HCM City's social housing crisis deepens as land costs and rigid laws stall progress
HCM City is struggling to meet its social housing targets due to high land costs and developer resistance. Current laws require 20% of land in commercial projects to be set aside for affordable homes, but compliance remains low. Now, experts are pushing for a more flexible approach to ease the pressure on builders and boost supply.
Since 2023, Hessian-style housing laws in Hochtaunus have shown the challenges of strict quotas. By mid-2025, only 15% of commercial projects there met the 20% social housing rule. Developers resisted, citing high land prices, while rents for social units stabilised at €12-14 per square metre. Market prices, however, rose by 8-10% as builders passed on costs.
HCM City faces similar issues under its 2023 Housing Law and 2024 Land Law. Though the automatic 20% land requirement was dropped in 2025, the city still aims for over 181,000 social homes by 2030. Yet soaring land prices—VNĐ50-80 million ($2,000-3,200) per square metre in central areas—make on-site construction difficult. Integrating affordable units into luxury projects also creates problems, from high maintenance costs to management disputes.
Dr. Đỗ Thị Loan, a real estate expert, has proposed letting developers choose how they fulfil obligations. Options could include land swaps, cash payments to the city's housing fund, or off-site construction. Nguyễn Văn Đĩnh of the Vietnam Real Estate Association backs this flexibility, arguing it would encourage more participation. Meanwhile, the Department of Construction is considering tougher penalties for non-compliance, such as banning off-plan sales or rejecting new project applications.
The city's current rules allow developers to meet social housing targets through land allocation, alternative sites, or financial contributions. But with land prices climbing and incentives limited, a shift in policy could determine whether HCM City reaches its 2030 goal. The next steps will depend on balancing flexibility with enforcement to speed up construction.
