This report was produced with advisory from the World Bank for the Government of Vietnam (GOV), in collaboration with the Ministry of Construction (MOC), in particular, the Bureau of Housing and Real Estate Markets and the Ministry’s Inter-Departmental Working Group on Affordable Housing. Financial support was provided from the Government of Switzerland’s Federal Department of Economic Affairs, Education and Research via the Multi-Donor Trust Fund for Sustainable Urban Development and the Australian Department of Foreign Affairs and Trade via the Australia – East Asia and Pacific Region Infrastructure for Growth Trust Fund. Affordable housing will be instrumental to helping Vietnam achieve its goals for increasing productivity and inclusive urban growth.

Since Doi Moi, the country has experienced impressive economic growth, averaged at 7.4 percent per annum from 1990 to 2008, lowering to an average of 6 percent per annum from 2007 to 2013. Strong economic growth has supported a substantial reduction in poverty, from 58 percent in 1993 to 17 percent in 20121. Yet, the country has remained largely rural, with more than half of its population working in the agricultural sector, which only contributed 17 percent of GDP in 20142. In some countries, urbanization has been used as a tool to accelerate economic growth and poverty reduction. As Vietnam aims to maintain a high growth rate, supporting urbanization, where cities contribute a growing share of jobs and GDP, will be an important measure. This structural shift will drive population growth and new demand for housing in cities, for which quality and affordable housing options in well-serviced and connected settlements will be needed. Current supply has been dominated by self-built solutions. Approximately 75 to 80 percent of units are produced by small-scale developers, micro-builders and households themselves. However, low and middle income households still face many difficulties in obtaining the necessary resources for a formal and decent self-built unit.