Collaborating to Find Solutions for Vietnam’s Social Housing Shortage

Background

Vietnam is undergoing a transition from a rural, agricultural society to an urban, industrialized one. We’ve already seen transitions like this in East Asia – first in Japan, then in South Korea and Taiwan, and most recently in China.

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Dr. Michael Webb, and Vietnamese scholars touring privately-owned apartments that are leased to factory workers. The owner (in the red vest) was displaced from her farm when the industrial zone was built. She and her husband built the apartments to rent to the factory workers.

Vietnam’s economic and social transformation since the U.S. normalized relations between 1995 and 2000 has been significant. Since 2000, the county’s GDP has increased 481%, from $34 billion to $195 billion. Per capita income has increased from $400 per year to $1,990, nearly quintupling, in the same period. The percent of Vietnam’s residents living in cities – a fairly good indicator of industrialization – has risen from 24% in 2000 to 34% today.* This urbanization figure is still below other counties in East Asia, though – China’s population is 56% urban and South Korea’s is 61% urban.

As Vietnam industrializes and urbanizes, the country is struggling to provide housing to people migrating to its industrial zones from rural parts of the country. While Vietnam has succeeded in attracting foreign-owned factories, its government has not provided sufficient housing for the workers. In fact, a recent study found that, of the 2.8 million workers in Vietnam’s industrial zones, 1.7 million are in need of housing.

The conference

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Dr. Mai Nguyen

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Dr. Michael Webb

To begin addressing Vietnam’s social housing issues, the National University of Civil Engineering (NUCE) hosted a conference on social housing, titled “The Overall Picture of Social Housing – Challenges and Opportunities,” in December, 2016. Presenters included academics from NUCE, representatives from the Vietnam National Real Estate Association, and the Vietnam National Construction Association. In addition, Dr. Mai Nguyen – who is a professor in UNC’s Department of City and Regional Planning and a CURS Faculty Fellow – and I presented on our research in public housing in the U.S.

What emerged from the conference is the need for collaboration between researchers in the U.S. and Vietnam to solve housing issues for low-income families. As mentioned earlier, affordable housing is in short supply near the industrial zones.

Social housing in Vietnam today

Toward the end of the trip, Mai and I had the opportunity to do a site visit to the Thanh Long industrial zone outside Hanoi. Working with researchers from NUCE, we wanted to see how workers in the industrial zone actually lived – both in government-owned buildings and in private apartments. Broadly, housing for workers in the industrial zones includes:

  • Social housing built by the government, where rents are subsidized so that they’re affordable to workers in the factories. There are acute shortages of this type of housing.
  • Social housing built by the government but owned or lease by companies. Some companies in the industrialized zones have purchased or lease government-built housing that they rent out to their workers. The companies may provide services to the workers as well, like daycare.
  • Privately-owned housing. If workers can’t find social housing, they don’t like the social housing, or their company doesn’t provide housing, they must rent from private landlords in villages outside the industrialized zone. Some of them have very long commutes to their jobs. This is, by far, the most common type of housing for industrial zone workers.
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Social housing outside Hanoi

There are two types of social housing at Thanh Long: dorm-style units (with some floors reserved for men and others reserved for women) and high-rises with traditional apartments. The dorms are more targeted to single men and women, while the apartments are mainly for families (and are much more expensive).

In addition, Canon – the Japanese camera-maker that is also a major employer in the industrial zone – has rented out some of the social housing. The housing is very inexpensive, and Canon provides a daycare facility, kindergarten, and evening Japanese and English language classes.

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Many companies that lease social housing to their workers also offer services like daycare and English or Japanese language courses.

There are two villages near the industrial zone, and many of the workers live in private apartments there. We spoke with a landlord who was displaced from her farm when the Vietnamese government cleared land for the industrial zone. She and her husband purchased a storefront in the village and currently operate it as a small shop.

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Dorm-style social housing offers residents community kitchens, pictured above.

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Dorm-style social housing.

Behind the store, they built around 12 apartments, each about 15 feet square. The tenants share a common bathroom and kitchen; individual apartments don’t have a faucet and each has a single electrical outlet. Other apartments in the village are similar:  between 15-20 feet square, a few electrical outlets, and possibly running water. Most households are either a single person or a couple; if they had kids, most had sent them to their home village to live with extended family.

Future efforts

There are many similarities between social housing in Vietnam and public housing in the U.S.  Both counties face acute shortages: only 40% of workers in Vietnam’s industrial zones have social housing, while in the U.S., public housing only serves about 25% of those in need. In response, low-income residents in both countries must rely on the private market for housing.

In 2017 and beyond, researchers at NUCE and UNC will collaborate to better understand Vietnam’s social housing issues and develop policy solutions. Our partners in Vietnam are currently testing a survey of workers in the industrial zones outside Hanoi to understand their current housing situation, and how it can be improved. We’ll use the results of the survey to craft policy recommendations for the Vietnamese government to identify ways to finance and build social housing.

* In case you’re interested in comparisons: Vietnam’s total GDP is roughly the same as Greece’s or Kentucky’s; its per capita income ranks between Uzbekistan and Nicaragua, and its urbanization rate is roughly the same as India’s.

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