Quantitative cost-benefit analysis for typhoon resilient housing in Danang city, Vietnam

• Investment in housing resilience measures can be cost-effective.
• The return in housing is positive when events occur early in the house’s lifetime.
• If climate change is included, there is a higher return on the investment.

Located in Central Vietnam, Da Nang city is experiencing rapid urbanization and development. In recent years, floods and storms have caused critical damage and losses to local communities and destroyed thousands of houses despite great efforts of local governments and agencies toward disaster risk reduction. Housing is one of the most vulnerable sectors to climate extremes, of which typhoons exhibit the greatest impact in comparison to other climate hazards. This paper examines the costs and benefits of applying typhoon resilient housing measures in Da Nang. The paper aims to test the hypothesis that using typhoon resilient housing has a positive economic return. The cost-benefit analysis (CBA) results show that the return on investment of typhoon resilient housing is positive when typhoon events occur early in the lifetime of the house, suggesting that the investment in typhoon resilient housing is economically desirable. The results from the research illustrate that positive returns exist in most of the scenarios tested, yet home owners are choosing not to make this investment. The findings have investigated the information asymmetry gap that exists between innovation and adoption and explores policy implications to reduce the gap.