Urbanisation of Bangladesh: Challenges of housing & affordable living

Bangladesh urgently needs a long-term housing plan to support sustainable urbanisation, with an aim to protect arable land for food security, preserve water bodies, and safeguard forests to maintain environmental balance. The approach should consider the entire nation, not just megacities, and prioritise the preservation of agricultural land and environmental resources. Stakeholders in the real estate sector made these remarks at a roundtable discussion titled "Urbanisation of Bangladesh: Challenges of Housing and Affordable Living" in Dhaka. The event was jointly organised by IDLC Finance PLC and The Business Standard on 10 November. The programme was conducted by Sharier Khan, executive editor of The Business Standard.

Sharier Khan

Executive Editor, The Business Standard

In 1974, Bangladesh's urbanisation rate was around 9%. By 2001, it had risen to 23%, and in 2022, it reached 31.66%. So, we can assume it is around 33-34% now.

Most of this urbanisation has occurred in Dhaka. But Dhaka has never had a proper master plan. A Detailed Area Plan (DAP) was created two decades ago, but there are various controversies surrounding it. The current DAP includes some plans, but Dhaka is already overcrowded and unliveable, and it is still expanding.

The points raised emphasise the need for a long-term plan. This planning must consider the entire country, not just Dhaka and Chittagong. We need to envision what Bangladesh will look like in fifty or a hundred years.

Another critical point is that agricultural land must not be destroyed at any cost, as it is linked to food security. We must adopt vertical living solutions while protecting land. Similarly, we need to prioritise water bodies and other utilities.

Finally, behavioural intervention and a cultural shift are necessary, along with the development of commuter services and satellite towns.

Engr. Md. Shamsul Alam

Principal Structural Engineer, The Designers and Managers (TDM)

We know that the area of Bhola is 1.71 times the size of Singapore. If a large housing project were developed here, and if we started with a master plan centred around it, including a cadet college and a hospital, many people would move there. There would be a demand for housing in that area.

A city, Fatehpur Sikri, was abandoned due to a water shortage. We conducted a study on this, and the findings showed that even with a 150-foot tube well, it was impossible to extract any water.

There is something else. We know that our houses have a septic tank and a soak well. In reality, we discreetly release that water into surface water. Although Effluent Treatment Plants (ETPs) and related technology exist, they are rarely used.

And regarding Purbachal, why did we allocate three-katha plots there? If we had built structures like Singapore's SDB in Purbachal, 60% of the area would still be green today.

Syed Javed Noor

Additional Managing Director and Head of Business, IDLC Finance PLC

Many countries have established government-sponsored housing banks as intermediaries. India and the United States, for example, operate such banks. Housing companies develop properties funded by financiers, while customers purchase these at a fixed rate over an extended period.

Since a house typically lasts 50 years, recovering costs within 15 years is burdensome. Extending the repayment period to 50 years would ease this pressure. Government subsidies would further aid affordability. A housing bank of this nature should be established in Bangladesh.

Another issue is the high transaction cost—around 11–12%—associated with buying and selling houses. This discourages mobility. Reducing this to 0.2–0.5% would make it easier for people to relocate.

The current DAP has been criticised, but alternative approaches can be considered. For example, Hazaribagh, formerly home to many tanneries, was converted into multi-story apartments after relocation to Savar. Similar transformations could increase population density in underutilised zones like Tajmahal Road.

The transaction cost of property transfers must be minimised. Additionally, long-term investment financing should be introduced with government intervention, as the private sector alone cannot manage this.

Lastly, inefficient housing units should be redesigned. Converting these into efficient units will allow us to preserve green spaces.

Engr. Abdul Latif

Vice-President, REHAB

The last DAP was made in 2010. Unfortunately, even in this DAP, the FAR for flats was assigned. This means that any available space can be filled with buildings. However, this poses a challenge for agricultural land, which could jeopardise our food system. We must be cautious about this.

Additionally, DAPs are only valid for three years. If your house remains incomplete and the planning changes, what will happen to the city? While these DAPs are being revised, we still have time to address their many loopholes.

The current FAR allocation for valuable land in Dhaka is 2, which allows only four families to live on a 5-katha plot. Considering Bangladesh's population of 16 crore, how many houses will be needed? Agricultural land will be depleted further. What will we eat?

Therefore, we have no choice but to adopt vertical expansion.

We need to increase urban density rather than waste available land. The immense pressure on Dhaka must be decentralised, and connectivity improved.

MS. Rupali Chowdhury

Managing Director, Berger Paints Bangladesh Limited

Unplanned urbanisation is taking place in our country. Every city and habitat must grow in a planned manner, which includes hospitals, schools, government facilities, and employment opportunities.

For instance, Purbachal has 35,000 plots, but it is not being utilised due to the absence of educational institutions and hospitals. Purbachal is just a 30-minute drive from Dhaka and is a beautiful place. Why is it not being developed? Because there are no schools, colleges, or hospitals. The government needs to establish a transportation system.

Rajdhani Unnayan Kartripakkha (Rajuk) has great potential, but its capacity must be enhanced. Many problems arise due to the customisation involved in building houses and projects. These processes need to be digitised.

Ahmed Pasha

Director, Edison Real Estate

Urbanisation is inevitable and cannot be avoided. Our country is growing, and our GDP is increasing. The issue lies in its unplanned growth.

Eighty per cent of urbanisation is concentrated in Dhaka and Chattogram, with 60% in Dhaka and 20% in Chattogram. The remaining urbanisation is spread across other districts. Only 10% of the houses and flats in Dhaka are owned, while 90% are rented.

Those who own flats or land often possess multiple properties. When we build and sell flats, the same people return to purchase more, leaving little scope for new buyers.

A higher tax on multiple property ownership could change this structure. The government could introduce such a policy.

We aim to build affordable housing for low-income people, but how? Current DAP and Floor Area Ratio (FAR) regulations limit development. Seventy-five to 80% of land in Dhaka has an FAR below two, allowing for only three-storey buildings.

This can accommodate just 3-4 families, restricting available space. Where space exists, unit numbers cannot increase due to legal limitations. These regulations are poorly planned.

KM Zahid Uddin

Deputy Managing Director, Sales and Marketing (Cement) Bashundhara Group

A country develops when all its structures grow equally. However, our rural areas have not developed in this manner. Urbanisation challenges have already surfaced, with overcrowding in a few cities like megacity Dhaka and Chattogram.

We lack affordable housing in these cities. There is no clear-cut policy for housing here, which is why slums are rapidly expanding, increasing pressure on law and order.

To broaden housing, the government must take initiatives. One step could be planning for multi-storey buildings. If we can intensify the development of these buildings, we can rehabilitate underprivileged groups.

Ln. Sheikh Rabiul Haque

Managing Director, Tropical Homes Limited

We need to construct taller buildings within a specific limit in urban areas, which is more effective. This has been our argument for a long time.

I am building a 50-storey building in Malibagh. They will not permit me to construct anything taller. If Japan can have 200-storey buildings, why can I not have the same in Dhaka? In Japan, they create studio apartments and provide loans at a low-interest rate of 2-3% from the government.

Another concern is that we cannot afford to destroy even one katha of agricultural land. At one time, all the vegetables for Dhaka city came from Purbachal and Bolta. The produce from those areas was sufficient for Dhaka's population. But what did we do? In the name of urbanisation, we filled up the entire area. Now, everything has shifted to Purbachal.

But they could not make Purbachal habitable. It will not become livable even in the next 30 years.

Instead of destroying agricultural land, we should develop satellite cities in places like Gazipur, Manikganj, Narayanganj, and Bolta. Connect these areas with trains and flyovers so people can commute within 5-15 minutes. If these satellite cities are developed, urbanisation problems will be addressed.

Md. Nazmuchh Chhakib

Principal Architect and Managing Director, Shikor Architects

Cities attract people by offering various facilities, which explains the rapid urban migration. By 2050, 64% of the population in developing countries and 86% in developed countries will live in urban areas. Yet, cities occupy just 3% of the Earth's surface.

Currently, 3.49 billion people live in cities, and this figure is expected to reach 5 billion by 2030, accounting for 80% of the global population. This rapid urbanisation increases housing demand and significantly impacts the environment, particularly energy consumption. Without proper planning for energy needs, we risk severe crises.

Rayyan Hassan

Executive Director, NGO Forum (ADB)

The question arises: how can we include grassroots people who provide services, particularly in the case of affordable housing?

Bangladesh will never become a welfare state like European countries in terms of affordable housing. Our social protection policies are very weak. I think we need to pay serious attention to this issue. Social protection must be taken seriously.

We need to conduct several assessments. If Dhaka continues to urbanise in this way, vertical development is the solution. But can our WASA and DESA systems support this? We are already moving from gas lines to LPG.

The question is: what about the affordability of LPG, and how will we dispose of the canisters? What about waste management? There are proposals for waste-to-energy factories. Solutions are being proposed, but are they gradually addressing the problem, or are they merely ad hoc measures?

In the case of project financing, it involves an entirely different process. Financing doesn't occur uniformly. If the government undertakes a low-cost housing project and considers ADB financing, then ADB's environmental and social policies will directly apply to it.

Mohammad Imtiaz Uddin Chowdhury

Head of Sales and Marketing, BSRM

There is a lack of a centrally integrated collective effort. The way we are going, we are going to turn Bangladesh into a concrete jungle. If we grow vertically and do not waste agricultural land, we need government support along with policy.

The agricultural land we are wasting is hampering food security. Later, we will have to import food. And if we become import-dependent, it will put immense pressure on our economy and ultimately become a national security issue.

We are only talking about Dhaka and Chattogram cities. But this is happening in all district headquarters. Because in those district headquarters or divisional headquarters, some facilities are available.

Now, if we do not take such an integrated approach, if we can provide hospitals and schools of the same quality in divisional headquarters, then those who live in the very remote areas of the division, if they can come to the district or divisional headquarters within half an hour or an hour, they will want to stay in their area.

We need to demarcate agricultural land, land that cannot be used for building houses. Then we can prevent our rivers, canals, and ponds from being filled up and our beautiful cities from turning into unplanned concrete jungles.

It's not too late yet. But if we wait a little longer, I think it will be too late.

We all talk about affordable housing, and others talk about low-cost housing.