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The Thing About Real Estate in Bangladesh

If You Build It, They Will Come: The Bangladeshi Real Estate Explosion

My discovery of the surreal world of Bangladeshi Real Estate was accidental. Fall of 2008 I was working a temp job at the Hilton on the corner of 53rd and Avenue of the Americas, New York City. It was some sort of IT conference, a horseshoe bank of conference rooms full of people talking data optimization.

Parallel the bottom of the IT “U” ran a string of rooms separated by accordion-walls, all of which had been slid apart to create one long, massive corridor. The perfect antidote to the stodgy white shirts and black ties, the hushed tones and sharply divided think tank sessions of the information mongers, this corridor was a whirl of activity. Women in explosively colorful saris and men with mustaches that could only be described as walrusian were coming and going in a flurry of flying pamphlets, excited shrieks, handshakes, and hugs.

This was the 2008 stateside fair/expo for the Real Estate and Housing Authority of Bangladesh, for which the somewhat dubious and commonly applied acronym is – you guessed it – Rehab. REHAB is the only trade organization for real estate developers in Bangladesh; current organizational membership stands at 260 firms. What this means, among many other things that we’ll come to in a bit here, is that at least 260 companies are developing multi-million, and even billion, dollar real estate projects in a Country that is more or less the size of Iowa.

What do we know about Bangladesh? Officially known as the People’s Republic of Bangladesh, it was at one point East Pakistan, though the thousand miles separating the country from Pakistan proper facilitated a rift between the partners that ended in the establishment of the independent country of Bangladeshi n 1971.

The creation of the independent state of Bangladesh coincided, in the mid-to-late 1970’s, with a tremendous Population boom in the capital city of Dhaka that has continued into the 2000s. If history teaches us anything, it’s that where there are people there are profiteers. In an effort to keep up with the population eruption, developers emerged from the proverbial woodwork in droves.

Like water leaking from a cracked vase, slow but inevitable, the urban sprawl of the city spread through the 70’s, 80’s, and 90’s, drowning formerly leafy suburbs like Uttara, which until the late 1990’s was a quiet suburban enclave for the upper middle class. Lalbagh, another of Dhaka’s many sub districts, or thanas, reportedly has a municipal area of 9.14 km² and a total of 71,475 housing units, meaning that there are 7820 housing units per square kilometer, or more than 20,000 per square mile. The population of metro Dhaka is thirteen million people. At current growth rates, this number will be 40 million in 2050.

As it stands as of the 2009 census, the population of the People’s Republic of Bangladeshi is 162,221,000. That means that there are more than 150 million people in a country that is, to reiterate, slightly smaller than Iowa (we might as well tell you at this point that the population of Iowa is around three million). Bangladesh’s official landmass is listed at 55,598 square miles, though about 10 percent of this area is water, which means that the livable space within the country is closer to 50,000 square miles. For comparison’s sake, the population of Russia, a country that is more than 100 times larger the Bangladesh in terms of landmass, is 141,927,297.

A panoramic view of downtown Dhaka, Bangladesh

All of this said and done, it makes a good deal of sense, given all of these people and spatial constrictions, that a real estate explosion would be a necessity. More than 150 million Bangladeshi’s have to live somewhere. Enter REHAB, which formed amidst the population boom in an effort to agglomerate responsible building firms and garner the favor of what has been, on and off for the past forty years, a corrupt government bureaucracy.

Now, of course, this is all history according to REHAB, and if we’ve learned anything about history according to big money professional associations in league with the government, it’s that what you really have in REHAB is something of a monopoly designed to elbow out the competition while lining the coffers of government officials who deem it prudent to look the other way. While REHAB claims to exist in order to prohibit fly-by-night developers from throwing up slap-dash housing projects that won’t meet code, if REHAB’s building are being inspected by the government, with whom REHAB is in league, then we’ll never really know if these buildings actually meet code. There are no checks, there are no balances.

And then there’s the fact that REHAB is hemorrhaging money. The association recently petitioned the Bangladeshi government for a 1,000 crore Taka (roughly $150 million) loan, to help stabilize and encourage development. But why, really, do they need that much money? Yes, the population of Dhaka is 13 million, and yes all of these people need somewhere to live, but the average Bangladeshi lives on roughly $4 per day; not nearly enough for a luxury flat in the city.

Let’s break this down a little bit and look at some socio-economic data for the country, and in particular for Dhaka. First, population: Dhaka is an enormous city. But the population of the country as a whole is 162,221,000. As of 2008, 66 percent of Bangladeshi’s are agrarian, living and working from the land. Yet REHAB’s activity is focused exclusively in urban centers and metro areas, providing luxury apartments within commuting distance of cultural centers. Because of this disparity in population demographics, a good number of buildings in Dhaka are barely half inhabited; some of them are completely empty. But the building continues.

Trying to pin down how much a REHAB-associated apartment actually costs is difficult, thanks in large part to the plethora of websites claiming to be the official REHAB site. Dubiously, the most genuine contender for the actual REHAB site came offline during the course of this article’s writing.

And yet really we don’t need to know how much apartments in Dhaka run to know that the average Bangladeshi living on the country’s $1500 per capital income annually can’t afford them. To take it further than that, an estimated 36 percent of the country lives below the poverty line, as opposed to 25 percent in India, a country renown for its squalor (and no offense, India. We still love you). The gall of REHAB, trying to wrangle $150 million from the government amongst this level of poverty, is frankly astounding.

Indeed, Dhaka is known as the Rickshaw Capital of the World, and for good reason: the city is home to 400,000 rickshaw drivers. Dhaka’s lowest class, the bootleg hawkers, shoe shiners, rickshaw drivers, prostitutes, petty criminals, and homeless, is by far its largest. In a city with no affordable housing—in a city filled with empty luxury condos, that is—this economic disparity gives rise to, you guessed it, Slums.

Tanwir Nawaz of The New Nation, an independent news source serving Bangladesh, calls the growth of Dhaka’s slums between 1996 and 2006 “nothing less than immense and spectacular.” The slum population went grew from 1.5 to 3.4 million people in that ten year period, or from 25 to 37 percent of the city’s population. The 37 percent of the city living in the slums is almost exactly equivalent to the 36 percent of Bangladeshi’s living in poverty. At these growth rates, the slum population is expected to exceed 8 million by 2020, meaning that Dhaka’s slum population will equal that of New York City as of the 2008 census.

We’re all intimately familiar with the slums of the subcontinent now thanks to Oscar-winner Slumdog Millionaire, but the psychology of the slum dweller is something we seem to get very, very wrong. While most bleeding heart Americans go on (and on. and on. and on.) about how awful it is that all those poor Indians live in those awful slums, author Suketu Mehta tells a very different story.

Mehta’s phenomenal Maximum City: Bombay Lost and Found, a 2005 Pulitzer Prize finalist, attempts to put a face on the sprawling majesty and depravity of Bombay (or, Mumbai). The author was born in India, grew up mostly in Queens, and returned to Mumbai with the purpose of writing a book about what the city meant to him and to India, and, ultimately, what Mumbai and India mean to the world.

In writing the book, Mehta spent a good deal of time in Mumbai’s slums. We will admit here and now that we do in fact know that India is not Bangladesh. However, the country of Bangladesh is actually within India, and as such, as a subcontitental peoples with similar ethnic and cultural heritages, we will be talking a little bit here about India and then we’ll bring it back around to Bangladesh. So please, for the love of god, roll with it.

What did Mehta find in the slums? He found that people actually wanted to be there. He found that families enjoyed living together. He found that the life in the slums, the tightly knit communities and groups of children and close proximity to the outdoors and to the other families in the area, was actually very similar to life in traditional Indian villages, that those who came to the city to seek work were able to recreate agrarian communities in the slums of the city. He even found that a good deal of people living in the slums, such as one gregarious computer programmer, had plenty of money to get out, but the poorly constructed buildings and isolation inherent in “luxury” flat living in the subcontinent were completely unappealing to these people.

Of course there is poverty, and of course it is unhygienic to use the very same waters the gleaming and golden feces of rich is deposited in on a daily basis to wash clothes, take bathes, and cook with. There is disease, starvation, and crime. But the simple fact of it all is that life goes on, and many of Mumbai’s slum dwellers are simply content with that.

So now let’s bring this back around to Bangladesh: Unaffordable luxury flats, and a city filled with people making, to reiterate, $4 a day. All sources say that Dhaka has a slowly growing, very stable middle class. It’s quite possible that some of these middle class citizens live in the slums of the city.

If nothing else, slums offer a measure of security, because everyone knows everyone’s business and looks out for one another. Protection in numbers. And protection from crime seems to be important in Dhaka: A headline on a prominent Bangladeshi Real Estate Boom website reads “If we fall asleep, the gangs steal our children”. What you really have in Dhaka then is a city exploding with the poor, filled with thousands of near-empty housing developments that most people in the city don’t even want to live in. Indeed, the majority of REHAB’s customers seem to be wealthy Bangladeshi’s living overseas on the market for a place to stay when visiting home. But isn’t that what hotels are for?

Top from left (A) Bagladesh, inside of India (B) Slums of Dhaka (C) A typical residential real estate projection (D) Floods in downtown Dhaka

Then there are the natural disasters. Pretty much the entire country is a floodplain. Every year, Bangladesh is battered by cyclones, monsoons, and flash floods. The 1970 Bhola cyclone destroyed large chunks of Dhaka. The cyclone was one of the worst natural disasters of modern times, killing over 500,000 people. Bhola left half of Dhaka underwater, and displaced more than a million residents.

While Bhola is an extreme example, the country floods on an annual basis. Bangladesh is hammered repeatedly by natural disasters, while REHAB goes about building billions of dollars of structurally suspect residential estates that tower dozens of floors above the city floor. Rather than focusing on building affordable housing that will be quickly filled by Dhaka’s many lower class residents, housing that will protect these people from the elements, REHAB is busy building thousands of tower blocks that will like crumble to dust if another Bhola-like disaster. According to REHAB’s own statistics, 500,000 buildings need be demolished in the near future, as construction standards are neither being overseen by governmental agencies nor adhered to by builders.

So but really what does all of this have to do with you? Even in a straight shot from Miami—the two cities are only two latitudinal degrees apart—Bangladesh is almost 9000 miles from the United States. 160 some odd million people is a lot, but Bangladesh is literally engulfed by India, a country with more than a billion people, millions of whose descendents and relatives live in the United States. So what’s the big deal with an ill-planned real estate boom in Bangladesh?

The Bangladeshi Real Estate boom is important to Americans, and especially young, college-aged Americans, not because of what it is, but because of what it represents. Bangladesh has, like a number of developing nations, taken to Western capitalism like a piglet to a teat. The grand monuments and explosive proliferation of infrastructure mimics the luster of cities like New York, London, and Berlin. Yet unlike those cities, Dhaka’s enormous physical presence has neither a sound social nor economic foundation. Bangladesh has adhered to the very dangerous Field of Dreams school of capitalism: If you build it, they will come.

What exactly is this idea? It’s the notion that by creating the proper visible component to capitalism—i.e. the correct image—a sound capitalist economy will suddenly appear, a middle class will emerge, social mobility will become the norm, and the country will move forward. And where did this idea come from? From the west, and in particular America and its fight against the Evil Empire of Communism.

With the advent of television in the 1950’s, the United States began propagating an image of democracy and capitalism that was solely based on the cosmetic tendencies of American society. The image was, and still is, inherently false, not only because it shows a nation of smiling happy white people who all have TVs, homes, cars, and happy children who plays baseball, but also because it ignores the 175 years America needed to get to that point. It ignores the two World Wars, the one civil war, the revolutionary war, and all of our societal woes. It ignores slavery, racism, inequity, and the fact that skyscrapers didn’t appear overnight, only actually appeared after a certain measure of economic success and stability had been achieved, were in fact directly resultant of that financial success and stability.

Most of all, this image of capitalism, which has been taken to so lovingly by nations like Bangladesh, ignores the most cardinal rule of any socialized capitalist nation that we have come to learn over the course of more than 200 hard years: society must be built from the ground up. Capitalism is a pyramid, and the top of that pyramid will not stand unless its foundation is strongest, widest part of the structure. What creates a strong, robust, healthy foundation for society? A well employed, well fed, well paid, and healthy working class. A city with 400,000 rickshaw drivers living on $4 a day or less is no such place.

Now of course it’s possible that even this analysis of an image and its repercussions is cosmetic in-and-of itself. The Mughal Empire ruled in a wide swath from Afghanistan to Burma, engulfing what is now Bangladesh, from 1526–1858. Among its countless monuments to power are the Taj Mahal and the Red Fort of Delhi. Other regional empires, like the Maurya, left monuments that still stand on the subcontinent.

Elsewhere in the world, the Egyptians, Mayans, and Greeks all erected enormous monuments to their power. Ditto for the Romans, Aztecs, Babylonians, and Javanese. These structures, just like modern skyscrapers and urban infrastructure, created a bold and intimidating image of power that left their beholders stricken with awe. Perhaps then it is human nature to create an image of power, either in an effort to reiterate that power or through sheer will bring it to fruition.

Thousands of years of human misery have taught us that a new image is required if the world is to have a bright future. The exposed underbelly of New Orleans in a post-Katrina world attests to this. The global financial crisis attests to this. The BP disaster attests to this. If there is to be a future for mankind that we will actually want to populate with our progeny, it is up to the young people of the world to create a new vision of life, a new vision of socialized democracy that is realistic, workable, and user-friendly. An image based on attending to the needs of a society, not simply an elite class.

Dhaka is a city divided. A city of near-empty testaments to a non-existent socioeconomic stability, a city of rickshaw drivers and DVD bootleggers living in slums and shacks. The Bangladeshi Real Estate Explosion stands more than anything as a challenge to college students the world over, and especially in developed nations like the United States: the future is yours. Reconcile this divide. Do us proud.

Authors Note: This article was originally intended for publication in College Gentleman Magazine, hence the paragraphs at the end about what this has to do with "you." The magazine opted to go with another piece I wrote about the choices implicit in doing drugs, and that will be on newsstands at Barnes & Noble and Borders next month, if you're interested in reading it.

This post first appeared on Weird News From Japan, please read the originial post: here

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The Thing About Real Estate in Bangladesh


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