Vietnam's real estate market is at a pivotal moment of reform. There are a series of new regulations that have been issued to regulate this sector, with the issuance of Notice No. 294/TB-VPCP on June 9, 2025, the government has signaled a decisive move to overhaul the market's operational framework. On October 8, 2025, the Government […]
The recently amended Capital Law, passed by the National Assembly on May 28, has introduced a transformative legal framework for Hanoi. This law aims to foster synchronized, sustainable, and distinctive development while enhancing social security and living facilities. By emphasizing innovation and decentralization, it creates opportunities for city authorities to utilize unique mechanisms and mobilize resources effectively. A standout feature of this amendment is the pilot implementation of two innovative urban development models: Transit-Oriented Development (TOD) and Business Improvement District (BID).
Urban Planning as a Key Driver
Urban planning has been highlighted as a critical tool for managing Hanoi's growth. While TOD and BID are well-established models in many developed countries, they are newly introduced to Hanoi through this legal amendment. Their implementation has the potential to redefine the city’s urban landscape, offering a fresh approach to sustainable and inclusive development.
The Transit-Oriented Development (TOD) Model
The TOD model prioritizes the development of residential, commercial, and entertainment areas around public transport hubs, such as bus stops and railway stations. By reducing dependency on personal vehicles, this model aims to create a more sustainable and accessible urban environment. It also enhances the quality of living by ensuring that essential public services are within easy reach.
Hanoi’s urban planning project has already identified the construction of 14 urban railway lines, which will serve as the backbone for TOD implementation. These railway lines will form the foundation for new urban areas, strategically located to allow residents to walk conveniently to public transport hubs. This integration of public transport into urban planning is expected to reduce traffic congestion, improve environmental quality, and provide better access to amenities.
The Business Improvement District (BID) Model
BID is another forward-thinking approach that combines economic development with cultural preservation. This model involves collaboration between governments, corporations, and communities to create vibrant urban areas. By promoting cultural and commercial activities, BID serves as a catalyst for local economic growth, environmental conservation, and heritage preservation.
In Hanoi, the historic "36 old streets", known for their cultural significance, provide a perfect opportunity for BID development. These areas can be revitalized into bustling hubs of cultural and commercial activities, attracting tourists and generating economic benefits while safeguarding the city’s heritage. Such initiatives have been successfully implemented in countries like the United States, Germany, and Japan, United Kingdom, Australia, and Singapore, offering valuable insights for Hanoi’s future development.
Opportunities and Challenges
The implementation of TOD and BID presents significant opportunities for Hanoi to enhance its urban identity and improve the quality of life for its residents. However, several challenges must be addressed to ensure the success of these models.
One major hurdle is the current state of urban development in Hanoi. Certain inner-city districts have been poorly managed, resulting in issues with urban landscapes and building architecture. Additionally, uneven development between inner-city and peripheral districts creates disparities that may hinder the smooth adoption of these models.
Both TOD and BID require substantial financial investments, which pose challenges in securing early-stage funding. Successful implementation will also demand close collaboration among government agencies, businesses, and local communities. The risk of public infrastructure being overwhelmed and real estate prices rising around these development zones further complicates the process. Addressing these concerns will be essential to achieving sustainable and equitable urban growth.
Strategies for Successful Implementation
To overcome these challenges, Hanoi’s authorities must adopt a comprehensive and strategic approach. A synchronized planning system, encompassing socio-economic, construction, and transportation planning, is crucial. Clear development roadmaps will help ensure that the goals of TOD and BID are met efficiently.
Integrating public transportation, commercial activities, and residential spaces into urban planning is another essential step. By creating well-connected urban areas with both surface and underground infrastructure, the city can provide residents with easy access to services and amenities without long commutes.
Preserving Hanoi’s historical and cultural values should also be a priority. The unique architecture and cultural heritage of the city’s urban areas form a strong foundation for socio-economic growth. Leveraging these assets will enhance the city’s identity and improve the quality of life for its residents.
Mobilizing resources effectively is key to the success of TOD and BID. By utilizing specific mechanisms allowed under the Capital Law, Hanoi can attract non-state investments and prioritize critical projects like parks, pedestrian zones, and advanced public transport systems. Technology can play a vital role in monitoring and addressing issues during the implementation process, ensuring timely solutions and efficient management.
Conclusion
The introduction of TOD and BID under the amended Capital Law represents a groundbreaking step for Hanoi. These models hold the promise of transforming the city into a more sustainable, accessible, and vibrant urban center. By addressing challenges such as resource constraints, infrastructure demands, and social equity, Hanoi can unlock the full potential of these development approaches. With strategic planning and collaboration, the city stands poised to usher in a new era of growth and innovation.
Author: Master, architect Pham Hoang Phuong is an expert in research and critical theory on architecture, planning and urban development management, with nearly 25 years of experience; former deputy editor-in-chief of Vietnam Architecture Magazine and is currently working at the National Institute of Architecture (Ministry of Construction).
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