Housing Affordability of Ready-made Garment Workers in the Dhaka Metropolitan Area

Abstract

Generally, it is assumed that the poor in cities cannot afford to own a house. Thus, real estate developers hardly consider them as potential buyers. Despite the fact that the government has framed favourable policies towards housing the poor, the poor cannot own houses due to the inadequacy of institutional supports. This study examines the affordability of owned or rental accommodation for the poor, taking ready-made garment (RMG) workers in Dhaka as a case in point. Data from across 138 households have been gathered for this study. The study shows that if the rent increases further than the minimum standard for a dwelling unit, then about half of the RMG households become unable to afford their rental houses. An analysis of home ownership shows that only 28 per cent of families can buy a house of 300 sq. ft. on the basis of existing loan structures, and only if the loan covers the total property value, particularly at the periphery of the city area. If the loan structure for housing finance is changed by lowering the interest rate and increasing the loan repayment period, then more workers would be able to afford to own a small house of moderate standard.