Investment in affordable housing key to achieving SDGs

Bangladesh is unlikely to achieve the SDGs by 2030 leaving no one behind (LNOB) agenda if people are rendered homeless.

Both public and private sector must work actively to ensure affordable housing for both low and middle income groups.

Now, the tenants have to spend one-third of their monthly income as house rent in the city. The current high inflation caused by Covid-19 pandemic and Russia-Ukraine battle has made people’s housing more uncertain.

Experts suggested that the government should develop a policy prioritising the housing sector to ensure housing for all as Bangladesh is lagging behind in housing policy compared to many countries.

They also recommended formulating the vision for green and resilient affordable housing, setting up of a shelter fund to support private sector developers and improve public land management to ensure affordable housing.

80% people in cities live in rented houses

According to an IFC study conducted before the Covid-19 pandemic, currently, there is a demand for 6 million houses which may go up to 10.5 million by 2030.

The latest study also shows that the annual demand is 31,500 houses. Of them, 17,000 are provided by the private sector.

Presently 3.5 million houses are required that involves about Tk4.9 trillion.

The study says around 80 percent of people living in Bangladesh’s cities live in rented properties throughout their lives, basically because most of them can’t have access to affordable mortgage finance.

Bangladesh’s cities are growing rapidly and housing is in short supply to make matters even more difficult and its urban population has grown from 31 million in 2000 to 65 million in 2020 over the last two decades.

However, the IFC investment consists of a subscription of up to $50 million for maximum five-years. Privately placed bond will be issued by BRAC Bank to support the Bank’s housing finance programme.

Utilising fallow land

Experts suggested utilizing khas land for low-cost housing projects for the sake of lower income people.

PRI’s Executive Director Dr Ahsan H Mansur said the banks authorities can use green bond mechanisms to increase funds.

Hence, a target on the affordable housing market with new products, green mortgages and green developer financing can be launched.

There is huge potential of housing sector in Bangladesh. A roadmap is very much required here now.

Millions of people can be employed if the government works cordially here. So, policy must be reformed, the economist also suggested.

Mansur claimed that the government had taken a project in Purbachal area but there is no development.

People purchase land/plots and sell them to others. So, price of the property increased rapidly. Infrastructure development in projects is very crucial, he explained.

Talking to The Business Post, the CEO of Building Technology Ideas (BTI), Asif Iqbal said there are various challenges to develop affordable housing, including access to land, regulations and constructions costs.

The government must prioritise housing sector to provide homes to all. Long-term home loans should be provided on easy terms and conditions.

The CEO said, “We took two projects –ShapnaBilas in Savar and Chhayabithi in Uttar Khan - for affordable housing without profit.”

The flat size of ShapnaBilas is 783-13,00sqft and price rate is fixed between Tk35, 00-Tk42, 00 per sqft. Over 50 per cent of flats have been handed over.

“Now we sell the flats at Tk35-37 lakh. Developers can hand over each flat at Tk20 lakh-25 lakh if the government provides adequate supports like land allocation and long-time loan facility.

The government should adopt a proper roadmap soon to ensure affordable housing for all to achieve SDGs by 2030, he also stated.

The current hiked construction materials created a big trouble for realtors. And, availability of land is another problem. Urban areas should be developed soon so that developers are encouraged to invest there, Asif added.

Public-private effort needs for affordable flat construction

Now, due to global supply chain disruptions, the cost of construction material is rapidly increasing. This will also further increase the cost of housing. The financial gap of Tk4.8 Trillion is quite conservative based on the current situation, -Ayesha Baig, Senior Operations Officer of IFC, said.

Real Estate and Housing Association of Bangladesh (REHAB) President Alamgir Shamsul Alamin said the government should set aside funds to ensure affordable housing for low-income groups and also allocate land to developers to facilitate the construction of flats.