Provide low-cost housing for the poor: analysts

The government should take serious steps in solving the housing crisis confronting the lower income groups in Dhaka as very little has been done to provide decent accommodation for the poor, analysts said yesterday.

“It is a matter of regret that the government has not allocated a single piece of land to the poor although the rich have gotten land through housing projects in areas such as Dhanmondi, Gulshan, Uttara, and the latest in Purbachal,” said Ahsan H Mansur, executive director of the Policy Research Institute.

Urbanisation in Bangladesh is unstoppable but there is a lack of attention to it on the government's part, he said. There is no central authority and no ministry for it.

“We really need to soul-search about it. It is the role of the government to provide decent housing,” he said, while speaking at a roundtable on “Sustainable Living for a Better Tomorrow”, held at The Daily Star Centre.

Bangladesh University and The Daily Star jointly organised the event.

Dhaka is home to 1.5 crore people, which is 10 percent of the total population of Bangladesh, and generates 35 percent of the country's gross domestic product, according to Urban Lab, a research wing of Bangladesh University.

While moderating the event, Mohammed Farashuddin, former Bangladesh Bank governor, said low-cost housing projects are the symbol of a welfare state.

He said the factory owners and the country overall would be benefitted more if the productivity of the working class goes up.

SK Sur Chowdhury, deputy BB governor, however said the government has long been providing low-cost funds for housing; the central bank is managing the fund.

In 1998, the government started the housing project with Tk 160 crore and disbursed loans amounting to Tk 222.48 crore up to 2006. The current size of the housing fund is Tk 358.97 crore.

A total of 65,436 houses have been built so far with the money from the housing fund, according to Chowdhury. The number of beneficiaries is 327,180. He went on to invite the garment factory owners to come to the BB with the necessary documents and use the fund at 1.5 percent interest rate.

Recently, the central bank held a meeting with officials from the World Bank who also assured them of support in case of low-cost housing, Chowdhury added.

Rubana Huq, managing director of Mohammadi Group, a leading garment maker, said she has been planning to build low-cost housing for workers for many years and finally the BB responded to her call.

The entrepreneur is very close to implementing her dream: Mohammadi Group is constructing a housing project in Gazipur where 1,200 of its employees and workers will have inexpensive accommodation from 2019.

The workers would be the owners of the apartments after staying for nine years by paying rent, Huq said.

“If we don't invest in workers, we will not have sustainable business.”

Citing the different survey results, Huq said currently, the garment workers take small amounts of loans from different private banks at nearly 25 percent interest rate. In future, Mohammadi Group will give them loans at 8-9 percent rate.

Mahmud Hasan Khan, vice-president of the Bangladesh Garment Manufacturers and Exporters Association, said currently there are 3,200 active members of the BGMEA.

Of them, more than 300 factory owners have the capability to build low-cost housing for their workers with their own costs.

The owners will probably build such housing for their workers in the near future, but it would not be wise to compel them to construct housing for the workers, he said.

The government should facilitate the owners with policies and finance so that the owners feel encouraged to build low-cost housing for the workers, he said.

Apart from the government, Khan also sought cooperation from the housing companies in building low-cost housing for garment workers.

Abdul Momen, a professor of the Institute of Business Administration at the University of Dhaka, said it might not be possible to build low-cost housing projects in all parts of Dhaka due to higher land prices.

He called for conducting a national survey of land usage for obtaining the real areas of land and for future assessment.

Binayak Sen, research director of the Bangladesh Institute of Development Studies, said access to finance for the poor workers is inequitably distributed. As a result, the question remains whether they would get financing.

He said industries are relocating from Dhaka as land price is skyrocketing. So, the transport facility should also be linked with the low-cost housing so that the workers can commute easily to their factories.

The low-cost housing should be made available not only for garment workers but also for workers of other sectors, he said.

Sen questioned why the workers will only pay the rent of low-cost housing from their wages. It would be easy for the workers to pay the loan if a certain percentage of profit of the companies is shared with them, he said.

Khan of the BGMEA said factory owners have started depositing 0.03 percent of their exports to the workers' welfare fund managed by the government. The fund collected Tk 80 crore in its first year, which started in July.

“We can use the fund for different welfare purposes of the workers,” Khan added.

Mahfuz Anam, editor and publisher of The Daily Star, said the housing sector is facing a crisis in many ways. Low-cost housing has been practically unaddressed in Dhaka, he said.

Akter Mahmud, general secretary of the Bangladesh Institute of Planners, said low-cost housing offers huge growth opportunity for real estate, which has slowed down.

Liakat Ali Bhuiyan, first vice-president of the Real Estate & Housing Association of Bangladesh, said the BGMEA, the REHAB and the government would have to work together to provide decent housing to workers.

Babul Akhter, president of the Bangladesh Garment Industrial Workers Front, said housing projects like that of Mohammadi Group should be replicated in many other areas, as a significant portion of the workers' wages goes towards house rent.

Khaled Ashraf, director for architecture at Bengal Group, said the housing policy requires major revision, as most resources have been directed to the upper-class instead of the lower middle- and middle-income groups, who need it the most. 

Ashraf Uddin Chowdhury, dean of Bangladesh University's faculty of business and economics, said workers have to be provided a healthy environment so that they are free from diseases and seasonal ailments.

Golam Rahman, acting vice-chancellor of Bangladesh University, also spoke.