Meeting housing needs of common urban people
Sunday, 29 June 2008
A house for the family continues to be a dream of the non-affluent in the urban population. But in the urban areas, it is impossible for a family of modest means to consider buying a piece of land to build a house or to even pay the downpayment for a flat offered by real estate developers.
The Dhaka city presently has a population of about 13 million and nearly 80 per cent of them are probably semi-permanent residents of the city. But few among them are blessed with anything like their own homes. According to various assessments, these people have no choice but to spend from 40 to 60 per cent of their monthly income on rented dwellings . This factor alone shows up the great necessity of policies and their operationalisation to bring ownership of houses within the reach of the lower income segments of people in Dhaka city and other cities.
It was reported sometime ago about the possibility of getting external aid support in connection with studies on the housing situation and providing funds for a housing finance programme for the non affluent in the urban areas. It is not known to what extent the interest rates on loans taken from external sources, if the same materialises, are going to be lower but understandably the same will need to be nominal or something like one or two per cent at most to be of any help to the borrowers. The multilateral capital donors provide loans to the government for different purposes, including the building of infrastructures, carrying interest rates no higher than the proposed rates. Therefore, there is no reason why external support for housing finance cannot also be disbursed charging such nominal rates of interest.
Meanwhile, progress is very keenly desired in the government's pledged commitment to push down the rate of interest now being charged by the official housing building body, the House Building Finance Corporation (HBFC). HBFC loan-takers are many and most of them are only middle class people. They have been servicing their loans at interest rates as high as 15 or 16 per cent for years. The corporation is riddled with corruption and bureaucracy and in many cases the loan takers complain very bitterly that they do not get any service whatsoever in the proper calculation of their liabilities with the corporation.
The price of land in urban areas is a very big disincentive for the non-affluent in seeking to build their homes. Government will have to take up programmes to sell government-owned lands to the non-affluent people below the market prices for these segments of people to ever realistically hope to make their homes on such lands even if they otherwise get funds at bearable interest rates to finance construction of houses.
Amina Rahman
Azimpur
Dhaka
The Dhaka city presently has a population of about 13 million and nearly 80 per cent of them are probably semi-permanent residents of the city. But few among them are blessed with anything like their own homes. According to various assessments, these people have no choice but to spend from 40 to 60 per cent of their monthly income on rented dwellings . This factor alone shows up the great necessity of policies and their operationalisation to bring ownership of houses within the reach of the lower income segments of people in Dhaka city and other cities.
It was reported sometime ago about the possibility of getting external aid support in connection with studies on the housing situation and providing funds for a housing finance programme for the non affluent in the urban areas. It is not known to what extent the interest rates on loans taken from external sources, if the same materialises, are going to be lower but understandably the same will need to be nominal or something like one or two per cent at most to be of any help to the borrowers. The multilateral capital donors provide loans to the government for different purposes, including the building of infrastructures, carrying interest rates no higher than the proposed rates. Therefore, there is no reason why external support for housing finance cannot also be disbursed charging such nominal rates of interest.
Meanwhile, progress is very keenly desired in the government's pledged commitment to push down the rate of interest now being charged by the official housing building body, the House Building Finance Corporation (HBFC). HBFC loan-takers are many and most of them are only middle class people. They have been servicing their loans at interest rates as high as 15 or 16 per cent for years. The corporation is riddled with corruption and bureaucracy and in many cases the loan takers complain very bitterly that they do not get any service whatsoever in the proper calculation of their liabilities with the corporation.
The price of land in urban areas is a very big disincentive for the non-affluent in seeking to build their homes. Government will have to take up programmes to sell government-owned lands to the non-affluent people below the market prices for these segments of people to ever realistically hope to make their homes on such lands even if they otherwise get funds at bearable interest rates to finance construction of houses.
Amina Rahman
Azimpur
Dhaka