Housing solutions for the urban poor in Bangladesh


Low-income communities are struggling to find affordable urban housing in Bangladesh’s cities. Millions are heading to cities to tap into economic opportunities, causing booming urban growth. But many of them are facing skyrocketing property prices, a dysfunctional rental market, and limited public housing. Local authorities are falling behind on delivering affordable housing schemes. The outcome: low-income communities pay exorbitant rents to live in slums with poor services and no tenure security.

Take Dhaka, the world’s most crowded city. Over 17.4 million people reside in Dhaka and more are moving in. At least one in every three people live in informal settlements. The situation is rooted in a fragmented housing delivery system: the government meets only 7 percent of the annual housing demand and relies heavily on the private sector to fill in the giant gap.

Formal private housing supply is also limited, forcing low- and middle-income families to resort to costly informal arrangements. According to a 2017 study by Bangladesh University, on average, slum residents pay BDT 47 per square foot; this is twice the amount tenants pay for decent housing in areas such as Dhanmondi.


Bangladesh has been putting needed policies in place. For example, national development plans such as the Government’s 7th Five-Year-Plan (FY 2016-2020) emphasize affordable urban housing. Moreover, the Government has approved the ‘National Housing Policy 2017’ to address the fragmented policy response to housing challenges.

Despite progress on the policy front, the housing delivery system remains highly uncoordinated as public and private developers tend to work in silos. Moreover, in urban projects, private developers focus on upper- and upper-middle-income groups and public land allotments for the poor are negligible. RAJUK has reserved only 1.2%, 4.3% and 7.5% of land for low-income groups in the Purbachal, Uttara (3rd Phase) and Jhilmeel projects respectively. Complicated land and titling procedures, registration procedures and costs make accessing these allotments even more difficult.

Additionally, housing finance is limited, short-term and expensive given the absence of a well-functioning mortgage market. The market is small despite demand for low- and middle-income housing finance and it caters to affluent groups only. Also, state-owned finance providers often lack fund for their schemes in urban areas. Factors like these are feeding into challenges for developing affordable housing for low-income urban communities.

Some of these issues become more apparent when well-intentioned efforts backfire. Bhashantek Rehabilitation Project is such an example. In 1998, the Government undertook the BDT 341 crore project in Mirpur, Dhaka to build 7,560 flats for slum residents and low-income groups.

The Government fixed flat prices at rates that families could pay off in 10 years in monthly installments. Yet, the project got mired in irregularities and mismanagement. The private developer that won the construction contract sold of a section of the flats at higher prices to an affluent group. The Government eventually scrapped the costly project.

World Bank estimates that Bangladesh will need to build at least 8.5 million new houses in the next five years to overcome the existing shortage in urban areas. Most of the demand is expected to come from lower and lower-middle income groups. Given Bangladesh’s commitments to provide housing for all by 2021, how can Bangladesh overcome these challenges for providing affordable housing in urban areas to the poor?


The housing delivery system in Bangladesh consists of 1) Public Housing 2) Autonomous Bodies 3) Cooperative Housing 4) Private Formal Housing 5) Formal Individual Housing 6) Private Informal Housing 7) Slums 8) Squatter Settlements 9) Informal Accommodation in Non-Residential Spaces and 10) Homeless or Pavement Dwellers.

Public and private sector institutions conducting housing functions include: a) Ministry of Housing and Public Works (MoHPW) b) National Housing Authority (NHA) c) House Building Research Institute (HBRI) d) Real Estate & Housing Association of Bangladesh (REHAB) and e) House Building Finance Corporation (HBFC). In addition to HBFC, commercial banks and financial institutions provide housing loans to individuals and development companies.


Despite the dismal situation, Bangladesh’s NGOs, universities and development partners are successfully testing small-scale and low-cost urban housing schemes. Take ARBAN, one of the first NGOs to pilot a low-income, urban housing project in Bangladesh.

By tapping into its micro-credit savings deposits and loan assistance, ARBAN built an apartment complex for 42-member households in Mirpur, Dhaka. The apartments were handed over in 2012. Building on success, ARBAN is taking on another housing project to construct apartments for 85 households on a 1 bigha plot at the city’s Rampura Banasree area.

In Jhenaidah, BRAC University collaborated with the Municipality, architects and a local NGO to build affordable homes through the ‘Jhenaidah Citywide Housing Process’. Through this community-led initiative, people identified their housing challenges, mapped out what they wanted to see in their neighborhoods and helped in the construction process.

The initiative was financed by using seed funding and by setting up saving groups in the community. Women in the community took leadership throughout the initiative.

Partnership and Community-Driven Cooperation Approach: The Gopalganj Model

From 2008 to 2015, the Government of Bangladesh, UNDP and DFID ran the flagship initiative, “Urban Partnerships for Poverty Reduction (UPPR)’’ project, to meet the needs of marginalized and poor urban communities. In 2009, with UPPR’s support, Gopalganj municipality undertook a housing programme through which the municipality collaborated with the private sector and community to offer tenure security to 346 evicted families.

The families, alongside stakeholders, identified vacant government land in the Pourashava for resettling them. In 2010, following negotiations, the Ministry of Land allocated 4.16 acres on a 99-year lease to the Gopalganj Pourashava.

The urban poor communities, in collaboration with the Pourashava and with the technical assistance of UPPR and other partners, developed low-cost housing model through rigorous consultative and participatory processes.

The development of Community Housing Development Fund (CHDF) was one of UPPR’s key outcomes; this is city/town-level community based specialized institution that supports tenure security and addresses housing finance challenges of the poor. For example, as noted in the Gopalganj, the CHDF was instrumental in negotiating the long-term lease on government land for 99 years with support from the local government institution. CHDF provides loans to target households at 10-12% interest rates and with a payback period of 5-7 years. CHDFs in Gopalganj, Sirajganj, Rajshahi, and Chittagong have already invested BDT 90 million and supported 300 households in their communities.

Ashekur Rahman is working with UNDP Bangladeshas Urban Development Specialist. Views expressed in this article are the authors own and does not necessarily reflect the opinion of UNDP.