Hafizur Rahman, a private sector employee living in Mirpur 11, received a salary increment of Tk 1,500 in January 2024. The same month, his landlord raised his rent by Tk 2,000. The net result was a monthly deficit of Tk 500 — and that was before factoring in school admission costs for two children. Rahman's experience, documented by The Daily Star, is not exceptional. It is the defining economic condition of Bangladesh's rental majority: a population that faces the compound pressure of sustained consumer price inflation exceeding 9 percent alongside a rental market where landlords raise prices at will, where legal protections exist in name but not in practice, and where the gap between housing demand and supply gives property owners structural leverage that tenant protection legislation has done almost nothing to equalise.
Bangladesh's housing and rental crisis is not a new problem, but the economic conditions of 2023 through 2025 have compressed its consequences in ways that deserve systematic analysis. Consumer price inflation remained above 9 percent from mid-2022 until May 2025, according to Bangladesh Bureau of Statistics data, before moderating to above 8 percent. Against this background, house rent has risen for three consecutive quarters in fiscal year 2025-26. The House Rent Index reached 5.19 percent in the July-September 2025 quarter, a trajectory that — while slightly below the 5.91 percent recorded in the same quarter of 2024 — has abandoned the seasonal patterns that once allowed tenants to predict and plan for rent increases. "Typically, house rents tend to rise either at the beginning or the middle of the year. But that seasonal pattern is no longer holding," a BBS official told The Daily Star in December 2025. The rent increase cycle has become continuous.
The Legal Framework That Doesn't Work
Bangladesh's primary legal instrument for managing the rental market is the Premises Rent Control Act 1991, which replaced a 1986 ordinance and established a framework governing rental agreements, rent control, eviction procedures, and dispute resolution mechanisms. The Act's provisions are substantive on paper: it prohibits arbitrary rent increases during the term of a tenancy, requires written notice for any proposed increase with a reasonableness standard, establishes a Rent Controller to whom either party can bring disputes, and imposes restrictions on eviction without valid legal cause and proper process. A court order can be required before a tenant can be removed in disputed cases.
In practice, the Act has become a legal dead letter. SM Nazar Hossain, vice-president of the Consumers Association of Bangladesh — the country's leading consumer rights body — has stated publicly and repeatedly that the Act's ineffective implementation has produced a market characterised by chaos. "Although the Premises Rent Control Act was enacted many years ago, there is no implementation," he told The Daily Star. "If the law were enforced, rent levels could be controlled to some extent, but the government is not playing an effective role." Academic research at BUET confirms the same diagnosis: a 2013 study published in a research journal found that "the law's ineffective implementation has led to chaos and a strained relationship between landlords and tenants" and that "most house owners and tenants are unaware of the legislation."
The practical implications of the Act's non-enforcement are not subtle. Landlords routinely raise rents outside the legal procedures the Act prescribes. Tenants living in Dhaka reported to The Daily Star that landlords raise rents citing inflation, regardless of whether the term of the tenancy agreement permits it. One tenant in the July 2024 report noted that her agreement stipulated no increase until April 2025, "but he already increased the rent citing the persisting high inflation." The option to take a dispute to the Rent Controller is theoretical rather than practical for most tenants: the process requires time, legal knowledge, and willingness to jeopardise the ongoing landlord relationship that keeps a family housed — costs that systematically deter enforcement.
The Supply-Demand Arithmetic
The fundamental driver of Dhaka's rental market imbalance is structural: the city's population has grown faster than its formal housing supply for decades, creating conditions where landlords hold leverage that legislation alone cannot rebalance. UNDP data shows that over 17.4 million people reside in Dhaka, with continued rural-to-urban migration adding to the total. The government meets only 7 percent of the annual housing demand, with the private sector filling a large portion of the gap — but formal private housing supply is heavily weighted toward upper and middle-income segments. The World Bank has estimated that Bangladesh needs to build at least 8.5 million new houses in the next five years to address the existing urban shortage, with most of that demand concentrated in lower and lower-middle income groups.
The consequences of this imbalance are visible across income segments. At the upper end of the lower-middle bracket, a 1,000 square foot flat in Bhatara that cost Tk 15,000 per month in 2023 cost Tk 16,500 in early 2024, a Tk 1,500 increase that represents a 10 percent jump for a household not receiving a comparable salary increment. A graduate resident in Lalbagh sharing a three-room flat for Tk 21,600 per month found the rent hiked by Tk 2,000 in January 2024 — and rather than pay it, he and his roommates relocated to a smaller apartment that suited their new financial ceiling. Downward substitution — moving to smaller, lower-quality, or more remote housing when a landlord raises rent — is the revealed preference of the market. But it is not a solution: it displaces the pressure to a lower rung of the housing ladder, which in turn pushes the most vulnerable further toward informal settlements.
In the 2022 BBS Population and Housing Census, more than 200,000 households across both Dhaka City Corporation areas were registered as subletting — meaning tenants who rent from other tenants. Subtenants represented 7.64 percent of Dhaka's population, a figure that had risen by 2.73 percentage points, reflecting that more households were cutting their housing expenditure to manage inflationary pressure. This subletting data is a lagging indicator of market stress: it reflects the coping mechanism of families who cannot afford primary tenancy at prevailing market rates.
The Informal Settlement Population
The formal rental market's dysfunction sits atop a larger and less visible housing problem. Approximately one-third of Dhaka's population — around 5 to 6 million people — live in informal settlements, slums, and squatter communities across approximately 4,500 bastis scattered through the city. These populations include the garment workers who constitute the backbone of Bangladesh's export economy, domestic helpers, rickshaw pullers, small vendors, and day labourers whose work keeps the city running.
Residents of informal settlements exist outside the Rent Control Act's protections almost entirely. Without formal tenancy agreements — which are the prerequisite for accessing the Act's dispute resolution mechanisms — residents have no legal standing to challenge rent increases or resist eviction. The legal status of the land they occupy is typically disputed or informally allocated, meaning that the security of tenure that formal tenancy law presupposes simply does not exist. UNDP research found that slum residents in Dhaka pay approximately Tk 47 per square foot on average — a rate that is roughly twice the per-square-foot cost of formally tenanted housing in middle-class areas like Dhanmondi, reflecting the premium that informality and insecurity impose on the most vulnerable occupants.
The Korail fire of November 25, 2025, illustrated the governance failure structurally embedded in this situation. The fire destroyed approximately 1,500 homes in one of Dhaka's largest informal settlements, leaving thousands homeless. As an Institute of Development Studies analysis written by a BRAC University researcher noted, Korail "remains legally invisible with the residents living without tenure or formal rights to build or improve their homes, and prone to eviction." The IDS analysis described the legal ambiguity not as administrative failure but as deliberate political economy: "Informality allows the state to deny responsibility while maintaining control," embedding slum residents in networks of clientelism that make formal inclusion politically undesirable for the actors who benefit from the existing arrangement.
Economic Crisis as Accelerant
The economic conditions of 2023-2025 have amplified the housing sector's structural problems rather than creating them. Three years of sustained above-9-percent consumer inflation compressed the real incomes of fixed-salary workers — the civil servants, garment workers, private sector employees, and young professionals who constitute Dhaka's rental majority. The IMF loan programme that Bangladesh entered in January 2023 imposed fiscal conditions that constrained public expenditure expansion, including housing subsidies and public sector wage increases that might have partially offset inflationary pressure on tenants. The fourth IMF tranche was delayed in April 2025 pending fiscal reforms, adding to the uncertainty of the macroeconomic environment.
Factory closures between August 2024 and July 2025 — affecting approximately 100,000 workers according to government survey data — created a specific category of acute housing vulnerability: households that had been managing rental costs on one income suddenly faced arrears accumulation and potential eviction at a moment when their income had disappeared. For garment workers who had migrated to Dhaka and were renting near their factory, relocation following job loss is a cascading crisis: loss of work triggers potential loss of housing, which in turn makes re-employment harder.
The Consumers Association of Bangladesh has identified the power asymmetry at the heart of the crisis clearly. In labour-intensive and high-demand neighbourhoods — Mirpur, Demra, Ashulia, Gazipur — where garment factories concentrate their workforce and demand for low-income rental housing is highest, landlords know that the alternative to accepting a rent increase is finding a new place to live in a market where equivalent options are scarce. "As soon as demand rises, rents are increased immediately," Hossain told The Daily Star. "There is no system at all, no structured mechanism."
What Reform Would Require
The Dhaka North City Corporation has proposed area-wise rent charts — area-specific rent ranges for neighbourhoods like Gulshan, Mohammadpur, or Mirpur — that would give tenants reference points for assessing whether a proposed rent increase is within market norms. Hossain of the Consumers Association has endorsed the idea, with the addition that ward councillors should be empowered to mediate landlord-tenant disputes at the local level before they escalate to formal legal proceedings. These are sensible incremental measures, but they do not address the fundamental enforcement gap: Bangladesh already has a law that prohibits arbitrary rent increases, and that law has been systematically ignored for three decades. A new chart without a credible enforcement mechanism would produce similar results.
More structurally significant is the housing supply question. The government's 7 percent contribution to annual housing demand is not a viable long-term position for a city that is adding hundreds of thousands of residents annually. The National Housing Policy acknowledges the right of the urban poor to adequate housing, but implementation has repeatedly faltered — the Bhashantek Rehabilitation Project's documented mismanagement, in which flats built for slum dwellers were redirected to affluent buyers through ward councillor certification manipulation, is a case study in how subsidy capture defeats the redistributive intent of housing policy.
International experience suggests that the most effective path combines supply expansion — higher density zoning, public-private partnerships for affordable rental housing, rent-to-own schemes — with genuine enforcement of existing tenant protections through accessible dispute resolution mechanisms that do not require tenants to choose between legal action and continued housing. Bangladesh has the legal framework. What it has persistently lacked is the political will to enforce it against a landlord class that is economically powerful, socially influential, and well-represented in the institutional structures that would need to change.
For the millions of households currently navigating the rent-inflation squeeze of 2025, that structural reform remains a medium-term aspiration rather than immediate relief. The more immediate reality is the arithmetic of Hafizur Rahman's household budget: an income increment that was outpaced by a rent hike before the month was out, with school fees already paid and inflation still running above 8 percent.
WinTK covers economic policy, housing rights, and urban development in Bangladesh. For more business and economic analysis, explore our news section.
