"In some cases, landowners contribute one hectare of agricultural land and receive approximately 1,000 square meters of urban land in return. Although the land area is reduced, its value increases significantly," Prof. Dang Hung Vo explained.
Table of Contents
Discussing land acquisition, site clearance, and urban redevelopment in Vietnam, Prof. Dr. Dang Hung Vo, former Deputy Minister of Natural Resources and Environment, observed that Vietnam's current approach still largely revolves around a straightforward mechanism: residents whose land is acquired receive compensation, after which the land is allocated to investors to implement projects.
"We are still struggling to resolve the bilateral relationship between those who currently own the land and those who need it to develop projects," he said.
Meanwhile, many countries have shifted towards a land readjustment model – a mechanism that no longer views the issue solely from the perspective of landowners losing their land and businesses acquiring it, but instead considers the broader context of community development.
Under this model, residents contribute their land to the urban redevelopment process, while the State takes responsibility for planning, coordinating, and allocating land for infrastructure, public services, and commercial development. The added value generated by the land after planning is then reinvested in the community.
"This is no longer a matter between two parties, but a matter concerning the entire community," Prof. Vo emphasized.
Drawing on international experience, Prof. Dang Hung Vo noted that Washington, D.C., the capital of the United States, was established based on mechanisms involving land contribution and land readjustment.
Under this approach, agricultural landowners contributed their land to the development of the capital. Once infrastructure and urban planning had been completed, they received a portion of urban land in return, with a significantly higher value.
"In some cases, landowners contribute one hectare of agricultural land and receive approximately 1,000 square meters of urban land in return. Although the land area is reduced, its value increases significantly," he said.
Germany subsequently developed this model, which then spread to Japan during the Meiji era. Japan continued to refine the mechanism and promote its adoption in several other Asian countries, including South Korea, China, Thailand, and Malaysia.
The common principle is that residents do not simply receive a one-time compensation payment and leave. Instead, they retain a role in the new urban development structure.
"Residents should become shareholders in the development of their own land"
According to Prof. Dang Hung Vo, the greatest value of land does not lie in the initial compensation payment, but rather in the added value generated once an urban area has been developed.
An area that was previously agricultural land or had inadequate infrastructure can experience substantial increases in land value once roads, schools, hospitals, shopping centers, transport connections, and other facilities are developed.
"If residents only receive compensation and leave, the entire increase in value will belong to the investor or the market," he explained.
Therefore, land contribution and land readjustment models can help residents retain long-term benefits through redistributed land plots or rights to participate in development projects.
"Residents must remain connected to the project and benefit from its development, rather than simply receiving compensation and ending their involvement," he said.
Another noteworthy issue highlighted by Prof. Dang Hung Vo is the TOD (Transit-Oriented Development) model for new urban development. According to him, in modern cities such as Hanoi and Ho Chi Minh City in the future, transport infrastructure will increasingly move above ground or underground, while development will be concentrated around transport hubs, metro stations, and transit centers.
"We will no longer see roads being extended and buildings springing up alongside them in a sprawling, oil-spill-like pattern," he said.
This means that the traditional concept of "road-front land" will gradually change. Urban value will increasingly concentrate around transport hubs – locations integrating commercial activities, services, logistics, and housing.
Prof. Vo believes that these are also the areas where the State needs to establish mechanisms to capture increases in land value and reinvest them in infrastructure.