Disparity in housing affordability: evidence from a developing city

Abstract

This study addresses critical gaps in the existing literature by investigating housing affordability in developing countries and integrating quality considerations into standard affordability measures. Using survey data from a random sample of 670 households in Ho Chi Minh City, Vietnam, we conducted a distributional analysis to examine disparity in housing affordability and regression analysis to investigate factors influencing housing affordability. Our results reveal significant disparities in housing expenditure within HCMC households. On average, housing expenditure accounts for 12.78% of total household income, with renters bearing a disproportionate burden, as rent alone consumes a 27.19% of their income. The highest income quintile dedicates three times more to housing expenditure and consumption than the lowest quintile. The highest housing expenditure quintile covers 90% expenditure, while enjoying 50% of the housing consumption value. Regression results illustrate that housing expenditure and consumption are responsive to long-term income fluctuations, and more responsive to short-term income changes when comparing to results from the distributional analysis. Regressions also reveal no gender-based disparities in housing affordability. Our findings suggest a gender-neutral, affordable housing programs focusing on low-income renters, and the incorporation of flexible payment plans to address income fluctuations.

Keywords:

• Housing affordability
• inequality
• permanent income

Reviewing Editor:

• Francesco Tajani, University of Rome La Sapienza Department of Architecture and Design: Universita degli Studi di Roma La Sapienza Dipartimento di Architettura e Progetto, Italy

Subjects:

• Urban Studies
• Urban Policy
• Development Studies
• Population & Development
• Development Policy
• Economics

Disclosure statement

No potential conflict of interest was reported by the author(s).

Data availability statement

The dataset is owned by the funder, and its availability is subject to the funder’s discretion.

Additional information

Funding

This research is funded by University of Economics and Law, Vietnam National University Ho Chi Minh City - VNU-HCM

Notes on contributors

Thuy Tien Huynh

Huynh Thuy Tien is a lecturer at the University of Economics and Law, Vietnam National University Ho Chi Minh City/VNU-HCM. Her research expertise spans various domains, including housing economics, housing policy analysis, and household behavior.

Dang Thuy Truong

Truong Dang Thuy currently serves as the Chair of the Department of Economics at the University of Economics Ho Chi Minh City. He is an economist and an active researcher with a focus on various aspects of household behavior, utility pricing, and public attitudes toward renewable energy.