[Research Contribution] Policy for preserving historical villas in Ho Chi Minh City: Focus on Group 1 and Group 2 Villas

7 March, 2025

Keywords: Historical villa preservation, Ho Chi Minh City, Group 1 villa, Group 2 villa

In order to address the challenges of preserving historical villas in Ho Chi Minh City, especially Group 1 and Group 2 villas, the researcher group from the University of Economics Ho Chi Minh City (UEH) has researched to propose a policy framework that combines legal support, economic incentives, public-private partnerships and community participation in the preservation of historical villas, maintaining cultural identity and bringing long-term economic benefits to Ho Chi Minh City.

With an annual urbanization rate of approximately 3.5% (World Bank, 2021), Ho Chi Minh City’s rapid urban expansion presents both opportunities and challenges for the conservation of cultural heritage, especially historic villas in the central area. These villas, numbering more than 239, are classified into Group 1 and Group 2 based on their architectural and historical significance according to the latest report. All villas in the above two groups are located in the city center in Districts 1 and 3; on the other hand, this is not subject to increased pressure from urban development and infrastructure expansion. The pressure and the demand for economic exploitation of the assets pose challenges for conservation policies. Therefore, it is necessary to develop effective policy frameworks to protect these cultural assets in conjunction with socio-economic development. The key to successful conservation lies in balancing heritage conservation with economic sustainability, and between community interests and property owners’ interests. City policies should aim to strike a balance and to ensure that these historical, architectural and cultural heritages will be an important part of the urban landscape and continue to contribute to the city’s unique identity as it develops.

Policy suggestions

Article 122 of the Housing Law provides the legal basis for the conservation of historic housing, including villas with artistic, architectural, cultural and historical values. The law stipulates that these houses are eligible for support and receive funding for conservation efforts from provincial authorities, depending on local conditions (Housing Law, 2023). However, implementation lacks clear guidelines and mechanisms to ensure that the law effectively supports conservation attempts. Therefore, the UEH researchers have proposed to consider additional policy options that allow for varying degrees of private participation.

*Government acquisition of villas with high public benefits (100% state investment)

The government may consider acquiring villas classified in Group 1 with high cultural and historical significance to prioritize conservation. Preserving key architectural features and historical and cultural elements requires a high level of investment and management that, in many cases, is beyond the capacity of private owners. In some cases, these villas are difficult to be reused for commercial exploitation. Therefore, buildings of this type need to be directly managed and controlled by the government. Depending on budgets, these villas can be incorporated into public spaces, for example, cultural centers or as agency headquarters to enhance public access and appreciation while maintaining historical, cultural, and architectural integrity. The use and the public access of these buildings can be referred to in the case of the Notre Dame Cathedral Post Office and the City People’s Committee. The government can consider purchasing the townhouses adjacent to the villas that are expected to be acquired to best support conservation.

Article 122 of the 2023 Housing Law is the basis for public funding to support the conservation of historic villas and can give priority to acquisition. After the acquisition, the City People’s Committee can consider handing over to public service units for exploitation. This approach ensures that the most at-risk assets receive priority support while also encouraging public-private partnerships in heritage management by state agencies. The implementation of tax exemptions for the exploitation of these assets by these units can significantly reduce the financial burden on the budget.

*Implementing public-private partnerships in conservation (State investment of at least 50%)

Public-private partnerships provide a viable mechanism for sharing the financial burden of conservation. In Singapore and Malaysia, governments engage in public-private partnerships to conserve heritage without incurring too much of a financial burden. Singapore’s adaptive reuse model of townhouses is particularly noteworthy. By converting historic buildings into commercial spaces, like boutique hotels or restaurants, the government has successfully preserved cultural heritage while creating economic value for the community (Urban Redevelopment Authority, 2021). In Ho Chi Minh City, we could consider similar forms of tax breaks, grants for heritage restoration, and planning incentives to engage private owners in the conservation of their homes. Public-private partnerships involving property developers are an example of effective management of limited public resources, tapping into a sense of social responsibility in the trade-off between development and conservation. Partnerships with developers interested in commercial use of heritage assets can help offset site-specific conservation costs. For example, we can offer property developers the opportunity to use the villas for offices, showrooms, art galleries, boutique hotels, shophouses with revenues reinvested in maintenance and restoration activities. This approach has been effective in Malaysia, where several restored shophouses in Penang have been successfully converted into vibrant commercial spaces (Harun, 2011). However, clear guidelines need to be established to ensure that commercial uses do not compromise the historical integrity of the villas. The implementation of the PPP program also needs to be based on a legal framework and strict monitoring as recommended by experts to avoid previous mistakes (World Bank, 2018).

*Increased community participation in conservation (State investment up to 50%)

Community involvement is key to ensure that conservation efforts reflect the cultural values and priorities of the people. Establishing a public forum or voting mechanism to decide which properties are conserved will ensure transparency and accountability in conservation policy. People should have the opportunity to contribute their opinions on the significance of these villas as their knowledge is important in tailoring conservation efforts to reflect the values of the community. Involving universities with relevant training in contributing to conservation projects can also promote a sense of ownership and educate the younger generation concerning the importance of cultural heritage.

Heritage tourism is an important tool for generating economic value from historical conservation. By promoting and planning the area of Group 1 and Group 2 villas located close together as the main attraction in heritage tourism routes, the City People’s Committee can help promote tourism while providing additional funding for conservation. Research in the world (Rypkema, 2013) and conservation data collected in Ho Chi Minh City (Nguyen et al., 2021, Nguyen and Nguyen, 2022) indicates that house prices near preserved historical sites tend to increase. This fact can provide profits and encourage private participation in heritage conservation if there is a clear mechanism. This is consistent with some localities in the world where the government uses tourism as a means to make conservation economically viable. The implementation of heritage tourism routes and guided tours that include these villas could enhance the tourist experience and generate revenue through entrance fees, which could be reinvested in maintenance (UNESCO, 2019). The government could support this through tourism promotion and tax incentives for the commercial exploitation of villas.

Community involvement could also be demonstrated through the future Cultural Heritage Conservation Fund in Ho Chi Minh City. The establishment of a Conservation Fund with public and private contributions could significantly enhance the heritage conservation efforts of historic villas. This fund would be dedicated to providing subsidies or low-interest loans to villa owners, especially those classified as in urgent need of restoration. A fund like this could also support technical training for artisans and masons skilled in heritage restoration, developing local expertise and creating a sustainable support system for ongoing conservation. Funding sources could include a levy on real estate transactions in the city, corporate social responsibility contributions from businesses, and international grants from organizations such as UNESCO.

Transfer of Development Rights (TDR) is another potential mechanism that can be used to balance private interests with conservation goals (Pham Tran Hai et al., 2022). Once approved, owners who are restricted from developing and renovating their villas receive compensation in the form of development rights applied to their other properties, for example, increased land use ratios in areas restricted by existing zoning. In this case, the government does not lose money and effectively exploits private sector participation.

Lessons from Singapore and Malaysia

Examples from Singapore and Malaysia showcase how effective use of public-private partnerships, economic incentives, and adaptive reuse can ensure the sustainable conservation of heritage assets. By adopting similar strategies, Ho Chi Minh City can achieve a balanced approach to cultural heritage conservation while minimizing public expenditure. However, adapting these models requires careful consideration of local contexts, including differences in legal frameworks, economic conditions, and cultural values.

*Singapore’s Adaptive Re-use and Financial Incentives

Singapore has been at the forefront of heritage conservation through adaptive reuse of historic properties. The Urban Redevelopment Authority (URA) has adopted policies that ensure historic townhouses and villas to be preserved while allowing them to be reused for modern purposes. For example, the adaptive reuse of historic buildings into commercial spaces like hotels and restaurants not only preserves cultural assets but also creates significant economic value, turning these properties into businesses that are well-competitive in the market (URA, 2023).

The Singapore government’s financial incentives make conservation attractive to private owners. By providing tax breaks, flexible planning regulations, and subsidies for heritage restoration, the government has effectively reduced the financial burden on private owners. In addition, the authority has provided detailed and transparent guidelines for restoration and conservation that help ensure that the original character of buildings and structures is maintained, even when they are repurposed for contemporary use (Nguyen, 2022). However, it should be noted that Singapore’s strong government control and smaller geographical area may make these policies easier to implement than larger cities like Ho Chi Minh City.

* Malaysia’s Public-Private Partnerships and Selective Conservation

Malaysia has been successful in using public-private partnerships to preserve historic buildings, especially in heritage-rich areas like Penang and Melaka. The government approach involves providing initial funding for conservation, supplemented by private investment to adapt these buildings for new uses like hotels, restaurants and galleries (Harun, 2011). This strategy has proven effective in reducing financial pressures on public resources while leveraging private-sector innovation for adaptive reuse. The Malaysian government also selectively decides which buildings to be conserved based on their cultural and economic value, ensuring that limited public funds are allocated where they can have the greatest impact. For example, heritage properties deemed essential for tourism development are prioritized for conservation while other properties are encouraged for adaptive reuse under private ownership.

In-depth Villa Classification for Cost-Effective Intervention

The classification of villas into Group 1 and Group 2 allows the Department of Planning and Architecture to prioritize based on architectural status, cultural significance, ownership and economic potential, which can help achieve conservation efficiency. There are many frameworks for assessing the quality of monuments (Li, Y. et al. 2021); therefore, the scope of this article is to propose an additional assessment of economic factors to form a comprehensive framework on a small scale applicable to villas in the above 2 groups as implemented in some places in the world (Rypkema, D., et al. 2013).

To ensure rigorous criteria, impact conservation policy and ensure the most efficient allocation of resources, the following matrix can be used to evaluate each villa on aspects such as architectural condition, cultural importance, and economic potential:

Construction	Degree of conservation needed	Estimated conservation costs	Cultural significance	Tourism potential	Villa value	Average property price in the area	Optimal business potential	Potential high-quality jobs
A
B
C

Using a criteria system that includes an economic impact analysis for each villa can help determine the potential for heritage tourism and the financial benefits of conservation versus development, or the choice between adaptive reuse in a high-value area versus government purchase as office space. Once the results for each criterion are available, the Department of Planning and Architecture can apply tools like Cost-Benefit Analysis (CBA) to support the development and financing decisions for the villas (World Bank 2018).

The preservation of Ho Chi Minh City’s historic villas in Group 1 and Group 2 requires a comprehensive approach that combines legal support, economic incentives, public-private partnerships, and community engagement. Further categorization of these villas, based on criteria like architectural status, economic potential, and ownership, ensures that policies are effective and tailored to the specific needs of each property. Drawing on successful practices in Singapore and Malaysia, recommendations for cultural heritage conservation are linked to economic efficiency in the context of limited budgets. In particular, adaptive reuse, selective conservation and encouraging private owners to invest in conservation have proven effective in maintaining cultural heritage without placing an excessive financial burden on the budget in many countries. By taking a similar approach, Ho Chi Minh City can ensure that its unique historical character is preserved, providing both cultural and economic benefits for future generations. Delays in conservation may result in an irreversible loss of these irreplaceable cultural assets, negatively affecting not only the historical landscape but also the ability to exploit the potential of cultural tourism and community identity.

Author: Dr. Nguyen Luu Bao Doan – University of Economics Ho Chi Minh City

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