Within Thimphu Thromde, those residing in Hejo-Samtenling area bear the highest median rent burden, at 48 percent of the household income of Nu 20,000 monthly.
This means that households (HH) with a median income of Nu 20,000 in the area pay a rent of Nu 9,500 monthly.
This is according to a Housing and Market Demand Survey published in 2021, which surveyed more than 68,000 households in Thimphu Thromde.
The Hejo-Samtenling area is followed by those residing in Taba, bearing a rent burden of 45 percent (Nu 9,000 monthly), with a median household income of Nu 20,000.
Subsequently, the Thimphu core area, Changtagang, and Jungshina-Pamtsho follow with a rent burden of 43 percent.
According to the National Housing Policy, 2020, internationally, a baseline of 30 percent of the household income is taken as the maximum proportion of income available for payment towards housing rent.
Further, the Policy defines affordability as access to housing whereby an occupant pays less than 30 percent of monthly household income towards rental expense or servicing of mortgages and/or loans.
Currently, the median monthly rent in Thimphu Thromde stands at Nu 8,000 with a median household income of Nu 22,000. This results in a rent burden of 37 percent.
According to the report, at the national level, housing rental cost as a percentage of household income appears to be affordable.
It adds that with a monthly median household income of Nu 20,000 and rental cost of Nu 3,770, it works out at around 19 percent. “However, the picture changes significantly when only the private housing units are considered. The median rental cost of private housing amounts to 27.5 percent, while the median rent for the other rental housing types is all below the overall rent to HH income ratio.”
“This is because the rental cost of housing provided by employers and the NHDCL housing is heavily subsidised by the employers and the government, respectively. The NPPF housing units have higher rental costs but the rental cost percentage is still lower, due to the higher median household income.”
The report states that analysis shows that overall, only the tenants in larger towns of Phuentsholing, Thimphu, Paro, and Gelephu Thromde experience a rent burden.
Today, the high cost of land, construction materials, and labour and development finance are some of the major issues affecting housing affordability.
Earlier, Works and Human Settlement Lyonpo Dorji Tshering told Kuensel that three bills: Housing Bill, Construction Bill and the Spatial Planning Bill, would be presented to Parliament to solve many housing-related issues.
However, the bills have been shelved after the Cabinet felt that more review and research were required.
Among the many recommendations made in the report was making household income as one of the major criteria to be eligible for allotment of NHDCL rather than the sector of employment.