Key Factors of Affordability in Bangladesh and Dhaka City Housing Problem in Bangladesh Analysis of Housing in Dhaka Housing and Urbanization Bangladesh Housing Architecture in Bangladesh Real Estate Business Housing Developers

1. AFFORDABILITY
HOUSING AND URBANIZATION
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Name: Tafshirul Alam Mahi
Roll: 12190101
Department of Architecture.
World University of Bangladesh.

2. What is Affordability?
The Measurement of Affordability
1. Ratio Measurement.
2. Quality Adjusted Measurement.
3. Shelter Poverty Measurement.
4. Residual Income Measurement.
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Affordability in Housing Means the relationship between household incomes and
housing prices and Rents.
The concept of affordability brings together the following three factors:
1. the quality of housing available.
2. the price of housing.
3. the income of families seeking to buy or rent housing.
DEFINATION: “Affordability” is the measure of housing needs and family well-
being with the available resources of the household to provide for these needs (Stone,
1993).
Ratio Measurement: Housing affordability means the percentage of the income spent
on housing. Unaffordable housing can be defined if the ratio of housing rent is income
exceeds a certain ratio. Affordability should not be exceeds 30% of total income.
This can be varies in different circumstance. Many prefer to live in larger or higher
unity by paying more, this can be named as unaffordable by ratio measurement. The
real crisis of household not accounted by ratio measurement.

3. 3
Key Factors
1. Rent
2. Income
3. Housing Expenditure
4. Threshold limit
Rent: Price-Rent ratios are difficult to measure accurately. Rent plays an important
role in affordability. Rent should be at low for ensuring affordability. In our
country house rent is to be minimize. Rent is directly connected with affordability.
Rent of house is to be less than other housing expenditure. If the rent is high than the
income is to be also very high. Renting luxury apartment also rare for middle income.
Income: Income is directly connected with affordability, if the total income is ‘x’
then the 30% of this income can be marked as affordable in housing. Low income
households spending a high proportion of their income on housing may face
conditions of housing stress. Many – even low income households - choose to spend a
high percentage, but there is still evidence in England that low income households
with high housing expenditure ratios are more likely to face stress than those on high
incomes. In Bangladesh 30% - 40% of gross income spend on housing.
Housing Expenditure: Expenditure on housing includes for home-owners debt
service concerning loans for the acquisition of the main residence, real estate taxes on
the main residence and utilities. For renters, it includes rents and utilities. For
everyone, it includes housing taxes as well and expenses for water and energy.
Monthly average household expenditure increased to Tk 31,500 in 2022, up 100
per cent from Tk 15,715 in 2016. It was Tk 11,200 in 2010, said the national statistical
agency as it released the key findings of the "Household Income and Expenditure
Survey 2022".

4. 4
Threshold Limits: The income threshold is the maximum amount of money a
household can receive and remain eligible for social housing. The Policy determines
that this threshold should represent household need. ‘Need’ is calculated as the
household’s supplementary benefit requirement rate, plus housing costs.
Advantage:
1. Easy to calculate and understand.
2. Easy for implementation as policy guideline.
3. The advantage of ratio measurement is its simplicity in policy implication.
Inadequacies:
1. Not included the opportunity cost.
2. Little information about the financial burden of tenants.
3. The non-housing expenditures of tenants are ignored.
4. The quality and size of the housing unit is also ignored.
So, The ratio measurement directly depends on Housing expenditure and household
income are the main concerns of the ratio measurement technique.

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