–10 year terms) for projects using modular construction, concrete 3D printing, enabling apartment prices below 20 million VND/m², affordable for those earning 10–15 million VND/month.
• Digital Bidding Platform: A national bidding platform reduces approval times from 6–12 months to 3–6 months, prioritizing contractors using modern technology with 20–30% higher evaluation scores. Projects completed in under 12 months receive a 5% contract value bonus.

Citizens: The Heart of the Ecosystem

The dream of affordable housing for millions of Vietnamese workers, from industrial zone laborers to young urban entrepreneurs, is hindered by real barriers to accessing social housing. These challenges are not just personal obstacles but reflect a broader societal issue in a rapidly transforming nation, where commercial housing prices far exceed affordability and incomes remain limited.

The first and most significant barrier is the difficulty in proving income. The process to verify income eligibility for social housing requires multiple documents and complex steps, including confirmations from trade unions, local authorities, and evaluations by the Department of Construction, often taking 3–6 months. For freelancers, seasonal workers, or those with short-term contracts, proving stable income is nearly an “impossible task.” In industrial zones like Bình Dương or Đồng Nai, thousands of workers have given up midway due to repeated demands for additional income or housing status documents, while working 10–12 hours daily leaves little time to navigate bureaucratic procedures.

The second barrier is the lack of transparent project information. Details about social housing projects, such as location, pricing, construction progress, and registration processes, are often not widely publicized or are hard to access, especially for those less tech-savvy or living far from urban centers. Many workers in industrial zones in Long An or Bắc Ninh are unaware of nearby social housing projects, as information is shared only through word-of-mouth or scattered on unofficial channels. As a result, many miss registration opportunities or fall prey to fraudulent “housing brokers,” trapping them in cycles of debt.

Concerns about the quality and location of social housing also pose significant barriers. Many citizens fear that social housing equates to low quality, lacking basic amenities like schools or hospitals, or is located in remote areas, complicating commutes and daily life. Some social housing projects in the suburbs of Hanoi or Ho Chi Minh City are built in areas with poor transport connectivity, often dozens of kilometers from industrial zones or city centers. Citizens, especially young families, face a tough choice: opt for affordable social housing but sacrifice long commutes or higher living costs, or remain in cramped, unsafe rental accommodations.

Finally, limited financial capacity remains the biggest hurdle. Although social housing prices are lower than commercial housing, the average cost of 20–25 million VND/m² is still beyond the reach of many households earning 10–15 million VND/month. Current preferential loans often involve complex procedures, lengthy approval times, and large upfront payments, discouraging applicants. For instance, a worker family in Ho Chi Minh City earning 12 million VND/month struggles to afford a 200–300 million VND down payment for a 50 m² apartment, even with preferential loans.

Solutions: Putting Citizens at the Core, Turning the Housing Dream into Reality

To overcome these barriers and restore trust, social housing policies must prioritize citizens, focusing on three principles: easy access, easy understanding, and easy purchasing. Proposed solutions include:

• Expand Eligible Beneficiaries: Include those earning under 20 million VND/month (urban) or 14 million VND/month (rural), recent graduates, and workers with labor contracts of at least one year.
• Long-Term Preferential Loans: Offer 25–30-year repayment terms at 3–4% interest per year, capped at 25% of income (3–4 million VND/month for a household earning 15 million VND).
• Simplified Registration: Enable online registration with approvals in 7–14 days, allowing self-declared income verified by trade unions or local authorities within 3 days.
• Diversified Products: Provide mini-apartments (25–35 m²), family units (45–60 m²), and long-term rentals (10–20 years) at 50–60% of market rates, prioritized near workplaces.
• Accessible Communication: Use short videos, minigames, and livestreams to guide registration and share success stories, inspiring public confidence.

Long-Term Vision

The operational model for social housing must rely on close coordination between the state and the market: the government creates the institutional framework, businesses provide the products, banks facilitate credit, contractors execute construction, and citizens act as both beneficiaries and overseers. When the interests of all stakeholders are transparently safeguarded, the social housing ecosystem will thrive sustainably.

If these policies are implemented cohesively from now until 2030, the goal of one million housing units will not only be achievable but will also serve as a foundation for a harmonious society, enhancing the quality of life for millions of people. This is not merely a solution to the housing challenge but a national development strategy, integrating economic, social, and human elements for a prosperous future.

Dr. Nguyễn Kinh Luân (Jerry Nguyen)

About the Author

Dr. Nguyễn Kinh Luân (Jerry Nguyen)

• Education: PhD in Civil Engineering, University of Queensland, Australia; Master’s in Mechanics of Construction, University of Liège, Belgium; Bachelor’s in Business Administration, University of Economics, Ho Chi Minh City; Bachelor’s in Civil Engineering, Ho Chi Minh City University of Technology.
• Professional Certifications: Licensed Builder (Domestic Builder - Unlimited) across Victoria, Australia; Fellow of Engineers Australia; Chartered Professional Engineer & APEC Engineer.
• Experience: Currently serves as Chair of Group Restructuring Board, Member of the Board of Directors, and Deputy General Director of Investment and International Business Development at Hoa Binh Construction Group. Previously held leadership roles in Australia (Sandstone Building Group, Tandem Corporation); served as advisor, executive, and member of the Board of Directors at Thành Thành Công Group (TTC Group) and Searefico Group; coordinated M&A and investment banking transactions at a subsidiary of the Ho Chi Minh City Finance & Investment State-own Company (HFIC); managed investments in real estate development projects in the South Ho Chi Minh City Urban Area as Head of Planning and Investment Department at The Management Board of the South Ho Chi Minh City Urban Area (MASD).

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