Vietnam’s Urban Land Banks: Game-Changer for Development or Barrier to Housing Access?

Vietnam’s urban land banks are reshaping cities and redefining how land is planned, managed, and developed. But at what cost? And to whom?

Hanoi, Vietnam — As Vietnam accelerates toward its vision of becoming a high-income country by 2045, its cities are expanding rapidly. Skylines in Hanoi and Ho Chi Minh City are climbing higher, and new urban corridors are emerging across the country. But with growth has come a challenge: how to manage urban land in a way that is equitable, efficient, and sustainable. One of the country’s most ambitious responses has been the introduction and expansion of urban land banks.

As Vietnam’s cities transform under the weight of rapid development, land banking has emerged as a key tool in reshaping urban growth. In Hanoi and beyond, authorities are using this strategy to manage expansion, attract investment, and plan for the future — raising critical questions about equity, participation, and the right to the city. (Photo: Vinh Dao)

Land banking is not new globally, but its application in Vietnam is gaining attention for its scale and speed. The mechanism allows public authorities to acquire, hold, and manage land for strategic use — from affordable housing and infrastructure to private investment.

In theory, it helps prevent land speculation, guides orderly development, and ensures that land is available for public needs. In practice, however, its implementation is generating controversy, especially among informal settlers and low-income communities.

Planning Power or Displacement Tool?

The Ministry of Natural Resources and Environment, in coordination with provincial governments, has positioned land banks as essential tools for controlling chaotic urban sprawl. By consolidating parcels of land before development pressures hit, the state hopes to direct growth in a way that is socially and economically beneficial.

Yet critics argue that land banks can also serve as instruments of exclusion. In several cases, informal settlements have been cleared to make way for projects deemed “strategic,” without adequate consultation or compensation. Communities living on the urban periphery — many of whom lack formal land titles — have found themselves displaced with little notice or legal recourse.

“We were told it was for public good,” says Nguyen Thi Mai, a resident of an informal neighborhood in Binh Duong Province. “But there were no schools or clinics in the plan. Only high-rise buildings we can't afford.”

The disconnect between land use planning and housing affordability is not unique to Vietnam, but the pace of change is amplifying its effects. As land values rise, so do fears that the state’s new land strategy may deepen inequalities instead of addressing them.

A Magnet for Investment — But for Whom?

International investors have responded positively to Vietnam’s land banking framework, particularly those seeking ESG-aligned real estate opportunities. With clear legal pathways and large-scale development zones, the country has positioned itself as a regional leader in urban transformation. The model has attracted interest from South Korean, Japanese, and European developers eager to partner on new commercial hubs and housing complexes.

But critics warn that such partnerships often prioritize returns over rights. “What we’re seeing is an increasing commodification of urban land,” says Le Quang Binh, an urban policy analyst based in Hanoi. “Without safeguards, land banks could become pipelines for private profit rather than public benefit.”

Indeed, civil society groups are calling for stronger regulations to ensure that land banking aligns with inclusive development goals. Recommendations include mandating a percentage of land bank parcels for social housing, requiring participatory planning processes, and strengthening legal protections for those without formal tenure.

Toward a More Inclusive Urban Future

There are signs that government officials are listening. A recent policy draft by the Ministry of Construction proposes expanding the scope of land banks to explicitly support low-income housing and climate-resilient infrastructure. Pilot programs in Da Nang and Can Tho are also experimenting with community participation models, where residents help identify priority uses for banked land.

Still, much depends on implementation. Legal reforms, institutional capacity, and political will remain uneven across provinces. Transparency in land valuation, displacement processes, and benefit-sharing mechanisms will be key to determining whether land banking in Vietnam becomes a tool for empowerment or further marginalization.

For now, the land banks stand as both symbol and site of Vietnam’s urban future — promising order, investment, and growth, but also raising deep questions about whose city is being built, and who will have the right to stay.