House rent swallows major chunk of income

Exorbitant house rent is the foremost reason for increased living costs in the capital as most of the dwellers have to pay the largest part of their monthly income for housing, a recent study has found.

As a result, they are left with no other alternative but to reduce expenditure on essentials like food, clothing, education and entertainment in order to cope with the costs, added the study.

It found that 82 percent tenants in the city pay more than one-third of their monthly income for house rent and utility bills, exceeding the standard affordable limit.

Of them, 44 percent have to pay almost half of their income, it said, adding that the costs should not cross 30 percent of the income as per the standard affordable limit worldwide.

Brac Institute of Governance and Development (BIGD) of Brac University conducted the study on 400 households in Mirpur, Rampura, Badda and old town in between April and October.

The findings were revealed at a press conference yesterday at Brac Centre. The study was conducted in order to find out the housing situation of middle and low-income people.

The study found that 85 percent tenants do not receive any signed receipt in printed-paper for paying rent that creates scope for the landlords to evade tax.

Besides, city houses are highly vulnerable to fire incident and earthquake as 95 percent of the surveyed houses have no fire escape and 71 percent have no open space, it said.

In addition, more than 99 percent tenants did not attend any fire drill as the authorities concerned did not organise any such drill in the last two years.

Also, 68 percent tenants are not capable of buying a house in the city due to high price of apartments and land.

Besides, 58 percent households do not have any savings to buy apartments. Many of them are not interested to take bank loans for purchasing a house due to high interest rates, short-term repayment periods and complex eligibility criteria.

To overcome the situation, the study recommended that the government increase monitoring on the housing sector, especially in terms of fixing and collecting rents, and setting up apartment price.

It also recommended paying rents through banks, renting through a formal agreement, creating ward-level field controllers to handle tenancy-related issues, bringing all formal and informal developers under the monitoring of Rajuk, and easing home loan conditions and interest rates.

Speaking at the conference, lead researcher Syeda Salina Aziz said, “We see two types of development in Dhaka. One side is highly developed while the other is lagging behind.”

The government should work on reducing the discrimination, and provide the middle and low-income people with affordable housing facility, she said.

If the dwellers can own a house, a sense of ownership will grow among them, said Salina, a senior research associate of BIGD.

Sultan Hafeez Rahman, executive director of BIGD, said the city is growing gradually and it is getting congested day by day due to the heavy load of people.

The government should increase rapid transit between Dhaka and surrounding cities for reducing the load, he said.

Mohammad Sirajul Islam, another senior research associate of BIGD; and Shanawez Hossain, a BIGD research fellow, also spoke.