The overall house renting experience in Dhaka is largely informal and so leaves room for discrimination by individual homeowners. In addition, lack of knowledge of the law means tenants rarely seek legal recourse from demanding landlords.
This is the view found by a study conducted by the BRAC Institute of Governance and Development (BIGD), titled State of Cities 2017: Housing in Dhaka. The report analysed the state of formal housing from the perspective of the middle class flourishing in Dhaka. In total, 400 households in Badda, Mirpur, Old Dhaka, and Rampura were surveyed.
With high land and house prices, Dhaka is largely a renters’ city. The urban housing market is dominated by the private sector, with 93 percent made up of real estate developers and individual land owners who construct and rent out residences. Tenants who rent from private developers often end up frequently changing houses as they are at the whim of individual homeowners.
Mohammad Mohiuddin Howlader, 58, works at an NGO and lives in a rented apartment in Uttara. He has changed homes four times in the last decade. Sometimes due to rent increases, sometimes due to unreasonable demands of the landlord.
But Mohiuddin has no aspirations of buying a place in the city to bring stability to his housing situation. “It’s too expensive to buy a home in Dhaka anymore. I would not consider a loan as interest rates are very high as well.”
The 1000 square feet apartment he is currently renting has a market value of BDT 60 to 80 lakhs. High land and home prices, lack of savings, and high interest rates of bank loans were found by the survey to be major barriers to Dhaka residents becoming homeowners. Like Mohiuddin, 68 percent of tenants surveyed do not have plans to own an apartment or house in the city.
According to a standard measure worldwide, housing is considered affordable if rental (or mortgage) costs including utilities add up to less than 30 percent of monthly household income. The State of Cities 2017 survey found that 82 percent of households in Dhaka exceeded this affordability threshold.
As a result, renters face high opportunity costs. More than half of the households surveyed said they had to adjust their other expenses due to high house rent, which included compromising on food and children’s educational expenses.
Tenants and homeowners alike prioritisedlocation over the cost of their apartment, with 58 percent choosing to live nearby their workplace(due to the plight of traffic in the city). In comparison, only nine percent said they considered the quality of their living quarters before choosing a place. Tenants with fixed incomes have little choice over their housing standards in Dhaka.