Growing sublets paint a grim picture of the state of middle class

Highlight:

• Dhaka households earning Tk20,000 or less rent shanty houses for Tk3,000-Tk5,000
• Households earning Tk21,000 to Tk30,000 sublet for Tk6,000-Tk10,000
• Those earning Tk31,000 and Tk40,000 rent small apartments for Tk11,000-Tk14,000
• Those earning Tk41,000 to Tk50,000 pay Tk15,000-Tk20,000 for 1,100-1,150 sq ft flats
• People with Tk51,000-80,000 pay between Tk21,000-Tk30,000 for 1,150-1,200 sq ft flats
• People with Tk80,000-1 lakh pay Tk31,000-Tk40,000 for 1,200-1,500 sq ft flats
• People with more than Tk1 lakh pay Tk40,000 for upmarket 1,500+ sq ft flats

Hasib, a private job holder, had to depart Dhaka in mid-2020 during the coronavirus pandemic, when there was a big layoff in the company he was working for. 

Before that, he used  to earn a monthly salary exceeding Tk70,000, and could quite comfortably bear the expenses of a family of five including his wife, two children and mother. 

They used to reside in a three-bedroom flat in Moghbazar's Dilu Road area, paying a monthly rent of Tk23,000, including service charges, and electricity, water and gas bills. The flat also had three washrooms and two balconies.

But after the layoff, Hasib could not manage a new job even after trying for a few months. He decided to relocate to his ancestral house in his hometown Tangail as his savings were running out. 

Hasib returned to Dhaka in early 2022. He is the only earning member of the family, and the new job he has secured after coming back to Dhaka fetches him a meagre Tk30,000 a month.

This time around, he had to leave his elderly mother behind, and, on top of that, settle as a sublet holder in a three-bedroom flat at Moghbazar's Sonalibagh, a relatively lower-class neighbourhood compared to Dilu Road. 

In it, the four members of his family fit in only one bedroom and also use the common dining-drawing space. As there is no washroom attached to their sole bedroom, they are required to use the common washroom. 

Hasib has a 12-year-old daughter. He despises the fact that every time his daughter needs to use the restroom, she has to "walk past everyone else in the house, including the teenage boys of the sublet providers." This becomes especially uncomfortable for her, when she is on her periods. 

His wife, meanwhile, has daily battles with the subletters over gas and water. Gas supply to the apartment is intermittent and dim, forcing his wife to wake up very early to cook for the family. 

"My wife wakes up around 4 am, but on most occasions, she is prevented from using the kitchen by the other family. They argue that as primary renters of the flat, they have the right to cook first," Hasib explained. 

Additionally, if there are any issues with water supply due to motor pump problems, their rights to use the extra water stored in the washrooms and kitchen is forcefully restricted. 

Meanwhile, Hasib and his family do not have keys to the main door and collapsible gate on the ground floor, meaning they have to request access from the subletter every time, which is often greeted with visible irritation. As a result, Hasib's wife keeps insisting he find a place they will not have to share with another family.

"The living conditions are truly inhumane for us. But I have no other choice. This one bedroom settlement alone costs me Tk8,000 per month. Then there are household expenses, schooling, and private tuition fees of my children," he told The Business Standard. 

But why did he not seek a one-bedroom flat instead of going for a sublet? Turns out, his budget is not adequate for such a flat. 

"I need to live in the Moghbazar area because my children's schools are nearby. But here, you will not find any one-bedroom flat," Hasib said. 

And even if they were available, it would cost at least Tk12,000-13,000 a month, which is far beyond what Hasib can afford.

His monthly expenses already exceed Tk35,000, which is beyond his monthly salary, leading him to borrow money from his friends and other acquaintances.

"This earning is nothing, you know? My income has plummeted drastically, while prices of practically everything are on the rise. I am still hoping for a well-paying job like before. But I do not know if that will ever happen," said Hasib, who is now in his 40s. 

As The Business Standard explored the subletting issue further, it became clear that the increase in both sublet holders and sublet providers are closely tied to the economic realities following the pandemic.

Furthermore, the impact of the Ukraine war and the country's escalating inflation have also exacerbated hardships faced by the middle and lower-income population.

Interestingly, Hasib's story aligns closely with a study conducted by the Real Estate and Housing Association of Bangladesh (Rehab), an organisation of housing traders, in 2022.

The research was conducted at various areas of the capital: Jatrabari, Khilgaon, Dhanmondi, Hazaribagh, Mirpur, Gulshan, Banani and Uttara.

The study suggested that in Dhaka, households with incomes of Tk20,000 or less typically inhabit shanty houses costing between Tk3,000 and Tk5,000.

Households with incomes ranging from Tk21,000 to Tk30,000 reside as sublet holders in flats with rents between Tk6,000 and Tk10,000 a month. 

Those earning between Tk31,000 and Tk40,000 live in places where rent is Tk11,000 to Tk14,000 a month. Households earning between Tk41,000 and Tk50,000 inhabit flats rented at Tk15,000 to Tk20,000 - the size of these flats range between 1,100 and 1,150 square feet. 

People with an income of Tk51,000-80,000 live in 1,150-1,200 square feet flats, the rents of which are between Tk21,000-30,000. People with an income of Tk80,000-1 lakh tend to live in flats of 1,200-1,500 square feet - the rent of which are between Tk31,000-40,000. 

To afford a high-quality residence of 1,500 square feet or larger, an income exceeding Tk1 lakh is necessary. Rent for such properties may exceed Tk40,000. 

This shows why Hasib, along with his wife and children, is living in a dire situation - both comfort and privacy having been compromised.

If we look at the bigger picture, the tendency of both sublet holding and providing is rapidly growing not only in Dhaka, but all across the country.

Bangladesh Bureau of Statistics (BBS) has identified subletting as a "common adaptation strategy among the low, medium, and limited income groups, which is commonly prevalent in urban areas."

According to the Bangladesh Sample Vital Statistics of BBS, there were 3.3% sublet holders and 0.7% sublet providers in 2022, up from 2.4% and 0.5% respectively in 2021.

Among the divisions, Sylhet has the highest rate of sublet holders at 6.8%, while divisions of Dhaka and Barishal have 4.2%. The practice of subletting is highest in city corporation areas.

As far as the Dhaka metropolitan area is concerned, 7.64% of the people were sublet holders in 2022, up by 2.73% from 2021. On the other hand, 2.05% of the people were sublet providers in 2022, up by 0.15%. 

To put things into perspective, more than two lakh households in the two city corporations of Dhaka were sublet in 2022. 70,000 of these households were sublet for the first time. It indicates that many households, which once lived independently, are now compelled to sublet a portion of their flats to alleviate the financial strain of rent.

Sabera from Mugda is a typical example. Previously, her family, comprising her husband and three children, resided in a flat with two bedrooms, a guest room, as well as a drawing and dining space, all for Tk24,000.

After her husband's passing during the pandemic, Sabera is trying to establish herself as an F-commerce entrepreneur. However, she mostly relies on the wealth her husband, who was a lawyer, left for their family.

Since January 2022, she has been subletting the guest room and a common washroom for Tk6,500. She cites two reasons for why she did so. 

"I was feeling insecure as there was no longer an adult male member in my family," she said. "So I thought subletting the smaller room to a married couple would be a good idea." 

She added that the additional Tk6,500 also came as a significant help to her.

Despite that, things are not looking very promising for Sabera at the moment. She calculated that her monthly expenses, including children's tuition fees, exceed Tk50,000, while her own income is not more than Tk20,000. 

Moreover, the money her husband left for them is also running out.

Sabera has been searching for a small flat for the past few months with a budget of Tk10,000. However, she's finding it challenging to find a decent flat within this budget.

"I learned that most flats in good locations have at least three bedrooms. And even if there are two-bedroom flats in good locations, the rents would be around Tk18,000-20,000," she shared. 

So Sabera is now contemplating whether she should make a transition from being a sublet provider to becoming a sublet holder herself.

But even if this is what she wants, it will not be very easy. Many flat owners nowadays are imposing strict conditions on new tenants, stating that tenancy would be allowed only if the tenants do not sublet flats in turn.

"Those who cannot afford a full flat should not go for one," said Faruk Bhuiya (not his real name), a businessman who owns several flats in the New Market area. 

"I have seen that most sublet holders are either college or university students, or low-income job holders. It is risky to have them in your house," Faruk explained.