Vietnam's major cities show signs of decay

Urban decay is the gradual decline of a city due to economic downturn, aging or shrinking populations, deteriorating infrastructure, pollution, and social problems.

Vietnam's two largest cities already exhibit 60-70% of the characteristics associated with urban decay worldwide, including overloaded and aging infrastructure, environmental pollution, localized economic decline, rising social issues, and population shifts.

Without sustainable development strategies, HCMC and Hanoi could face full-scale urban decay within the next 10-20 years mirroring cities like Detroit, Liverpool, Mexico City, and Jakarta.

At a meeting in HCMC on Feb. 28, 2025, the city's officials warned of a sharp rise in business closures and bankruptcies.

This year new business registrations have fallen by over 37% year-on-year and investment by nearly 48%.

Business closures have increased by over 12%. This trend has continued for years, with small businesses struggling to survive and large firms relocating to nearby provinces like Long An, Binh Duong, Dong Nai, and Ba Ria-Vung Tau.

These are early warning signs of urban decay, similar to what Detroit and Liverpool experienced.

An old apartment block in HCMC in need of renovation. Photo by VnExpress/Quynh Tran

Severely congested roads, deteriorating street conditions, inefficient drainage systems, and a lack of public spaces and greenery are major obstacles to sustainable development in HCMC and Hanoi.

These issues raise fears that HCMC and Hanoi could face problems like Jakarta, where poor urban planning and drainage systems have caused severe flooding and congestion.

These problems are so severe that the Indonesian government is relocating the capital elsewhere.

Air pollution is another issue. Hanoi frequently ranks among the world's most polluted cities for PM2.5 levels and HCMC also suffers from hazardous air quality.

The green in both cities is far below national standards and international recommendations at 0.55 square meters per person in HCMC and 2.06 sq.m in Hanoi.

The minimum standard set by Vietnam is 12 sq.m while the UN recommends 10 sq.m.

Modern cities often provide 20-25 square meters per person.

Mexico City once suffered from severe urban decay due to pollution caused by overcrowding, excessive vehicle use and a lack of green space.

Vietnam faces similar risks since environmental decline could speed up urban decay if left unaddressed.

The gap between modern developments and older residential areas is widening.

While upscale areas like Phu My Hung and Thu Thiem in HCMC and Tay Ho Tay and My Dinh in Hanoi receive heavy investment, older apartment blocks and rundown collective housing nearby remain neglected and without clear renovation plans.

Rapid population growth is putting pressure on urban infrastructure as hundreds of thousands move to HCMC and Hanoi each year for work, overwhelming their transport, healthcare and education systems.

Meanwhile, low birth rates and an expanding low-wage labor market disrupt demographic stability, much like in San Francisco, where many workers have been leaving the city.

This shift is a warning sign for Vietnam's major cities.

To prevent urban decay, HCMC and Hanoi need clear, long-term solutions focused on improving transport, drainage and green spaces, reducing pollution by limiting private vehicles and expanding public transit, stabilizing the real estate market, and increasing social housing to improve living conditions.

Stronger urban planning rules are needed to prevent unchecked growth that strains infrastructure.

Detroit, Liverpool, Mexico City, San Francisco, and Jakarta are prime examples of how urban decay can drag a city down in more developed countries than Vietnam.

Without timely intervention, Hanoi and HCMC risk facing similar problems, affecting millions of their residents.

With the right policies and strong commitment to reform, both cities can still become livable, modern and sustainable urban centers.

*Dinh Hong Ky is the vice chairman of the Ho Chi Minh City Business Association and vice chairman of the Vietnam Association for Building Materials.