Prime Minister Le Minh Hung chaired a meeting on May 25 with the Hanoi People’s Committee and ministries on the development of rental housing in the capital.

The meeting aimed to urgently implement conclusions issued by General Secretary and President To Lam during a recent working session on the implementation of Directive No. 34 of the Secretariat concerning social housing and housing development orientations.

Concluding the meeting, Prime Minister Le Minh Hung stressed that developing affordable commercial housing and rental housing is a major policy of the Party and the State.

He said To Lam’s direction prioritizing rental housing development, especially rental apartment models, represents a strategic orientation that could fundamentally reshape thinking about Vietnam’s housing market in the coming period.

The Prime Minister acknowledged that these issues cannot be solved overnight but emphasized the need for immediate and decisive action without delay.

He called for a frank assessment of existing bottlenecks, particularly the severe imbalance between supply and demand in the housing market, where development has heavily favored commercial housing and homes for sale while long-term affordable rental housing remains extremely limited.

He also pointed to inefficient use of public housing assets that has resulted in waste, along with policy mechanisms that are not attractive enough to encourage private sector investment in long-term rental housing.

The Prime Minister highlighted several major policy directions for ministries, sectors and Hanoi authorities to align in both awareness and action.

First, Vietnam must fundamentally shift its housing mindset from mainly developing commercial housing to simultaneously developing both commercial and rental housing, with rental housing identified as a strategic long-term segment serving large sections of the population.

“If we successfully develop the rental housing segment, it will have spillover effects on other segments and significantly reduce demand for home ownership,” the Prime Minister said.

Second, while the State will not subsidize housing, it also cannot leave the market entirely to self-regulate.

Third, rental housing development must be integrated into overall urban planning, land-use planning, industrial zone planning, public transportation systems, labor markets and population management.

Fourth, mobilizing diverse financial resources is essential, and the government cannot rely solely on the state budget.

Fifth, authorities must firmly and persistently address the issue of abandoned or inefficiently used public housing assets while strengthening anti-waste measures tied to the responsibility of agency heads.

Mechanism proposed for firms and cooperatives to buy homes for rental purposes

The Prime Minister instructed Hanoi to take the lead and act urgently by reviewing all land-use plans, urban and rural planning schemes, and public housing assets currently used inefficiently in order to develop rental housing models. Hanoi must report results to the Prime Minister within June.

He added that if Hanoi’s pilot mechanisms prove effective, they could later be expanded nationwide.

Hanoi was also tasked with proactively reviewing housing demand, target groups and investment mechanisms to develop large-scale rental housing projects that meet the needs of people living and working in the capital, including officials, civil servants and public employees from central agencies. The city is expected to begin construction on several projects in June.

For the Ministry of Construction, the Prime Minister requested proactive proposals on new policies and comprehensive mechanisms to support localities in developing rental housing.

He specifically called for careful study of a four-category housing development orientation consisting of commercial housing, rental housing, official residences and policy housing.

The Prime Minister also suggested several concrete measures, including studying rental policies lasting 15-20 years or longer and requiring commercial housing projects to reserve a certain proportion for rental housing construction.

The Ministry of Construction was tasked with coordinating with local authorities, particularly Hanoi, Ho Chi Minh City, Dong Nai, Hai Phong and Da Nang, to identify rental housing demand by segment as a basis for planning and resource allocation while avoiding supply-demand mismatches.

The ministry will also work with other agencies to study and propose specific nationwide targets for rental housing development.

In coordination with the Ministry of Finance and relevant agencies, the Ministry of Construction will review and propose mechanisms allowing enterprises and cooperatives to purchase commercial housing and social housing solely for rental purposes.

The State Bank of Vietnam was assigned to study and propose preferential credit policies for investors in long-term rental housing projects, including stable interest rates and loan terms aligned with project capital recovery cycles, with a report due to the Prime Minister in July.

If necessary, the central bank may also consider refinancing mechanisms for commercial banks or more flexible credit growth limits to support the sector.

Major urban localities were encouraged to study Hanoi’s experience and replicate successful rental housing models in their own areas.

Tran Thuong