None would disagree with the proposition to declare the housing a 'thrust' sector so that it eventually turns into an engine of growth. The suggestion, however, is not centred on the traditional housing that mainly caters for the rich and middle-class. It lays particular emphasis on meeting the housing needs of low-income people.
Scores of housing units have sprung up in recent years. As a sector, housing, also popularly known as real estate, contributes to the gross domestic product (GDP). It has also helped the growth of several supporting industries, including cement, steel, paints, ceramics and sanitary wares. The housing sector has expanded, focusing mainly on the needs of upper and middle-class people who have easy access to formal financing. So, the growth has been skewed. It has always ignored the housing needs of millions of low-income people.
The state has limited involvement in the country's housing sector. It spends funds mainly on meeting the needs of the government employees. Under the much-hyped 'Asrayan' project, many poor rural families have got small houses. But, in urban areas, the government neither has enough land nor resources to embark upon large-scale housing projects in urban centres, including Dhaka.
The middle class has been the driving force behind the growth of urban housing in recent years. Bank financing had been expensive even four to five years back. Now, it is more or less affordable for home-buyers. But the problems lie with land price and the cost of building materials. The prices of the same have been rising without a pause.
Low-income people do not dare dream of owning a house in most urban centres. The constitution guarantees some basic needs. Housing is one. Citizens, however, do not have access to everything that the constitution guarantees. Yet, with proper planning and due seriousness, the government may make progress in this direction.
Land remains a scarce resource in Bangladesh. The scarcity is more in urban centres, particularly in Dhaka. Any housing programme for the poor and low-income people, thus, needs to be suburban-centric and vertical. The government, as suggested by some speakers at the latest PRI-IFC dialogue, may replicate the successful housing programme for poor and low-income people in other countries. The IFC may also extend their cooperation to this effect.
As far as the IFC estimates are concerned, the Bangladesh housing sector offers tremendous growth potential. The current financing gap in the housing sector is estimated at $16 billion. There will be an investment opportunity worth $200 billion by 2030. Such an enormous investment in the housing sector would spur an unprecedented momentum on the economic front.
But neither the government nor the private sector alone can afford such a massive investment. The private-public participation (PPP) model might work well here. Under such an arrangement, the government might provide land and the private sector funds for building houses at an affordable cost. On top of everything, the government will have to create an enabling environment and select the right private partners.
