“Informal” constructions in Hanoi is commonplace, not just in terms of its extensiveness but also how such extensions been done creatively. Most importantly they refer to a wide range of housing forms and scales: from illegal extentions of balcony and roof-tops to the extra legal apartment hotels in the Ancient quarter, from the single middle class family houses to large scale master planned new urban areas. What is being “illegal” and “authorised” is oftentimes blurry or shifty as regulations are ambigous and conflicting and in constant change. The distinction between practices of resistance (by the residents/entrepreneurs) and complicity (by local government officials) is not always clear. This paper will examine such phenomenon by examining cases of informal/illegal construction covered in the media, studies of the changes and adjustments of building regulations, as well as in-depth interviews with local officials, construction entrepreneurs as well as the residents. Analysing the fluid and negotiating character of state society relationship in the transitional Vietnam, the paper highlights the role of the state and local government in maintaining and reproducing the regime of informality as a means to wield power and exercise of control.