Affordable rental neighborhoods devoid of life

Over the past few years, the rental property with 17 rooms belonging to Le Van San, 60, and his family at Bau Hamlet, Kim Chung Village, Dong Anh District, Hanoi has only had half of its rooms occupied. Even though the place is spacious and clean, with rent set at only VND500,000 (US$21) per month, more and more people are leaving, and few are coming in.

In an effort to hold on to his renters, San has allowed them to rent an extra room for free.

About 300m from San, the house containing nine rooms owned by Hoang Cong Sy, 72, only has two people staying long-term. Even when he lowered the price as much as possible down to VND300,000, something that could only be found a decade ago, no one batted an eye.

"Workers used to flock to these streets, but I don’t know where they’ve all gone," Sy says.

The Bau, Nhue, and Hau Duong hamlets in Kim Chung Village were once known the "rental metropolis." The opening of the Bac Thang Long industry area 20 years ago improved the villagers’ livelihood as they were able to make money opening shops and renting out rooms.

San and his family were one of the first to build a rental house in 2003, with each room 10 sq.m. large. Back then, a worker’s salary was VND350,000 per month, and the rent was VND150.000, shared between four to five people.

"After 2-3 years, we’re already able to make the money back we spent on building," San says.

San built a house with 17 rooms in 2003 that was once overflowing with workers. For two years now, maximum capacity has reached only 10 out of 17 rooms. Photo by VnExpress/ Phan Duong

As time went by, better and more beautiful rental houses were built, attracting renters away from the simpler rooms as these newer constructions included private bathrooms and more modern amenities

San and Sy had been keeping their rents stable for over a decade now, and others have lowered their prices to attract customers, but nearly all their properties are practically empty.

Hoang Duc Khang, Vice President of the People’s Committee at Kim Chung Village, says that in the 2010s, over 1,000 families built rental houses in the village area.

"But no one stays in those rooms anymore," he adds.

To explain this phenomenon, Khang says that on one hand, those types of rooms are gradually becoming dilapidated, and on the other, an increase in workers’ salaries has allowed them to live in better places.

Furthermore, most companies have transportation services for their employees within a 50km radius, allowing them to come and go freely without having to rely on renting a place to stay nearby.

Nowadays, there are 900 families still maintaining their room rental businesses in the village.

The overabundance of rooms for rent and lack of renters is also apparent in rental properties on the outskirts of Hanoi and in the inner city.

At Tan My Village, My Dinh 1 Ward, Nam Tu Liem District, two rooms 16 sq.m. large owned by Le Tuyen, 55, have been vacant for two years. She has considered renovation to attract customers, but the plans would end up costing hundreds of millions of dong (VND100 million = $4,200).

"It was too expensive, so I couldn’t do anything," Tuyen sighs.

A room for rent in Hanoi's Nam Tu Liem District. Photo by VnExpress/ Quynh Nguyen

After seeing how potential customers would shake their heads and walk away after looking at her advertisement sign, she made the heavy decision to take it down and leave the rooms empty.

Hoang Linh, a 33-year-old real estate agent in Hanoi with over a decade of experience, states that as the economy improves, the needs of renters has shifted from finding a cheap place to finding a place that is beautiful and modern, even if the rent is higher.

The need for fully furnished lodgings is not only present in office employees, but also in university students and industrial workers. Many people are even willing to pay half of their salary to secure a place that fits their standards.

"For every 10 customers, seven want to find a clean, spacious place with amenities included, even if the price has increased 30-50% compared to last year," Linh says.

At the "rental metropolis" Kim Chung Village, finding ways to rebuild or renovate the properties is a mind-boggling problem.

San and his family have decided to run business as usual in the hopes of earning whatever they can.

Sy’s family is in a more dire situation. Two years ago, Sy and his wife moved from their rural hometown to the city to be near their children, and invested VND800 million in the 300 sq.m. property to generate income for themselves. They also built a room to live nearby.

Their hopes did not come to fruition, as they are only able to earn VND600,000 per month from renting, a sum too little to even think about making back their investment.

"Nowadays, I just want to have customers so the place is less empty and lonely," Sy says.