From Resolution No. 18 to Resolution No. 21: A Shift in Land Governance Thinking

Editor's Note: Within just four years, the Party Central Committee has issued two major resolutions on land. Resolution No. 21 does not replace or reject Resolution No. 18; rather, it reflects a notable adjustment in the thinking behind land governance and the mobilization of land resources. In this series, Vietnam Weekly will analyze the most significant changes introduced by Resolution No. 21 and their potential implications for citizens, businesses, and the economy.

Resolution No. 21 continues to reaffirm the foundations established by Resolution No. 18: the regime of all-people ownership of land, the State's role as the representative of the owner, the development of the land use rights market within a socialist-oriented market economy, and the objective of unlocking land resources for development.

What is particularly noteworthy lies in the shift of focus.

While Resolution No. 18 sought to enable land to operate more fully under market mechanisms, Resolution No. 21 poses a more challenging question: how can that market be made to serve development, rather than continue to generate speculation, losses, and ever-increasing costs for the economy?

From Market Liberalization to Development Governance

The primary focus of Resolution No. 18 was to enable land to operate more fully under market mechanisms by abolishing the land price framework, improving auction and bidding mechanisms, and developing the land use rights market.

However, after four years of implementation, practical experience has shown that market mechanisms alone cannot resolve all issues. Land-use planning, land allocation, land recovery, land valuation, land finance, as well as losses, waste, corruption, and vested interests remain major bottlenecks.

It is precisely in response to these realities that Resolution No. 21 introduces a new layer of thinking: a decisive shift from an administrative management approach to a development governance approach in land administration.

This does not mean that the State is reverting to a "request-and-grant" mechanism or replacing the market with administrative directives.

Resolution No. 21 Poses a More Challenging Question: How can the market serve development, rather than continue to generate speculation, losses, and ever-increasing costs for the economy?

What is emphasized is that the State must have stronger capacity to design and enforce the rules of the game, address market distortions, balance the interests of different stakeholders, and use land policy as an instrument to achieve development objectives.

The development governance approach is also reflected in land-use planning, with an orientation toward reducing overlaps, increasing flexibility, while maintaining strict control over planning adjustments to minimize delayed planning implementation and localized vested interests.

Perhaps the most significant innovation of Resolution No. 21 is its recognition of land as a national competitive advantage that must be governed effectively, rather than primarily as a resource to be exploited. Accordingly, land prices are no longer viewed merely as the price of an asset, but as an input cost for the entire economy.

Land Prices Are More Than Market Prices

Resolution No. 18 affirmed that the State determines land prices and regulates the additional value generated from land that is not created by land users. Its primary focus, however, remained on determining land prices according to market principles, abolishing the land price framework, and enhancing the independence of land valuation.

Resolution No. 21 does not alter these principles but further clarifies the State's regulatory role. Land prices must be determined based on comprehensive data and scientific methodologies, while also serving the development objectives of each stage, ensuring reasonable input costs for production and business activities, enhancing the competitiveness of the economy, and preventing multiple pricing, artificial price inflation, and price manipulation.

When land prices are driven excessively high, production costs, infrastructure investment costs, and housing prices all increase accordingly. Therefore, land prices are no longer solely an issue for the real estate market; they have become a variable affecting national competitiveness.

However, reducing land costs does not mean that the State should administratively set land prices below market levels.

The challenge posed by Resolution No. 21 is far more complex: maintaining land access costs at a reasonable level to encourage investment and production, while ensuring that the additional value generated by land through planning, infrastructure investment, or changes in land-use purpose does not accrue to only a small group.

If the sole objective is to keep land prices low, public assets may be undervalued and lost. Conversely, if prices simply follow speculative market levels, land will become a burden on investment, production, and housing affordability. Achieving a balance between these two objectives will likely be one of the greatest challenges in institutionalizing Resolution No. 21.

Compensation and Resettlement

Another major change introduced by Resolution No. 21 lies in its approach to land recovery, compensation, and resettlement.

At the time of its issuance, Resolution No. 18 established a progressive principle: resettlement must be completed before land recovery; people whose land is recovered must have housing and living conditions equal to or better than their previous residence, while also receiving vocational training, employment support, and assistance in stabilizing their livelihoods.

Resolution No. 21 continues to uphold these principles but shifts the approach toward "rebuilding people's lives when the State recovers land."

This change reflects a broader perspective. Losing land is not merely the loss of an asset that can be converted into monetary compensation. People may also lose their livelihoods, their communities, and living conditions that have been established over many years.

Therefore, resettlement can only be considered successful when it enables affected people to rebuild their lives, rather than simply providing them with a new place to live.

This approach is also extended to housing policy.

Resolution No. 21 requires the creation of conditions that enable citizens to access housing while prioritizing the development of rental housing and apartment buildings in major urban areas.

Another noteworthy change concerns projects that have been delayed because agreements could not be reached with a small number of remaining land users.

Resolution No. 21 introduces the possibility for the State to recover the remaining land area where an investor has already reached agreements covering the majority of the land and has obtained the consent of the overwhelming majority of land users.

The objective is to remove obstacles facing projects that have remained stalled for years due to the inability to reach agreement over a relatively small portion of land.

However, this is also where the line between resolving bottlenecks and potential abuse becomes extremely delicate. If concepts such as "the majority" or "the overwhelming majority" are not clearly defined in law, a mechanism intended for exceptional circumstances could become a basis for expanding the scope of land recovery.

Combating Speculation and Capturing Land Value Gains

If land recovery policy reflects a shift in the way citizens' rights are viewed, anti-speculation policy more clearly demonstrates the State's regulatory role.

Resolution No. 18 proposed imposing higher taxes on those who use large areas of land, own multiple residential properties, engage in speculation, delay land use, or leave land idle.

Resolution No. 21 maintains this direction but adopts a more decisive approach. Rather than relying primarily on administrative measures to curb speculation, it calls for combining taxation with other economic instruments to make land hoarding more costly than the benefits derived from speculation.

At the same time, land value gains arising from planning, infrastructure investment, changes in land-use purpose, and urban expansion are intended to be recaptured and reinvested in infrastructure, social housing, and social welfare.

While Resolution No. 18 focused on unlocking land resources for development, Resolution No. 21 goes a step further by requiring that these additional land value gains be redistributed more equitably.

To fulfill this regulatory role, Resolution No. 21 places land data at the center of the governance system. Land-use planning, valuation, taxation, inspection, and supervision are all intended to be integrated through a unified data platform to reduce discretionary decision-making and strengthen oversight of public authority.

The Role of the State

The shift between the two resolutions can also be understood from another perspective.

Four years ago, Resolution No. 18 addressed the fundamental challenge of enabling land to operate more fully under market mechanisms in order to unlock development resources.

Four years later, that challenge remains unchanged, but it has become significantly more complex: how can the land market avoid continuing to generate speculation, losses, and ever-increasing costs for the economy?

Resolution No. 21 does not replace the market-oriented thinking of Resolution No. 18. What it adds is a stronger emphasis on governance capacity. The market continues to play its role in allocating resources, but the State must possess sufficient regulatory capacity to ensure that land truly becomes a national competitive advantage, rather than merely an asset whose price continues to rise.

This is perhaps the most significant shift in land governance thinking over the past four years.

Source: VietNamNet News