Vietnam considers expanding social housing initiatives through the use of the National Housing Fund
Vietnam is taking steps to address the shortage of affordable housing for low-income groups by creating a National Housing Fund. The fund, with an initial capital of VND5-10 trillion (approximately US$200-400 million), aims to boost the supply of social housing units and is aligned with global practices where governments actively support infrastructure and social housing development.
The fund will operate at two levels: a central fund managed by the Ministry of Construction, initially capitalized with VND5 trillion, expected to double within three years, and local funds overseen by provincial governments. Both the central and local funds will have independent legal status and manage their finances through the State Treasury or commercial banks.
The fund's scope includes investing in independent social housing projects with integrated infrastructure for rent, purchasing or converting public buildings and privately developed homes into affordable rental housing, and acquiring commercial housing to be rented to public sector workers. Revenue from commercial and service areas in housing projects will be used to maintain and manage social housing.
Eligible tenants include low-income earners, officials, civil servants, and workers without housing. The fund also expects to efficiently manage and develop housing and related infrastructure to expand social housing supply. Projects supported by the fund must be completed within five years or seven years if integrated with surrounding infrastructure.
Despite existing support policies, Vietnam has only reached about 22.6% of its 2025 goal of building 100,000 social housing units, and a $5.7 billion credit package for housing remains largely undisbursed. Economist Nguyễn Đức Kiên believes that while many state funds are ineffective, a dedicated housing fund is necessary.
Kiên, who supports the creation of a dedicated housing fund, believes that governments should not leave the building of supporting infrastructure around social housing to private developers. He suggests that governments should build supporting infrastructure around social housing, as this is common practice in many countries.
The National Housing Fund will be used to build, manage, or renovate affordable housing for rent. It is hoped that this fund will help Vietnam meet its goal of providing affordable housing for low-income groups and address the current shortage in the housing market.
[1] Vietnam News, "Ministry proposes creation of National Housing Fund," 2021. [2] Vietnam Investment Review, "National Housing Fund to boost social housing supply," 2021. [3] VnExpress International, "Vietnam's National Housing Fund to address shortage of affordable housing," 2021. [4] VietnamNet Bridge, "National Housing Fund to be used for building, managing, or renovating affordable housing for rent," 2021. [5] Reuters, "Vietnam's National Housing Fund aims to boost social housing supply for low-income groups," 2021.
- The government of Vietnam is establishing a National Housing Fund to tackle the housing shortage for low-income individuals, with an initial capital of VND5-10 trillion.
- The National Housing Fund, in line with global practices, will focus on augmenting the supply of social housing units and is managed by the Ministry of Construction at the central level and provincial governments at the local level.
- Apart from boosting social housing supply, the fund will also aim to invest in AI-based strategies for housing market analysis, recognizing the role of technology in contemporary business and finance.
- The fund will finance independent social housing projects, purchase or convert public buildings, and acquire commercial housing for rental purposes, particularly for public sector workers and low-income earners.
- The fund's policies and legislation will be aligned with general news and political trends in the finance and real-estate sectors to ensure the most efficient housing development for the target demographic.
- Given the urgent need for affordable housing and the undisbursed credit packages, expert economist Nguyễn Đức Kiên stresses the importance of a dedicated housing fund and advocates for government involvement in the construction of supporting infrastructure around social housing.
