Kathmandu, May 2 -- The house where Aarati Chaudhary and her friends had been staying as tenants now lies demolished, its remains part of a three-storey building being cleared. Aarati, a bachelor's level student, pointed towards the site and said, "Moving from this house was no small struggle; we had to leave in the middle of the night."

After announcements through loudspeakers calling for the evacuation of the unplanned settlement along the banks of the Dhobi Khola in Anamnagar, Aarati and her roommates, Eliza and Archana Chaudhary, were gripped by panic. They worried about where to go and how to safeguard their belongings.

Originally from Bara, the three had been living in the settlement for the past two years. They knew the house was...