Housing development policies toward sustainability in Japan and Vietnam
Introduction
Sustainable housing development is a global priority, essential for addressing environmental challenges and promoting social and economic stability. This paper examines the housing development processes and policies in Japan and Vietnam, two countries that have made significant strides in achieving sustainable housing markets. Japan, a developed economy, and Vietnam, a developing economy, offer valuable insights into how different stages of economic development influence housing policies. By analyzing their experiences, this study aims to provide lessons for other countries striving to achieve sustainable housing solutions.
Housing Market in Japan
Progress from Housing Shortage to Stability
Japan faced a severe housing shortage after World War II, with approximately 4.2 million units destroyed. The government responded with aggressive housing development programs, leading to a stable housing market by the 1970s. This progress can be divided into three periods: recovery (1945–1973), transformation (1973–2007), and stability (2008–present). During the recovery period, Japan experienced rapid economic growth and urbanization, which increased housing demand. By 1968, the housing supply had met demand, and by 1973, it exceeded it. However, economic crises, such as the 1973 oil crisis and the 1990s financial crisis, temporarily slowed housing development. Despite these challenges, Japan achieved a high homeownership rate of 62.4% by 1983.
Key Housing Policies
Japan’s housing market stability was supported by several key policies. The Government Housing Loan Corporation (GHLC), established in 1950, provided long-term, fixed-rate mortgages to low- and middle-income households. The Public Housing Act (PHA) of 1951 authorized the construction of public housing for low-income families, while the Japan Housing Corporation (JHC) focused on building rental apartments and new towns. In the 2000s, the government restructured the GHLC into the Japan Housing Finance Agency (JHFA), which encouraged private financial institutions to offer housing loans. Tax policies, such as income tax reductions for homebuyers and higher taxes on vacant land, also played a crucial role in promoting homeownership and preventing land speculation.
Challenges: Housing Vacancy Crisis
Despite its success, Japan faces a housing vacancy crisis, with the vacancy rate reaching 13.6% in 2018. This issue is attributed to oversupply, demographic changes, and a lack of focus on used house transactions. The aging population and declining birthrate have reduced housing demand, while policies favoring new construction over renovation have led to the abandonment of older homes. In 2023, the Japanese government introduced measures to address this issue, emphasizing the responsibility of property owners and promoting the renovation of vacant houses.
Housing Market in Vietnam
Improvement in Housing Supply
Since the economic reforms of 1986, known as Doi Moi, Vietnam has experienced rapid economic growth and urbanization. The urban population increased from 19.51% in 1990 to 36.83% in 2020, driving demand for housing. The government implemented several policies, including the Housing Law of 2005 and the National Housing Development Strategy, to encourage private and foreign investment in the real estate sector. As a result, the housing supply increased significantly, with major cities like Hanoi and Ho Chi Minh City adding millions of square meters of floor space. Homelessness rates also declined, and the quality of housing improved, with permanent and semi-permanent houses increasing from 63.2% in 1999 to 93.1% in 2019.
Challenges: Affordability and Rental Housing Shortage
Despite these achievements, Vietnam faces challenges in housing affordability and rental housing supply. The housing market primarily caters to middle- and high-income households, leaving low-income families with limited access to affordable homes. Government subsidies, such as the 30 trillion VND package, have been insufficient to address this issue. Additionally, the demand for rental housing has outpaced supply, particularly among young, low-income rural migrants. The labor force in the manufacturing sector grew by 33% from 2015 to 2020, but rental housing supply met only 10% of the demand. Furthermore, low land taxes have encouraged speculation, leading to unconstructed land and rising housing prices.
Conclusion
Japan and Vietnam offer valuable lessons in housing development, demonstrating the importance of economic reform, private sector involvement, and targeted policies. Japan’s success in achieving a stable housing market highlights the role of long-term mortgages, public housing, and tax incentives. However, the country now faces a housing vacancy crisis, underscoring the need for policies that address demographic changes and promote the renovation of older homes. In Vietnam, rapid urbanization and economic growth have improved housing supply, but challenges remain in affordability and rental housing. Addressing these issues will require increased government support for low-income households and measures to curb land speculation. By learning from these experiences, other countries can develop sustainable housing policies that balance supply, affordability, and environmental sustainability.
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Housing development policies toward sustainability in Japan and …