Privatization of neighborhood governance in transition economy: a case study of gated community in Phu My Hung new town,Ho Chi Minh City,Vietnam

Literature on common-interest development (CID) in housing, most common in the form of gated communities, has been based largely on the US’s experience, where the interpretation has centered on the interaction between three actors (local government, private developer, and homeowner association) and barely focused on the privatization of neighborhood governance in transition economies. This paper, through a case study of gated community in Phu My Hung new town shows that Ho Chi Minh City, Vietnam—in the context of transition from centrally-planned to market-based economy—has been witnessing this privatized phenomenon of neighborhood governance. It employs both primary data, collected through observation and key informant interview, and secondary data to explain the contextual factors for the rise of gated communities in the city and find out the mechanism of neighborhood governance. In the city, housing privatization reforms, influx of foreign direct investment, and the formation of urban middle class have constituted the supply- and demand-side factors for the rise of gated communities. In addition, the reforms towards grassroots participation created a favorable environment for a privatization of neighborhood governance in which the private developer plays a dominant role in partnership with local government and homeowner association. To a certain extent, this privatization is similar to the case of US’s gated communities, however, it does not threaten the public authority and instead maintains a good collaboration between these three actors. This is an indigenous innovation of gated communities in Vietnam due to its socio-economic conditions and political context.