The article reviews the Bangladesh leather processing industries’ relocation plan by applying the Social Theories of the City and the three environmental economics theories—Willingness to Pay, Pigovian Tax and Hedonic Pricing Method on the data collected by a questionnaire survey among the industries’ owners and from the original project documents. Results prove the strong unwillingness of leather industries’ owners to relocate and pay for relocation, failure at imposing Pigovian tax and the high hedonic prices of the houses including threats to inhabitants’ health in the redeveloped residential area. In addition to high subsidy and compensation, historic growth trends and potential risks of flood and surface water resource pollution of Dhaka defy sustainability issues. Considering three consecutive failures to meet the relocation deadlines, these results claim that redeveloping an environment friendly leather processing zone at the present location will ensure sustainable urban development.
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