Assessing the Affordability Challenges of Rental Housing for the Middle-Income Group in Nayatola, Dhaka City

The rapid growth and development of Bangladesh often overshadow the country’s rapid, unplanned urbanization. This urbanization has led to an enormous population increase and a new middle class being injected into the urban economy each year. Migration to urban centers, like Dhaka, has been one of the biggest threats to the building of livable cities. In Dhaka, the growth of the housing market has been molded and compromised by the influx of migrants. According to a BRAC Institute of Governance and Development (BIGD) report (2017), 68% of the city’s residents live in rented properties, while 32% live in Dhaka’s own homes. The tenants of urban residential areas are suffering from accommodation problems, including affordability, and a lack of proper monitoring of tenant security and interest. Firstly, this study intends to measure the affordability of rental housing in Dhaka by using the rent-to-income ratio. Secondly, identify the problems that rental housing tenants face. Lastly, analyze the tenant’s legal security by examining the rental process, including rent fixation, revision periods, advance payment systems, changes to internal accessories, and eviction notices. The findings of the study suggest that the current rent rates are putting a financial housing cost burden on the middle-income families of the city. They tend to spend more than 30% of their monthly income on rent and have to compromise on other daily expenditures, such as food, household items, and children’s education. Although the Premises Rent Control Act 1991 aims to balance the interests of house owners and tenants by establishing a set of justified rules, the interests of tenants are significantly underprotected due to inadequate implementation. Given the gap between housing supply and demand in Dhaka, landlords have the opportunity to increase the cost of their rental units, frequently violating the provisions of the act. This severely affects the middle-income households that live on fixed incomes.