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.