As Viet Nam's first metro lines take off and a series of policies supporting Transit-Oriented Development (TOD) take effect, the country has a unique opportunity to deliver more affordable housing in locations that provide convenient access to jobs, services and public transport. 

Table of Contents 1. New Opportunities for Housing Around TOD Projects 2. 3 Solutions for Integrating Affordable Housing into TOD Communities 2.1 Urban Planning 2.2 Financial Mechanisms 2.3 Land Management 3. Looking Ahead: Is TOD a Sustainable Solution?

1. New Opportunities for Housing Around TOD Projects     

Alongside expectations for economic growth and increasing property values surrounding planned metro stations, an important question remains: Will TOD address the shortage of social and affordable housing in major cities, particularly as homeownership becomes increasingly out of reach for many residents?

Giang Do, National Director of Valuation and Consultancy at Savills Vietnam, believes the true objective of TOD is to help more people access housing, employment and essential amenities within a sustainable urban environment. The success of TOD, she says, should be measured by these outcomes rather than by increasing land values around metro stations.  

This perspective is especially relevant as access to affordable housing and social housing in major cities has become increasingly challenging. According to Savills Vietnam, the apartment supply structure in Ha Noi and HCMC has shifted significantly.  

Prior to 2020, Grade C apartments accounted for 80% of market transactions in Ha Noi. However, between 2021 and 2025, the segment's share fell to 35% as demand shifted towards Grade A and B. By Q1/2026, Ha Noi recorded no new Grade C apartment supply, while the city's apartment price index has more than doubled since 2009, highlighting growing affordability challenges for homebuyers. 

Similar momentum can be observed in HCMC. By Q1/2026, Grade C apartments accounted for 29% of primary supply, underscoring the limited availability of affordable housing options.  

2. 3 Solutions for Integrating Affordable Housing into TOD Communities    

To ensure that TOD truly becomes a tool for improving housing accessibility and supporting the goal of homeownership, Giang believes that three areas must be addressed simultaneously: urban planning, financial mechanisms, and land management.

2.1 Urban Planning 

The planning perspective says that rather than maintaining a traditional zoning model that separates residential, commercial, and office functions, areas surrounding metro stations should be developed as high-density, mixed-use communities in line with TOD principles, enabling residents to live, work, and access daily amenities within the same neighbourhood.  

Under this approach, social and affordable housing should be integrated directly into TOD developments, and within a 300–500 m radius from metro stations, or a comfortable five- to ten-minute walk. This would allow low- and middle-income residents to directly benefit from public transport infrastructure rather than being forced to live on the urban periphery.  

Many urban planning experts recommend including a mix of housing types within TOD communities. One commonly cited approach follows a "1-3-6" ratio: one-part ultra-luxury housing, three-part premium housing and six-part affordable or social housing. While the mix may vary by location, the key principle is that housing targets should be established during the planning stage rather than left entirely to market forces.

2.2 Financial Mechanisms

Beyond planning, the success of TOD will depend on whether the right financial mechanisms are in place. Requiring developers to provide affordable or social housing without adequate incentives risks undermining project viability. To encourage private sector participation, governments can offer benefits such as additional development rights in exchange for commitments to deliver affordable, social or rental housing. 

One widely used approach is the floor area ratio (FAR) bonus mechanism, which allows developers to build additional floor area when affordable housing is included. Governments may also consider reducing certain financial obligations for developments that allocate a proportion of their housing to affordable segments. 

In addition, Giang notes that increases in land value generated by new transport infrastructure could help fund affordable housing initiatives. Through Land Value Capture (LVC) mechanisms, a portion of these revenues can be directed towards social housing programmes, rental assistance and resettlement schemes, helping improve housing accessibility for a broader segment of the population.  

2.3 Land Management

The way land is allocated around metro stations will also influence whether TOD can achieve its broader housing objectives.  

Incorporating requirements for social housing, affordable rental housing, pedestrian connectivity and public open space into land auctions and tender processes can help ensure that the value generated by transport infrastructure benefits a wider segment of the population. 

According to Giang, public-private partnerships could provide another pathway. Under such arrangements, the government contributes cleared land while private developers undertake construction, with a portion of completed units allocated to public purposes or social housing programmes. 

Looking Ahead: Is TOD a Sustainable Solution? 

Giang notes that Viet Nam has already laid critical foundations through a series of policies and special mechanisms that support urban railway development, more efficient land use and stronger integration between transport infrastructure and housing. 

"The challenge today is no longer whether Viet Nam should pursue TOD, but how to implement it in a coordinated manner across planning, financing and land management. If implemented effectively, TOD could become one of the country's most important tools for addressing urban housing challenges in the upcoming decades."   

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