Real Estate in Dhaka City

Thursday, November 23, 2006

Real Estate Sector of Bangladesh




Real Estate, Housing & Construction Industry in Bangladesh in 2001 & Beyond: Scope and Prospects

Md. Saidur Rahman Milan
http://srmilan.tripod.com


The Real Estate and Construction Industry plays an important role for sustainable development of a country. In Bangladesh many construction projects are undertaken under development programs. The construction industry is an important sector for physical and economic development of the country. It provides physical expansion and economic development. This sector is well linked with human settlements, employment and environment. In case of Bangladesh it is not actively patronized by the policies of the government. As a result, this sector could not grow under a systematic environment. This paper makes a case study of construction industry of Bangladesh with special emphasis on Real Estate & Housing sector. The paper discusses the pros and cons of the project activities and its various implementation stages. It narrates the experiences and recommends more appropriate realistic strategies, which are both applicable in local and national levels of Bangladesh.


Introduction

Being one of the most densely populated countries of the world with a huge population, Bangladesh has already surrendered nearly 25% of its land to human settlements and related uses. With the current 30 million urban population, the share of urban land is about 2 percent of all lands and nearly 10 percent of land under settlements.

Urbanization helps saving land for settlements. This is because of the possibility of higher density. As of today 30 million urban population are squeezed on about 3370 square kilometers (1300 square miles) of land in the country giving a gross density of 8870 persons per square kilometer (23000 persons per square mile) as opposed to about 700 persons per square kilometer (1800 persons per square mile) in rural areas. Thus the urban density is more than 12 times that of the rural density. But urban population will be more than double in the next 20 years and the trend would continue. By the year 2040 Bangladesh would possibly have half of its population (of 200 million or so) in urban areas that would amount to 100 million people in urban areas.

Due to various factors, including absence of an urbanization policy or a human settlement policy, urban growth and urban development in Bangladesh is basically Dhaka oriented. Already 30% of the urban population of the country are concentrated in Dhaka Megacity region. The trend is continuing or becoming more entrenched.

As Dhaka is the Nucleus City of Bangladesh and the focal point of all social, political and economic activities, the current housing situation of Dhaka City is mainly outlined in this paper. The problems and prospects of housing are also discussed in the light of the experiences of some other major cities of the world. The present and future trend of housing development is also discussed with special reference to high land value in Dhaka City.

In future there would obviously be a need for higher density of population in both rural and urban areas, more so in urban areas. Density can be increased both horizontally (by more compact arrangement) or vertically through multi-storied development.

There is no magical solution to the present or future housing problem of Dhaka City. Different sets of policies need to be implemented both at the national as well as the local levels. Nevertheless in the light of the prevailing high growth rate in population as well as increasing value of land in Dhaka city, it can be easily argued that apartment development should be encouraged in the coming years. Both walk-up as well as high rise developments should be encouraged. Hence the future residents of Dhaka should adapt themselves to apartment living by being more accommodative and tolerant. All of us would prefer to live in a private home with a front lawn and /or a back garden, but since urban land is scarce and expensive, solutions with high rise development need to be considered in a rapid developing city like Dhaka.

Interaction of Urbanization with Population Growth

High population growth and rural-urban migration intensify the problems of urbanization in Bangladesh, as in all developing countries. For Bangladesh the problem is further aggravated by limited land supply in urban areas, lower land utilization and lack of proper policy and planning of land-use. The ever growing urban population is creating an increasing demand for space. This rapid influx of population to the (capital) city results in sky rocketing land prices and provides some stimulus to construction of tall buildings.

During the last four decades, metropolitan Dhaka has recorded a phenomenal growth in terms of population and area. Dhaka at present is one of the fastest growing metropolises in the world. After the war of independence of 1971, Dhaka’s provincial capital status was raised to national capital overnight and its population increased manifold in the subsequent decades. The land area and population of Dhaka is usually expressed in terms of two boundaries. One is Dhaka City Corporation (DCC) boundary and the other one is the larger boundary of Rajdhani Unnayan Kartripakkhya (RAJUK). Within DCC limits (with about 520 square kilometer i.e. 200 square mile), there are already over 7 million people and growing possibly at 5.5 percent annually. Gross density is 11,570-13,500 persons per square kilometer (30,000-35,000 persons per square mile). In some parts density of over 38,580 persons per square kilometer (100,000 persons per square mile) exist, with an average of 3 stories for pucca development or one story for kutcha development. But at such high densities, we do not get enough road space or open space or other non-residential space either. Outside DCC, but within RAJUK limits, there are 1008 square kilometers (about 390 square miles), wherein live another 2 to 3 million people. Densities in such areas vary from very high to very low. In fact much of the RAJUK areas, beyond DCC, are not ready for proper urban development yet. There are low lands, liable to annual floods, and to deep flooding during abnormal floods. But urban expansion takes place even in such marginal lands through gradual earth filling.

Figures 1 and 2 show, respectively, the population and area of Dhaka City between 1951-2001. At present the Dhaka metropolitan area consists of the inner city which is almost built up and surrounding areas which are semi-built up. During the period from 1981 to 2000, the greater Dhaka population grew at an average rate of 5.5% from about 3.44 million to 10.0 million. During the same period the built up area increased from 104 sq. km (39% of the city area) to 150 sq. km. (55%). By the year 2015 the expected population of the city is forecasted to be as high as 15.7 million. It is expected that Dhaka will become one of the ten largest cities of the world by the year 2020 with a population as high as 20 million and to make provision for accommodation and comfortable living of this large population, creation of new satellite towns adjacent to the city and also new towns around the cosmopolitan city will be necessary. For this purpose, the area of Gazipur, Kaliakoir, Savar, Tongi, Narayanganj and Keraniganj across the river Buriganga and Purbachal i.e. Yusufgonj under Rupgonj thana of Narayongonj district in between the rivers Balu and Shitalakhya will be taken into consideration. Figure 3 shows the possible urbanized area of Dhaka in 2020.

Figure 1: Population of Dhaka City: 1951-2020
Source: Bangladesh Bureau of Statistics

The additional population in the coming decade will add new dimensions to the urban fabric of metropolitan Dhaka. The main reasons for the huge anticipated increase of Dhaka population in the coming decade is due to unbalanced urbanization and presence of primacy in the city size distribution pattern. Compared to other developed and developing countries. It is evident that, although the overall extent of urbanization in Bangladesh is not much, the average growth rate in the major cities is very high.

Figure 2: Area of Dhaka City: 1951-2020
Source: 1. RAJUK (Assuming constant area of 1528 sq. km. From 2001-2020)
2. Bangladesh Bureau of Statistics
3. DMDP


Housing in Dhaka City

Housing conditions of Dhaka City vary greatly between high and low-income groups as well as by area. The gap is obvious between luxurious high income apartments/houses which exist in high-income areas such as Gulshan, Baridhara, Dhanmandi, Uttara areas and poorly constructed temporary housing (Jhupri) with extremely small floor space, very densely located on the lands prone to flood disasters. About 30% of the slum dwellers live in Jhupri, 24% in Chhai, 13% in Tong, 30% in Tin-shed, 2.5% in Semi-pucca and 0.5% in Pucca type of structure. Housing requirements in Dhaka is 218,000 units including dissolution of backlog until 2001 and replacement, wherein the requirements of urban poor is 140,000 units, which share almost two-thirds of the total requirements. In terms of tenure, 54% of the households are on private rental basis while 31% are owned. Only 1.2% is on social housing.

It can be pointed out that people from all socio-economic backgrounds in Dhaka are facing housing problem of one type or another. While the urban destitute need rehabilitation, the slum dwellers need slum upgrading. The low-income families are in need of low cost flats or plots and the middle and upper income families are complaining that the cost of a decent plot or a decent flat is going beyond their means. The solution to the problems of these different groups is also different and mainly lies in the hand of the policy makers and the government.

In recent years there has been a new trend of housing development mainly in the private sector. A new type of residential development has come on the scene, which can be broadly termed as apartment development. In most of the cases an individual or a company constructs one or more buildings comprising of several apartments, which are later sold to individual purchasers. This has prompted many individual entrepreneurs to develop apartment buildings resulting in an increased number of real estate companies in the city. There has been considerable criticism regarding apartment development as well as real estate development in Dhaka City in recent years. While many of these criticisms are valid, others are distorted based on misconceptions and/or inaccurate information.

Housing Access and Affordability

The rapid growth of city population has led to a phenomenal increase in housing demand in the city. The housing market of the city consists of five tenure groups – owner occupied, private rental, rent free, squatters and slums. Physically, housing has extended from makeshift arrangement and permanent houses. Dhaka City has a very high proportion of poor population (65%) and as such affordability of housing is significantly affected by the income distribution. The access of poor to housing is constrained by high land and material prices. In one study (DMDP, 1995), it has been observed that the first quintile of city household has zero affordability to housing; the second quintile can afford Tk. 140 to Tk. 300 per month; the third quintile can afford Tk. 300-400 per month; the fourth quintile of household can afford Tk. 480 to Tk. 600 per month and the fifth quintile of household can afford Tk. 1000-2500 per month. Only 3.85% of household can afford above Tk. 2500. The affordability indices of Dhaka City imply that the govt. has to play the role of both provider and facilitator/enabler for different income groups.


Apartment/Real Estate Development in Dhaka City

Three decades back the city dwellers were reluctant to live in flats while ten years back some one would have thought twice before buying an apartment/flat. But in the last couple of years people have shown an increased interest in owning apartments. As mentioned earlier the main reason is economic due to increased land cost as well as construction cost. There are also other reasons such as reluctance of individuals to spend time and energy in house construction, increased awareness of apartment living, and western influence. As a result apartment-owning is becoming increasingly popular. Moreover the absentee i.e. the wage earners in Middle East and other countries are also a major contributing factor towards the increasing demand for apartments. As a result of increased demand, many apartment builders have appeared in the market in recent years. Twenty years ago there were fewer than five companies in Bangladesh engaged in developing apartments while today there are more than 200 developers. It may be mentioned here that in 1988 there were less than 20 such developers in Dhaka. At present there are 80 such developers working in Dhaka City who are members of REHB. But there are many other companies/individuals engaged in such development in smaller scale and selling apartments to friends and relatives only.


Construction and Development Process

The contribution of construction industry in the Gross Domestic Product (GDP) is significant. Over the last 15 year the Real Estate Development sector has made significant contributions to many sectors of our economy. Since 1985 this sector has created homes for over 12000 families in the metropolitan city. Additionally, thousands of acres of land have been developed into housing estates where lower middle and middle-income families can construct their own dwellings.

The fact that many cement manufacturing industries have now been set up in Bangladesh is a reflection of the impetus the Real Estate Development sector has given to our economy. In the last decade many steel mills would have shut down had it not been due to the support of the Real Estate Development sector. Several new mechanized construction material manufacturing industries have recently come up due to the existence of this sector. Today about 200 architects and consulting engineers are directly supported by this sector; over 500 graduate engineers are holding management positions in this sector and almost 2500 diploma engineers are engaged by this sector.

The construction sector is directly linked with employment. There are both formal and informal building firms, who undertake works. In the period 1985-90, this sector contributed more than 5.55% in GDP. It is estimated that about 1.77 million man/ year in 1994/95 (according to Fourth Five year plan) were engaged in this sector. A large number of companies/firms in Dhaka are engaged in construction activities.

Contribution of construction industry may be summarized as:
· Construction industry generates huge formal and informal sector employment. This fact needs to be remembered more generally while policy making.
· Income redistribution through employment generation, skill upgrading, favorable financing for low-income housing, capital spending for large-scale civil engineering works, all contribute to redistribution of national products downwards (social justice component).
· On-the-job skill acquisition frequently leads to further specialization, both in the construction sector and in serving other industrial sectors. Skill generation is thus possible by construction industry.
· The low-income population, after the provision of shelter and civil infrastructure, feel morally upgraded (direct contribution to labor productivity). It has also been observed that improved dwellings are frequently transformed into some sort of informal economic production units. Improved road systems make commodity outputs of small units more easily accessible. Construction industry thus contributes to higher productivity.

The construction sector directly relates to employment, power and transport sectors. The construction industry is a very labor intensive, providing many jobs for skilled, semi-skilled and unskilled workers both in the formal and informal sectors. The informal sector also employs many people in construction industry. For the migrants from the rural areas the construction industry is a stepping stone to urban life.

It is a recognized fact that the health of the Real Estate Development sector is the barometer of the national economy. Housing is indeed one of the most important priorities of any government. It is very unfortunate that today the Real Estate Development sector of Bangladesh is in the doldrums. Many construction projects are left incomplete; many people who have invested their money face uncertain future; and many related industries will face the consequence of this depression in the immediate future.

It is our view that a part of the reason behind this pathetic scenario is the misunderstanding of this sector by the successive governments. Instead of receiving encouragement and nurturing, this sector has been progressively quashed by regressive government policies. A few examples are listed hereunder:

· In 1989 the Ministry of Industries declared construction of residential complexes on commercial basis as an industry. However, to-date this notification from the Ministry of Industries is not recognized by the National Board of Revenue. Therefor, this sector is not entitled to any benefit of an industry.

· Transfer fees stamp duty and registration charges for property in Bangladesh are amongst the highest in the world. In the metropolitan city, a purchaser has to pay approximately 25% of the total value of the property to the government exchequer under different heads for registering the apartment.

· House Building Finance Corporation is the only government institution dedicated to the financing of homes. Over the last 15 years this institution has been constantly cash starved and has made negligible contribution to the financing of this sector. In Bangladesh there is virtually no financing facility for this sector and almost all procurements are made with 100% equity. Recently some private institutions have entered the housing financing business but the cost of borrowing from these institutions is prohibitive.


Development of High-rise Building

High-rise buildings probably were first constructed in response to the corporate need for increased direct communication and expansion of business operation. Businessmen understood the need for proximity and personal communications and quickly recognized the value of “going vertically up” within a compact business core in the central city. This philosophy has remained, all over the world, despite the extraordinary technical advances made over the last 50 years in both transportation and telecommunications. The corporate world is not the only beneficiary of high-rise development; often other enterprises that serve corporate business or its employees also locate themselves in high-rise structures. Offices for lawyers, accountants and other business related professionals are established in close proximity to the corporations, often being located in the same building. Medical and dental practices open where they can capture and serve office workers as well as the general urban population from a central location. Even where the structure bears a corporate name and was built specifically for a corporate tenant finally ends up catering to various professional and business clients. Today’s high-rise building usually contains a variety of tenants.

The city itself benefits from the concentration of business space and business activity that high-rise development generates. Land values are greater in the down town areas of cities and at other prime locations that are highly attractive. In most cities, high-rises have evolved in concentrations, and those concentrations generate the highest tax returns to local government. For example in Chicago, approximately one-third of the city’s real estate tax return comes from the greater downtown area covering less than 7% of the total area of the city.

Depending on overall factors, during the last three decades, Dhaka City attempted to expand vertically to meet the problems of urban population explosion, scarcity of land and spiraling land price. High-rise structure also has a positive influence on city form and organization.

The tallest building in Dhaka (30 stories) has been constructed at Motijheel for office purpose. High-rise buildings for residential purposes are being seriously considered to provide an answer to urban housing problems. How far this is tenable in context of conditions prevailing in developing countries must be studied in greater depth so that planned growth in high-rise housing construction can be promoted.

Because of the great size and height the development of tall buildings usually involves active interaction of public and private decision-makers. Successful public private collaboration usually revitalizes the urban environment. Thus tall building development in the form of office towers, hotels and residential apartment buildings can become a critical part of revitalization in major cities of the world, including Dhaka.

In terms of Dhaka it can be seen from the map (Figure 4) that the location of the majority of the high-rise structures are clustered in the business districts and central city areas where land value is highest. The reasons of this development are as follows:

· Easy access
· Proximately of supporting facilities of offices.
· Higher rate of return on investment.
· Besides the land value there are other reasons for the construction of high-rise structures to accommodate office staff where land is limited.

We can safely say that high-rise structures in other locations is not suitable or attractive because of
· Lack of access
· Absence of supporting services
· Lower rate of return


Current State of Tall Building in Bangladesh

The history of tall building in Bangladesh is only four decades old. Broadly speaking two types of high-rise buildings are constructed in terms of use type:
· Institutional buildings including government & commercial office buildings, hotels etc.
· Residential buildings particularly for middle and high income groups.

The trend that started in 1963 with the construction of 11-storied WAPDA building at Motijheel, the Central Business District (CBD) of the capital city Dhaka has currently gained a tremendous momentum. Although tall buildings are being constructed in few numbers in other cities of the country, almost all the existing and under-construction tall buildings of the country are located in the capital city. In Dhaka, there are about 120 such notable buildings clustered mainly at the Motijheel commercial area and in places like Eskaton, Mohakhali and Banani. If one compares the number of tall buildings in the capital city with the size of the greater Dhaka with a present population of about 10 million, the insignificant proportion of the tall buildings with respect to the overall scenario becomes evident. The growth of tall building in Dhaka City with time has been shown graphically in Figure 5.

It is evident from the figure that a steady increase in the number of tall structures has taken place in the recent years. Whereas in the sixties and seventies, on n verge five high rise buildings were constructed in Dhaka City, in the eighties about twenty tall buildings were constructed. Construction of tall structures attained its peak in the nineties, and, in the last five years about 50% of the total present number of all tall buildings of the capital city has been constructed. The trend of going high is still there.


Figure 5: Growth of Tall Building in Dhaka City: 1963-2001
Source: SHELTECH


Prospects and Problems of Tall Buildings

It is almost inevitable that high rise construction will increase in future in Bangladesh. In fact, in a fast growing metropolis like Dhaka where, land is scarce and land value is high, there is no other obvious option but to go for tall structures. In a country where expatriate consultants and contractors are being inducted in almost every field of technological activity, it is interesting to note that all the tall buildings in Bangladesh have been planned, designed and constructed by local architects and engineers. But high rise buildings, both commercial and residential, of Bangladesh have already revealed their merits and demerits in the very short time that they have been serving the community. Some of the advantages of tall buildings are given below:

· It increases land-use density leading to proper utilization of inner city land.
· If properly designed and constructed it can increase the user efficiency for both commercial and residential use.
· It can bring positive effect on city form.
· High-rise buildings and the users that occupy them usually return more revenue (benefits) to local governments than they require in services (costs) from them. This positive cost-benefit ratio is often used as a measure of the attractiveness of a development.
· High-rise buildings have established an efficient setting for corporate business enterprise, a significant source of revenue for local government, and a business focus for the entire metropolitan area.
· Residential uses in high-rise have resulted in both success and failure. Tall apartment buildings have successfully fulfilled the needs of upper income and middle income families in different developing countries.

However, in the absence of proper urban planning and design, high rise buildings of Bangladesh are responsible, in many instances, for several problems leading to disadvantages for Dhaka and other city dwellers of Bangladesh. Some of the disadvantages that the existing tall buildings have demonstrated due to ill planning are listed below:

· Unplanned tall structure destroys the harmony in skyline.
· It put pressures on utility services like water supply, gas and electricity.
· It increases traffic congestion and parking problem.
· It creates problems of light and ventilation for adjacent small structure.
· Fire fighting problem in the building.
· Problem related to inadequate number of lifts.
· Problems due to inadequate parking space.
· Lack of community space.
· Lack of children’s playground.
· Socio-phychological problem.

Besides, Bangladesh is recognized as an earthquake prone country by Bangladesh National Building Code (BNBC, 1993). Seven major earthquakes, magnitude equal to or more than 7.0 on the Richter Scale, had affected today’s Bangladesh during the last 150 years. But housings in Bangladesh seem to be constructed to meet the social demand, not as an earthquake resistant frame building. Mainly the following three unusual structural factors make the new housings in the country very seriously vulnerable to earthquake:

· Ground and/or first story is appeared to be soft story (car parking story)
· Frames are unfilled by masonry works supported only by sand-cement mortar
· In some cases it is observed that beams are appeared to be stronger than columns

The ground floor of typical six-story buildings and the ground and/or first floor(s) of high rise condominium are appeared to be soft story because these stories are not supplied with proper element such as shear walls and bracing etc. A lesson has repeatedly been learned from many earthquakes that the soft story is one of the most common causes of building failure.

However, it is understood that in future high-rise building will continue to be a strong urban influence. It is obvious that Dhaka City is going to have a large number of buildings around 15-20 story high, both for office as well as residential purpose. However, building regulations must be maintained to reflect the special needs of these buildings particularly taking into account the traffic problems, fire safety, vulnerability to earthquake and setback rules.

In addition, stricter enforcement of the rules and better quality control during construction need to be introduced. Some of the opportunities of planned growth of Dhaka City, using the experience of other cities, have already been missed during the last three decades. But the high-rise expansion can still be planned to create a better urban habitat, but this will require the concerted action of planners, architects and engineers.



Land Use, Land Use Economy and Land Value

The trend towards construction of tall buildings in Dhaka is very much connected with the very high price of land in the main commercial and business districts. Since land value is very high in inner city areas, population density should be increased by adoption of multi-storied construction. In less developed areas, where commercial value is less, tall buildings are virtually non-existent. The overall picture of the land-use type in Dhaka has been shown in Figure 6. It is evident from the figure that only 39% of the total land of the capital are in urban use, while 61% has rural or semi-rural use.

Figure 6: Land Use Types of Dhaka
Source: SHELTECH

High-rise buildings are constructed to ensure economical use of land in areas where land is scarce and its cost is high. Individual plot holders can save a lot of land by going in for multi-story buildings. However, the savings in a given sector of land depend on the gross densities in number of dwellings per acre including the land required for common amenities like parks, playground, schools, shops, road etc.

Dhaka has experienced an unprecedented increase in land value since the early seventies. In the past decade Dhaka has mainly developed along the two main axes towards the north of Dhaka. Due to huge increase in the population of Dhaka, the pressure on land for residential use has been very high. Since the sixties until today RAJUK has provided less than ten thousand plots at subsidized rate mainly for the middle and upper income groups. The value of land in Dhaka City, mainly in the central area, has increased at a rate much higher than the increase in cost of living in Dhaka. The price of high-class residential land has increased 100 times (approx.) during the period 1975-2000. In the absence of any proper land value records it is very difficult to compare the land value over the past decades. But Table 1 will provide some idea regarding the increase in land value between 1975 and 2000.

It has been stated that the big real estate companies are mainly responsible for the high price of land in the central area because they pay a much higher price for a good piece of land. It is argued that due to this reason middle and upper middle class families are being unable to buy land in Dhaka.

Area
1975
2000
Tk. / Katha
Tk. / Sq. Meter
Tk. / Katha
Tk. / Sq. Meter
Baridhara
25,000
373
25,00,000
37,361
Gulshan
25,000
375
22,00,000
32,877
Banani
25,000
375
20,00,000
29,888
Mohakhali R/A
25,000
375
18,00,000
26,900
Dhanmondi
25,000
375
22,00,000
32,877
Azimpur
17,500
261
16,00,000
23,911
Mohammadpur
25,000
375
12,00,000
17,933
Shantinagar
20,000
300
15,00,000
22,417
D. O. H. S.
20,000
300
16,00,000
23,911
Shamoli
17,500
265
10,00,000
14,944
Uttara Model Town
20,000
300
10,00,000
14,944
Cantonment Thana
20,000
300
10,00,000
14,944
Kamlapur
17,500
265
8,00,000
11,956
Saidabad
17,500
265
8,00,000
11,956
Gandaria
10,000
150
7,00,000
10,461
Bashaboo
2,000
30
8,00,000
11,956
Kalyanpur
17,500
265
8,00,000
11,956
Mirpur
10,000
150
7,00,000
10,416
Kachukheth
10,000
150
8,00,000
11,956
Badda
4,000
60
6,00,000
8,967
Goran
4,000
60
6,00,000
8,967
Demra
4,000
60
6,00,000
8,967
Motijheel C/A
50,000
750
35,00,000
52,305
Kawran Bazar C/A
41,500
620
25,00,000
37,361
Mohakhali C/A
33,500
500
25,00,000
37,361
Table 1: Land Value Increase in Dhaka City (1975-2000)
Source : 1975 – C. U. S., Dhaka University
2000 – SHELTECH
We are of the opinion; however, that Real Estate companies are just one among several reasons for the rise in price as the value of urban land is actually determined and fixed through competition in a complex economic process. Besides, there are other factors, which influence urban land value. These are social values, customs and others. On carefully analyzing the land value trend of Dhaka City and the suburbs for the last thirty years, a number of causes of high land value have been identified as follows:

a) Lack of investment opportunity in other sectors of economy.
b) Rapid urbanization and consequent scarcity of urban land.
c) Uncontrolled land market.
d) Lack of comprehensive land policy.
e) Inappropriate taxation policy.
f) Political instability.
g) High rate of inflation.
h) Land speculation and the role-played by brokers.
i) Land ownership being regarded as a symbol of social prestige.
j) Inflow of foreign remittances earned by Bangladeshis abroad, especially from the Middle East.
k) Land purchase by real estate developers.

Since land value is very high in inner city areas, increasing multi-storied construction will increase the density. Many parcels of inner city land are under utilized or vacant, which should be put to proper use for balanced growth. To achieve these objectives and to minimize the negative effects of high-rise constructions the following recommendations are suggested:

a) Proper rules and regulations for high-rise construction should be formulated and implemented.
b) In case of apartment, exclusive apartment law (condominium law) should be enacted and implemented by RAJUK and other concerned agencies.
c) Zoning law for Dhaka City in terms of use class and height class should be formulated and strictly enforced as per DMDP structure plan and related plans.
d) Particularly in the high cost areas of inner city vacant land tax and punitive tax for very low-rise construction should be enacted.
e) Building rules related to lift, parking and fire fighting should be strictly monitored and enforced by concerned agencies, as per Bangladesh National Building Code 1993.
f) In commercial areas low-rise structures should be totally discouraged by appropriate measures.
g) In high-rise/high density zones, co-ordination between utility agencies should be increased to plan in advance for high capacity utility mains.

However, in the context of Dhaka it is envisaged that in the future years high-rise construction will increase both for commercial buildings and residential development.




Construction Industry and Environment

Once undesirable environmental consequences of the use of a natural resource have been identified, there are two types of control, which can be exercised: control of the supply and control of the demand. Control of supply could be exercised by means of introducing land-use regulations, pricing of the resource and other measures, eliminating indiscriminate exploitation or reducing it to acceptable levels. Demand side controls aimed to restrict or change the nature of the activity. The goal is to reduce or eliminate the demand.

In the case of construction activity, which is acknowledged to be essential for virtually every type of development, an increase rather than a decrease is desirable in all developing countries. There are many ways in which the nature of current construction activity can be changed to make it less environmentally damaging, without reducing the total amount of construction in terms of the built space created or other functions it performs.

These include:
- Improving land-use and pollution emission legislation and control
- Pre-construction environmental impact appraisals
- Greater use of demolition and mineral & agricultural wastes in construction.
- Extending the life of and reuse of existing buildings


Potentialities in Construction Sector

The construction sector has great potentials. The traditionally used building materials are locally produced. Cheap labor, appropriate technologies and easy transportation system have also been a positive catalyst for the advancement of the construction industry.

(a) Building Materials: Locally available traditional raw materials can be used as effective construction materials. The government should publicize information regarding locally available building materials, its high productivity, the locations and accessibility. Local small-scale industries should be encouraged to produce quality-building materials. The Housing and Building Research Institute (HBRI) is encouraged to develop new building materials and techniques with the objectives of reducing costs and imports. On one hand, there is research into alternative and low-cost materials and techniques while on the other land; alternative building materials of indigenous sources like clay tiles get little interest.

(b) Labor Force: Construction industries can create employment opportunities. Institutional training should be facilitated for the unskilled laborers. Special vocational training should be introduced and training made essential for creating highly skilled specialized labor force.

(c) Appropriate and Simple Technology; Building technologies will differ from place to place. Use of appropriate and simple technology is essential to improve construction productivity. In Bangladesh the Local Government Engineering Department (LGED) has developed Low Cost. Reinforced Cement Concrete (RCC) piles, which have cost similar to timber plies. These low cost piles address the deficiencies of the timber piles and also possess additional advantages compared to cast-in-situ and pre-stressed piles. These piles can be used as compaction piles as well as load bearing piles. For small structures, the possibility of application of this pile is immense e.g., in buildings, bridges, culverts etc. The newly evolved RCC pile can be locally produced with relatively simple technology. These piles would provide a much better alternative to the timber piles, which are, at present, being widely used. The Low cost RCC piles will contribute towards better conservation of forest resources and thereby minimize degradation of the environment.


Apartment Development: Problems and Prospects

Apartment development in Dhaka City, as mentioned earlier, has become increasingly popular in recent days and is likely to continue for sometime. It has a number of plus points regarding solving housing problems of the city. But at the same time it has certain demerits. We propose to review critically both the prospects and problems. It may be worthwhile to describe here the types of apartments, which are now being built in Dhaka. Broadly speaking two types of apartment development can be noticed. Firstly, up to G+ 5 story walk up apartments, which are usually RCC frame structure with average fittings and fixtures (e.g. in-situ mosaic, concealed wiring with local fittings, best quality BISF sanitary ware etc.). These flats within the central areas are sold around Tk. 1000 per sq. ft. excluding the cost of parking space. An apartment of this type with an area of 1400 sq. ft. (3 bed rooms, 2 + 1 toilets) and a secured parking space will cost around Tk. 20-25 Lac. The cost may be slightly higher if the apartment is located in a major road. The second types of development are those apartments in high-rise buildings of more than six stories. But the present trend in Dhaka City is 12-20 stories. The price of such apartments is presently more that Tk. 1300-2000 per sq. ft. plus the cost of parking space ranging from Tk. 1.5 Lac to Tk. 2.0 Lac per parking space in a good location.

Here it has been attempted to identify the major criticisms of apartment development as cited in the media. They are:
i. Economic: Mainly middle and upper income families are purchasing both walks up and high rise apartments. Lower middle and lower income groups can not buy such expensive flats.
ii. Services: In many apartment complex certain services (mainly recreational and community space, open area) are lacking. Problems associated with water supply, fire fighting and fire escape (mainly in high rise apartments), and inadequacy of lift are notable.
iii. Social: It is sometimes argued that high rise building prevents social contact with other neighbors, which can lead to socio-psychological problem.

The above mentioned criticisms can be contradicted on the following grounds:
i. Economic: The private apartment developers are catering for the middle or upper income group and thereby solving the problem partially for that group. This has noting to do with the housing problems of lower income groups. Only government and autonomous agencies can be helpful by subsidizing and/ or extending loans to their employees in apartment construction and/or purchasing. Private sector can only be effective when soft term credit area extended to private developers for constructing apartments at lower cost catering for lower income families.
ii. Services: Services provided are related to the cost of the apartment. In the private sector higher facilities will lead to higher cost which can be prohibitive even for upper middle income families. Lack of open space is entirely due to very high land cost in the good localities. Many associated problems regarding service and design problem can be very effectively tackled with proper institutional and design control. Sometimes these problems only arise in the cases of developers lacking in professional and financial expertise.
iii. Social: This can be minimized by more careful planning and design of high rise apartments. Rather than constructing matchbox type structure more intimate and personal design elements can be incorporated in high rise blocks.

Besides these broad criticisms, many small problems have been identified from the responses by apartment users in different apartment blocks in the city. These are cited below under the following headings:

a) Planning Problems
i. Inadequate distance from one building to another.
ii. Some parts of the building are always shaded.
iii. Lock of green space.
iv. No relationship between surrounding built forms.
v. No fire escape or fire fighting provisions.
vi. Absence of community space or any playing area for the children.
vii. Exposed gas lines inconveniently situated at the main entry, which may be dangerously hazardous.
viii. Height variation between different closely associated buildings creating privacy problem.
ix. Absence of lifts or inadequate number of lifts.
x. Absence of mail box.

b) Planning and Designing Problems
i. Parking area is paved and totally open and unsecured in many cases.
ii. Outer view is disturbed by unplanned telephone lines.
iii. Absence of garbage chute or garbage disposal arrangements.
iv. People drying wet clothes inconveniently from verandah or in ground space and spoiling the beauty of the building.

c) Design Problems
i. Ladders are used to approach the roof, which are inconvenient. In some apartments roofs can not be used at all.
ii. Secondary entry is more utilized than the main entry as it exposes the kitchen, or toilets of master bed etc.
iii. Entry to the building is through a dark place, which is not easy to locate.
iv. Entry to the apartment with long corridor which is an improper utilization of space.
v. Lack of proper outlet makes the stagnant air hot and unhealthy.
vi. Dining space is the circulation space with inadequate opening and designed without considering furniture layout.
vii. Privacy problem created between exposed living and dining space.
viii. Staggering stair cases with narrow stairs.
ix. Lack of proper ventilation or light in different rooms of an apartment due to improper planning of rooms.
x. Built-in closet is not functional in terms of sizes, shape and height.
xi. Absence of lightning arrester.
xii. No provision for installation of air-condition units at later stage.


d) Construction Problems
i. Fitting and finish of toilet fixtures in certain cases are unsatisfactory.
ii. Constructional defect leading to cracks in the floors and walls.
iii. Dampness in external walls and in certain cases in internal walls.
iv. Excessive heats in the top floor due to lack of lime terracing.

For solving the housing problem in Dhaka city the following steps should be considered, some of these stapes are directly related to housing, while others are concerned with different issues having impact upon housing:

a) The growth of Dhaka City needs to be checked. This can be attained by developing small and medium towns through adoption policy of balanced urbanization and decentralization. By generation employment opportunities in these intermediate cities, the migration towards Dhaka can be trapped in those towers.
b) A metropolitan housing policy should be devised in conjunction with overall metropolitan transport and land policies.
c) Provisions of areas for high-rise, low-rise, permanent and semi-permanent structures should be made in the Master plan of Dhaka City. Expensive central city areas should be reserved for high rise developments. In this way the concerned authorities can provide higher capacity infrastructure at an optimum cost.
d) Housing development both in public and private sectors should conform with the development of physical and social infra-structures like roads, electricity, water-supply, sewerage, gas, telephone and the like.
e) Sprawl development of Dhaka City in any direction should be discouraged. Underutilized land within the city limit should be developed and properly utilized.
f) Special schemes for housing the urban poor and destitute by constructing low cost core housing with provision for upgrading on self-help basis should be adopted.
g) The private sector should be encouraged to cater for the upper middle and upper income groups.
h) Walk-up row housing and tenement blocks should be developed both in the private and public sectors to house the lower income groups.
i) Credit facilities for housing development for individuals and institutions should be modified to increase the housing stock.
j) National and municipal policies for high rise development should be formulated.
k) To check the mushroom growth of real estate companies there should be arrangements for scrutinizing the technical, financial and institutional capabilities of prospective companies.

Developing housing sector comprises not only building of houses but also the development of socio-economic infrastructure. In fact, a separate directorate of Real Estate could be established, which will inter link all the concerned agencies, related to house construction such as RAJUK, Dhaka Municipal Corporation, WASA, PDB, Titas and House Building Finance Corporation (HBFC). This will minimize the procedures and formalities associated with house construction.

All future activities of concerned agencies involving land, finance and utilities should be forward-planned under a common framework to increase the efficiency and minimize overlapping of responsibilities. The neglect of the private sector is a fundamental defect in our housing policy. A comprehensive and pragmatic housing policy should be adopted by the government, which will expedite housing developments. The economy of land use should be given top priority in any future housing policy.

A private housing-bank could be set up for financing housing development as in the absence of such a bank; land developers and promoters are very much handicapped. Such a specialized bank to tide over the housing crises deserves serious consideration.


Broad Recommendations

The construction in Dhaka has multi-faceted roles for sustainable development. It provides the direct means for physical development, expansion, improvement and preservation through maintenance. It is the key sector in city’s development. It provides the direct means for physical expansion, development and improvement. The planning and design component of construction is very vital and it contributes to high productivity. Appropriate planning and design for construction, use of modern equipment, efficient use of building materials, participation of construction actors and effective management are considered important factors for construction industry’s development.

It is understood from the experiences that the construction industry has multidimensional aspects, which include actors’ participation, building materials and equipment, building code and standards, regulations etc. It is also observed that the construction activities are frequently disrupted by the inherent problems. Considering all issues, following broad general recommendations both in the public and private sector should be taken into consideration:

a) Appropriate planning and programming for the construction project would be framed based on the nature of works.
b) A major concern in the construction industry is the apparent backwardness in the adoption of new construction technologies for the adoption of new construction technologies and practices, which can reduce cost and increase quality.
c) The authority with help of professionals should formulate general guidelines of building designs. Special attention would be given to prepare appropriate planning rules, building codes etc. based on the character of the area. It will also cover building regulations and related detailing of the building and also cover selection of materials.
d) It has been observed that the construction material and equipment differ from place to place, considering this fact, specialized standards and code should be made.
e) Simple and innovative technologies should be introduced in the construction sector for high productivity. The attention should be given on its acceptability to the construction actors. Affordability to the government as well public enterprises should be taken into consideration.
f) Research and innovation for development should be encouraged. Proper research support and financial support should be provided both in public and private sectors. Even groups of entrepreneurs and individuals should be encouraged by the policies.
g) Research outputs, available materials, energy consumption cost, environmental impacts and other information should be made available to the public through institutions and mass media.
h) Selection of building materials, the consultants are required in conjunction with experienced contractors.
i) Local based building materials as well as cheaper alternative/substitutes should be encouraged.
j) Special financial policies for consultants/contractors financing should be introduced. It would be included: i) reduction of bureaucracy, ii) generous advance payments, iii) risk guaranties etc.
k) Overall management effectiveness is essential for the construction sector. It should be managed on an institutional basis, and the construction actors have contractors, laborers, managers and other related actors as active participants.
l) Adequate legislative support is needed to recognize the construction sector as an important for national development. An extensive and multifold regulation is needed. It should includes civil engineering works, durability of construction outputs, all safety measures including loads, imposed deformations, environmental issues, fire and natural disasters etc.
m) The establishment of regulations and control procedures is the traditional function of the government. It is needed to recognize the construction industry as an important sector for national development. The regulations and control can contribute a strong positive impact to reduce construction cost, environment hazards, promote greater energy efficiency in building and limit energy consumption and pollution etc.
n) Special attention would be given to protect the physical environment of the project’s site. Existing “Legal action” procedures would be updated in which legal action can be taken against the faulty actors.


Concluding Remarks

The planning and design approach is very important components in the construction sector specially to ensure sustainability. The technology and innovation in the construction industry may reduce construction cost and time, as well as increase safety. New technological innovations, often in conjunction with materials and equipment, should be introduced into several of the disciplines within the construction industry. Such technology also ensures higher productivity, which can bring socio-economic prosperity to the country. The Government sets regulations on construction industry (building code, land use, tendering constructor’s negotiation and environmental regulation) in national and local level. Changes are also sought to improve quality, management efficiency, material flow, and maintain schedules by better organization and controlling of design and production process.

3 Comments:

At 12:21 AM, Blogger Justin Peach said...

I recently came across your blog and have been reading along . i thought i would leave my first comment .Very nice blog and thanks for sharing useful information....

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At 1:54 AM, Anonymous Anonymous said...

Saidhur Bhai.

Satti Apnar Blog ta Darun.Pore Khub Valo Laglo.Apnare Onek Dhonnobad.


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At 12:16 AM, Blogger HcoRealEstate said...

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