Institutional Framework to Safeguard the Interests of Middle-Income People in a Neoliberal Real Estate Market in Dhaka

Abstract

Neoliberalism was introduced in the 1970s in search of the remedies to the global economic crisis resulted from the failures of Keynesian welfare states in United States and England. Neoliberalism recommended economic deregulation through withdrawal of the states’ control from all sectors of production and encouraged private sector to lead the economic development. Social welfares were abolished with the beliefs that private market will serve the needs of the citizens if perform efficiently. The states’ roles were redefined as the facilitators of the markets. The neoliberal development approach transformed housing from a social good into a commodity good which is provided by the private market based on demand but not the need. The intensive review of literatures on the relations between neoliberalism and housing in neoliberal cities worldwide has revealed that the neoliberal policies have made housing, which is now provided by the market, unaffordable for the majority of citizens. Neoliberalism was introduced in Bangladesh in the early 1980s through Structural Adjustment Programs (SAPs). The review of Dhaka housing scenario revealed that house rent and price of Dhaka is unaffordable for majority of city dwellers. In this context the study targeted at analyzing the contributions of neoliberal policies to the housing affordability crisis of Dhaka with special attention to MIH. The study is exploratory in nature and involves qualitative methods of data collection and analysis. Garments industry is one of the most significant outcome of neoliberalism in Bangladesh which flourished only in Dhaka. Privatization is another neoliberal strategy which also contributed to make Dhaka the mega city by mushroom growth of private clinics, hospitals and universities. All the neoliberal economic development efforts were Dhaka focused and made Dhaka the destination of migrants from all over the country. The soaring population created huge demand or need for housing. In the supply side, due to the neoliberal strategies, like withdrawal of investment ceiling and trade liberalization, real estate developers emerged in the market since the mid-1980s. However, the supply never matched with the ever increasing need for housing in Dhaka. Though the state adopted the neoliberal market enabling housing policy, could not facilitate the formal market to expand the supply for MIHs. The review of literatures on neoliberal impacts on housing provisions across the world have been identified that the homeownership focused housing strategies (ABW) of neoliberalism have encouraged both house price and rent appreciation, and state and market led gentrifications in neoliberal cities have caused sharp increase in property prices which ultimately have caused housing affordability crisis. The affordability crisis is most acute in cities of developing countries. Based on these findings the case of Dhaka was investigated and similar outcomes of neoliberalism have been identified. Examining the constraints that hinder the provision of MIH, the research also has identified a conducive institutional framework by redefining the state’s role in enabling the market. Good governance in Public Private Partnership to initiate a holistic approach for the provision of affordable housing for MIHs has been recommended based on the thematic analysis of the transcripts generated from in-depth interviews with the housing experts, developers and the professionals of the public agencies involved in the provision and regulation of housing in Dhaka.