Despite collecting substantial funds from the 20% land allocation, Hanoi has yet to invest in building social housing across 10 projects where land had already been designated. The Government Inspectorate of Vietnam has also pointed to multiple violations in the management of land reserved for this purpose.

A series of violations in the 20% land fund for social housing

In its newly released inspection conclusion on land management, urban planning and construction licensing in Hanoi, the inspectorate noted that the capital is home to a large population of low-income workers, making demand for social housing particularly high. However, planning, management and use of the 20% land fund intended for this segment remain deeply flawed.

According to the findings, numerous shortcomings and legal violations were identified. Between 2011 and 2022, eight urban and housing projects with a scale of 10 hectares or more were approved without allocating the required 20% land fund for social housing.

Four other projects were permitted by the Prime Minister to substitute this requirement with financial contributions equivalent to the land value, on the condition that land for social housing would be arranged elsewhere. Yet, by the time of inspection, the city had failed to fulfill this obligation.

Meanwhile, three projects of similar scale allocated insufficient land for social housing, falling short of regulatory requirements.

Notably, at the Xuan Phuong Ecological Housing Project, the city designated 6,890 square meters across plots BT6 and BT11 - originally intended for ecological villas - for social housing development. The inspectorate deemed this plan impractical and misaligned with the needs of low-income residents.

Another case involves a commercial housing project for incumbent deputy minister-level officials and equivalents working at National Assembly agencies. Initially approved in line with the detailed 1/500 planning of the Xuan Phuong New Urban Area, the project was later reclassified in 2014 as part of the 20% land fund for social housing. The inspectorate concluded that this adjustment contradicted the project’s original objectives and approved planning.

The report also highlighted that from 2011 until August 13, 2019, Hanoi did not separately track or manage revenues equivalent to the 20% land fund. There was no clear guidance or enforcement for investors to fulfill financial obligations, and these revenues were not accounted for independently but instead merged into general land-use fee collections.

Only on August 13, 2019, did the city issue a formal document regulating the collection, management and use of these funds. Even so, it has yet to allocate capital from these revenues to invest in social housing.

The inspectorate concluded that Hanoi has not used the state budget to develop social housing in 10 projects where land had already been allocated, despite collecting significant sums equivalent to the 20% land value. This has led to wasted land resources and delays in social housing development across the city.

Recommendations for corrective action

Based on these findings, the inspectorate has recommended that the Prime Minister direct Hanoi authorities to fully allocate land for social housing within 2026 across the eight projects that failed to set aside land, the four projects allowed to substitute with financial payments, and the three projects that allocated insufficient land.

The city is also required to urge investors in commercial housing and urban projects to promptly develop social housing on the designated 20% land in accordance with approved timelines.

“In cases where investors fail to comply, authorities must take action in line with regulations, either by selecting alternative investors or by developing social housing using state budget funds sourced from the collected equivalent land value,” the inspection conclusion stated.

For the Xuan Phuong Ecological Housing Project, Hanoi is required to review and ensure sufficient allocation of the 20% land fund for social housing if land remains available.

As for the commercial housing project for deputy minister-level officials, authorities must reassess and adjust it in line with its original objectives and approved planning.

Additionally, the Ministry of Construction has been tasked with directing relevant agencies to inspect and supervise Hanoi’s implementation of planning, management and use of the 20% land fund, while also reviewing related mechanisms and policies.

Hong Khanh