Vietnam Social Housing Prices Outpace Worker Incomes

Vietnamese legislators are raising serious concerns about the affordability of social housing, highlighting a significant gap between housing prices and the income of average workers. Phan Thị Thúy Linh, Chairwoman of the Da Nang Labor Federation, pointed out that a 50-square-meter social housing unit, which opened for sale earlier this year, costs over 1 billion VND (approximately $40,000 USD). This price tag is equivalent to about 10 years of income for a worker earning the national average of 9 million VND per month.

Linh further noted that monthly rental costs for such units are around 5 million VND. She argued that current pricing formulas, which are based on investment costs, do not adequately consider the financial capacity of citizens. This contrasts with Resolution 21, which emphasizes developing rental housing at prices suitable for people's ability to pay, not just based on costs. The current situation makes it exceedingly difficult for many laborers to secure adequate housing.

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But a social housing unit of about 50 m2 opened for sale earlier this year has exceeded 1 billion VND, equivalent to about 10 years of income for a worker. The rent per month is about 5 million VND. If calculated by the current formula, it is very difficult for workers to afford it.

Voicing similar concerns, Võ Thị Ngọc Trúc, President of the Ho Chi Minh City Women's Union, stressed that social housing policies should ensure fairness, enabling workers to buy, rent, or rent-to-own suitable accommodation. She questioned the draft law's criteria for identifying low-income individuals and housing located far from workplaces. Trúc warned that loopholes in the draft law, particularly regarding the verification of income and the flexibility for developers to pay instead of building social housing, could lead to policy abuse and further disadvantage workers.

Trúc specifically addressed the provision allowing developers to fulfill social housing obligations by allocating land within commercial projects, finding alternative locations, or paying equivalent fees. While acknowledging the need for flexibility, she cautioned that the payment option could be favored by developers due to its convenience, potentially leading to social housing being built far from essential services and workplaces. This would impose additional travel costs and reduce family time for workers, making even a "low-cost" unit prohibitively expensive in real life. She urged for legal provisions that prioritize locating social housing within or near commercial projects.

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The draft law stipulates penalties for violations but lacks a mechanism for inspection and screening from the very beginning of the review process. This gap could create loopholes for policy abuse.