Real estate sector has key role in making Vietnamese cities more liveable

As urbanization proceeds at a scorching pace in Vietnam, liveability in Vietnamese cities has become a matter of concern that real estate firms should help address. They should work with various stakeholders towards more thoughtful decisions to create more vibrant and purposeful urban spaces, write analysts with consultancy firm Avison Young Vietnam.

Ties with a market or a region greatly impact the interest of city residents in supporting, developing or reimagining their surroundings for further growth and improvement.

For people to come, stay, or even return to a city, it must provide them with direct and indirect values, of which the highest one is improved quality of life. A liveable city meets the collective needs, desires and interests of personal development (including job opportunities), income, safety, health and well-being. In so doing, it engenders positive emotions and connections – a sense of belonging that inspires residents to support the larger community in the long term.

Ho Chi Minh City was recently ranked the top residence of choice for Vietnamese people (PAPI 2023, UNDP), making it the most liveable city in the country, in a sense. The city has long been one of the most popular destinations for internal migration, a key economic hub that attracts generations from across the country. Among the top reasons for this are abundant career opportunities, better public services and less natural disasters.

The tremendous growth of HCMC reflects the bigger picture of economic development in Vietnam since 1990s. In just a few decades, Vietnam has witnessed a massive acceleration of urbanization. More and more people are moving to cities and by the end of 2023 almost 40% of the country’s population of more than 100.3 million people were urban residents. It has been estimated that by 2030, over 45% of the country's population will live in cities.

While people’s quality of life has improved significantly, the surge in urban population is exerting a lot of pressure on municipal administrations and impacting the liveability of major cities.

The city’s population had topped 9 million by end-2023 and is estimated to exceed 16.8 million by 2040 by municipal authorities. This growth has given rise to multiple challenges including housing shortages, traffic congestion, pollution, overcrowded public schools, overloaded medical clinics and hospitals as well as a lack of public recreational spaces and green areas

HCMC is not the only city that’s expanding rapidly and facing attendant challenges. Many cities around the world are in the same boat.

Egypt’s Greater Cairo Region, for example, saw its population reach more than 22 million last year from just circa 6 million residents in 1965 (JICA, 2008). This is predicted to double by 2050. Overpopulated Cairo has been mentioned as an uncomfortable city where residents living with a constant feeling of stress and struggle to complete any task, no matter how small.

In China, the proportion of urban population has exploded from about 19.39% in 1980 to nearly 66.16% in 2023. Air and water pollution are among common problems faced by almost all metropolitan areas in the country

Inevitable challenges

Despite all the problems, urbanization is inevitable and it is estimated that by 2030, over 60% of the world population will be living in cities. This phenomenon will be accompanied by developments that create liveability challenges, including infrastructure deficits, over-stretched public services, environmental degradation, increased vulnerabilities to disasters and climate change, unequal access and affordability.

The myriad of problems has generated calls for the revitalization of cities across the globe towards making them more engaging, inclusive and liveable. One way to do this is making “social value creation” a priority.

"When a city is built for the stakeholders it serves, it will attract various residents and visitors – all critical for a successful economy. And in advancing this approach, real estate firms can play an active role," said David Jackson, principal and CEO of Avison Young Vietnam.

Real estate is a crucial connector between the development of a city and the health and wealth of its people. When looking at the role of real estate firms in liveable cities through the ‘social value’ lens, we can determine what ‘good’ looks like for the unique demographic that lives within a set region, shaping the landscape of the city around collective wants, needs and desires.

This often expands beyond the capital value of real estate assets and includes support, services, and meaningful cultural infrastructure that not only meet needs but also generate emotional connections for residents.

“Because it is the people who drive the economic recovery and development of cities. For people to develop strong bonds with a place and become a part of the community, there needs to be reasons for them to feel inspired,” said Jackson.

How it works

Experiences from cities like major cities around the world, like Seattle, New York, Vancouver, Bristol and London show how the real estate sector can play a more active role in creating spaces for community engagement, contributing thereby to the liveability of cities.

Activating ‘in-between spaces’

Given limited urban land and space, smart and practical ways have to be found to utilize space across the built environment. Activating the “in-between spaces”, or transitional spaces such as entrances, lobbies and courtyards helps connect the public realm to the often private or exclusionary environment within buildings. This activation creates new user experiences and opportunities for more community interaction.

Open courtyards within private residential developments and pedestrianized alleyways offer examples of functional in-between spaces. Courtyards can house social infrastructure such as seating areas and playgrounds, creating spaces for both residents and community members to interact.

At HopeWorks Station near Seattle (Washington state), a public inner courtyard provides outdoor seating and recreation space forthe development’s 65 affordable housing units as well as the surrounding community.

In Vancouver (Canada), Alley Oop serves as a reimagined laneway – or alleyway – with cafe seating, local artwork and a community basketball hoop. Alley Oop’s design was derived from a community engagement process that highlighted the need for recreational space in downtown Vancouver.

Temporary interventions

Temporary interventions can be utilized to introduce urban activity and influence permanent solutions. These serve as test runs to find out if an approach will fit the needs of stakeholders and prove cohesive.

In New York city, an Open Restaurant program introduced to provide expanded permits for outdoor dining during the pandemic laid the groundwork for a permanent initiative.

The success of outdoor dining and continued demand for permits motivated Mayor Eric Adams to introduce the Dining Out NYC program and permanently change the fabric of the city’s public realm.

Self-proliferating ecosystem

Providing opportunities for local businesses and SMEs fosters economic diversity and resilience. These opportunities could take various shapes including retail spaces of various sizes, flexible offices and affordable workplaces. Incubators for entrepreneurs nurture innovation and creativity within the local economy. Engine Shed at Bristol Temple Meads (UK) is an innovation hub that provides workspace, business support, and professional development opportunities for entrepreneurs.

Rents in city centres are unaffordable for small businesses and facilitating their work can help maintain diversity and authenticity of the urban core. In 2021, the Greater London Authority introduced the expectation that all London boroughs incorporate affordable workspace policies into their development plans. In response, boroughs are taking different approaches to creating such spaces with several introducing a requirement for developments over a certain size to provide a proportion below market rents.

In 2022, there was 7,144 sqm of operational workspace with an estimated further delivery of 3,258 sqm. One affordable co-working space, SPACE4 (London, UK), reported over 100 regular users. Maintaining the affordability of workspaces is important not only for economic growth but, for economic diversification and local job creation as smaller local businesses often spend more in the local supply chain and employ locally.

Revitalizing cities and making them more liveable through a social value lens and designing solutions around the needs and interests of people will improve the performance of all commercial assets. Social value creation is a collective effort, and it is challenging, but it will pay off in the long run.

"For private developers, diversification and revitalization for real estate are harder to achieve than just profit goals. A change in strategy means a change in how resources are allocated – whether it is space, money, time or people. However, each real estate decision should be seen as an opportunity to lead towards values that improve cities and communities, as also their liveability," said Jackson.