Insights | Affordable Housing: Is One Year Enough for a Pilot?

Author: Tuan Pham

(Ngo & Partners is pleased to share the article "Affordable Housing: Is One Year Enough for a Pilot?" by Tuan Pham, LL.M., Of Counsel at Ngo & Partners, originally published in Dan Tri News, 12 March 2026.)

A few days ago, in its Focus column, Dan Tri ran a piece titled "A salary of over VND 20 million a month — and still adrift on housing", about a family whose combined income of VND 42 million a month is considered merely "enough" for a basic urban life, with nothing left to save. That income level does not qualify for social housing support, yet remains far out of reach of commercial housing.

The situation is common in major cities, especially among the young. Many families come to realize that buying an apartment can take decades of saving. The dream of owning a home becomes a long journey: work, save, calculate — then look at the price list again, and start calculating from scratch.

A housing opportunity for middle-income earners

Against that backdrop, when the Ministry of Construction released a draft Government Resolution in early March on piloting the development of affordable commercial housing, it immediately drew attention. The public greeted the idea with considerable expectation.

The urban housing market has long operated around two familiar segments: commercial housing and social housing. Commercial housing develops under market mechanisms, targeting buyers with above-average incomes; social housing serves policy beneficiaries and low-income earners, with a range of preferential mechanisms.

Between those two segments sits a rather large group: middle-income earners. They do not qualify for social housing policy, yet struggle to access commercial housing at today's elevated prices. It is precisely this gap that gave rise to the idea of affordable commercial housing.

Under the draft Resolution, the policy is designed with a series of incentives to encourage developers to enter the new segment. Investors may be selected without project bidding or auction; investment procedures are simplified to shorten implementation time; and developers may access loans at lower interest rates and longer terms than usual.

For buyers, the draft sets out a fairly clear principle: each eligible person may purchase one affordable commercial housing unit and may not transfer it within five years from full payment. The rule aims to curb buy-to-flip speculation and to ensure homes reach those with genuine housing needs.

Looked at closely, the model has an interesting feature. It is not quite social housing, but neither is it commercial housing in the usual sense. Developers must still pay land use levies, for instance, but at a lower rate than ordinary commercial projects — whereas social housing is exempt from them altogether. On profit, the project's capped margin is set at around 15%, higher than the 10% applied to social housing. In other words, this is a "hybrid" model: part market mechanism, part policy support.

If implemented effectively, the segment could deliver two benefits at once: people gain more opportunities to access housing at more reasonable prices, while the real estate market gains supply in a segment currently in shortage — helping rebalance a product mix that has tilted heavily towards the mid-high and high-end segments.

The draft Resolution charts a path towards filling the housing-access "gap" for middle-income earners — the group described at the start of this article, caught between two options that are both hard to reach: not eligible for social housing, yet priced out of commercial housing.

The concerns

Alongside the expectations, however, the draft policy raises a few concerns. The criteria for determining who may buy affordable commercial housing — such as income thresholds or current housing status — have yet to be specified. Likewise, the mechanism for creating land funds for these projects has not been made concrete. If localities are not required to allocate land — particularly cleared, "clean" land — and developers must secure sites themselves, more than a few investors may hesitate. Still bound by certain constraints under the scheme, they may well prefer to develop ordinary commercial housing, a path that is familiar and carries fewer strings.

But that is not the only question this policy raises.

One notable point in the draft is the pilot period. Under Clause 1, Article 10 of the Draft, the mechanism would apply until 28 February 2027 — roughly one year from issuance. That milestone is in fact tied to the framework within which the National Assembly has allowed the Government to trial certain new policies in the period ahead. The pilot window for this mechanism therefore sits, in part, within that "common frame".

At first glance, the approach seems reasonable: pilot the policy, see how it performs, then adjust. But in real estate, time is never that simple.

An ordinary housing project passes through three stages: investment preparation, construction, and sale and handover. The investment preparation stage alone — placing the project in the locality's housing development programme, fitting it into planning, preparing the land fund and completing procedures — can take two to three years. If the pilot lasts only about a year, it is quite possible that when the policy expires, many projects will still exist only on paper. Any review would then rest mainly on plans and project files, rather than actual results on the ground.

Yet the meaning of a housing policy lies not in the number of proposals or approved projects, but in the homes actually built and brought to market. Only when real products exist do people gain real choices, developers gain a basis to assess investment performance, and regulators gain the data needed to refine the policy. If no project manages to deliver a product in time, evaluating the pilot's effectiveness will hardly reflect the policy's true impact.

The experience with social housing tells a similar story. The model has existed in law since the 2005 Law on Housing, but it took nearly two decades — as the policy framework gradually matured — for social housing to begin developing strongly. It shows that a housing policy, if it is to work, usually needs enough time for the market to adapt.

One alternative, therefore, is worth considering: a longer pilot mechanism — around five years, for instance — issued by the National Assembly in a dedicated Resolution. This would mirror the approach recently taken with social housing, when the National Assembly issued Resolution No. 201/2025/QH15.

A longer horizon would let localities proactively prepare planning and land funds, while giving developers enough time to structure projects, invest, and bring products to market.

Diversifying housing supply is essential for fast-growing cities. But what matters is not merely creating a new housing category — it is designing a policy stable enough, and long enough, to genuinely take root in real life.

In the end, housing is not a story about the young alone. And sometimes, a good policy needs to do just one thing: shorten the road to a first home.