It is claimed that low-income people in Dhaka city do not have the financial ability to enjoy a decent housing environment. There is a clear lack of knowledge on how low-income people, drawing upon their available income together and support from formal financial institutions, could afford housing. It is commonly considered that their access to formal financial means is largely hindered by their poor financial status, along with the absence of any form of land tenure security. The case of this study demonstrates, on the contrary, the adequate financial ability of the urban poor when it comes to meeting rent and payments for other necessary services. This study therefore primarily responds to the critical issue of whether the government is unaware of informal housing practices, or is simply ignorant of low-income housing provision.

In this study, perspectives on change are analyzed to comprehend the obstacles and challenges embedded within the housing organizations of Dhaka City. Within the local governance paradigm, the concepts of deliberative dialogue and partnership are explored to reveal both the resources rooted in ‘informal’ low-income housing practices, and the resources at stake for the ‘formal’ housing gatekeepers. Different land tenure security options are explored to understand their compatibility with the informal nature of low-income housing. The theory of social business is critically reviewed and used to examine whether low-income affordable housing could be seen as a product resulting from partnerships between vested actors, for whom the low-income community could be considered both a beneficiary and a partner. This study suggests that outside the boundary of ‘formal’ housing, there is an unexplored and functional ‘informal’ housing market where de facto owners purchase ‘business tenure security’ from the slum lords, while de facto tenants buy ‘house rental tenure security’ in exchange for regular rental payments. Within this informality, an innovative financial organization (the Jhilpar Cooperative) has emerged as a creative platform for business investment. This study reveals that Jhilpar’s inhabitants pay more than 30 percent of their monthly income for housing. As an absolute value, this is more than what is being paid by middle-class – and even many high-income -people. The slum inhabitants also pay more for a limited supply of basic services, such as electricity.