This recommendation was made by Dao Harrison, a senior housing expert at the World Bank (WB), at the international workshop "Inclusive Housing - Experiences and Practices in Vietnam and Internationally", held in Da Nang on 24/6.
Harrison noted that despite Vietnam's impressive economic growth, rising land and construction costs are pushing housing prices beyond the affordability of workers. Meanwhile, the market supply primarily targets the mid-range and high-end segments.
She suggested expanding the concept of "affordable housing" to include the private rental sector. Instead of only focusing on new construction, the government could provide financial support to landlords to upgrade existing accommodations. This solution would utilize central land, allowing workers to live closer to their workplaces rather than relocating to suburban areas.
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Dao Harrison contributes her opinion at the workshop. Photo: Nguyen Dong
According to Harrison, Vietnam could implement a management platform similar to Indonesia's Mamikos model to connect landlords with banks, providing capital for property renovations. All monthly rent transactions made through the application would generate alternative data, helping informal workers build a credit history.
Le Van Tuan, Deputy Director of Da Nang Department of Construction, praised the proposal for state financial support to upgrade private rental housing as "practically valuable and groundbreaking". He believes this approach can leverage existing land, saving the state time and costs associated with land clearance to prepare clean land for investors.
From a local perspective, Tuan stated that Da Nang's preferential credit capital for social housing developers and buyers currently does not meet actual demand. The increasing costs of construction investment, land clearance, and infrastructure development also pose challenges for the locality.
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Many social housing apartment buildings in Son Tra ward, Da Nang city. Photo: Nguyen Dong
Between 2021 and 2025, Da Nang completed 6,352 social housing units. The locality has reviewed 113 land plots, totaling about 390 ha, to build 36 social and rental housing projects by 2030. These projects, once completed, are expected to provide approximately 31,029 apartments to the market.
Rental housing is a segment prioritized by the government for development until 2030. On 22/6, the Prime Minister directed localities to proactively clear land and prepare clean land funds for rental housing development.
In addition to preparing clean land, the government requires ministries and sectors to research and develop appropriate land, credit, financial, and tax policies to rapidly expand the affordable rental housing market, while also encouraging private sector investment. The Ministry of Construction is currently studying land and financial incentive mechanisms to develop this type of housing.
Le Van Tuan, Deputy Director of Da Nang Department of Construction, recommended that the central government maintain stable, long-term preferential credit programs for both developers and home buyers, and promptly finalize the operational mechanisms for the national housing fund and local housing funds.
He also proposed that international organizations provide preferential capital support for social housing development programs and vulnerable groups in the locality.
From the WB's side, Dao Harrison suggested that besides preferential support resources, Vietnam could also establish a national mortgage refinancing agency or credit guarantee funds to share risks, helping banks unlock 15-20 year capital flows for the affordable housing segment.
Nguyen Dong
