Analysis of Housing Policies in Namibia

CHAPTER FOUR: DATA PRESENTATION AND ANALYSIS

4.1 Introduction

This chapter will present the findings of the research, grounded on data analysis and case studies. The findings are therefore a collection of eight different key findings:

• The Namibian Housing situation
• Research for housing backlog in Windhoek
• The mass housing project
• The possible positive outcomes
• The main challenges
• Determiner of success

4.2 The Windhoek Housing situation

On the housing situation in Windhoek, house prices have sky rocketed by over a 150% in the past 10 years and have been a high discussion both socially and economically in Namibia. With high demands and low supply, Windhoek is experiencing a backlog of about 27 000 houses making up the biggest proportion of the current 100 000 housing backlog in the country. This situation has been labelled with high selling prices and low supply in both housing and serviced land. 70% of the Windhoek population lives in informally settlement with no services annexure to the land. Past programmes setup by the government such as the Build Together and Shack dwellers (non-governmental) have not met their set targets due to commitments from stakeholders involved. All this factors make it very difficult for the country to meet its social needs and millennium challenge goals. A large part of the Windhoek population living in poverty and with lacks access to essential services and with a backlog of income earners between N$ 0 and$ 1,500 per month have a backlog of about 15,000 houses and followed by the N$ 1,501 to N$ 4,600 earners who have a backlog of about 8,000 houses. The N $ 4,601 to N$ 10,500 has a backlog of 3500 houses and the higher income earners N$ 10,501 plus has a backlog of just 500.

4.3 Research for housing backlog in Windhoek

Factors that determined the housing prices in Windhoek are divided into the demand factors, the supply factors and other factors such as valuators and estate agents.

a) Demand factors

The demand for housing is fuelled by factors such as foreign cash-buyers, the increasing in urbanisation after independence, the upper income class buying properties for investment purposes, and increase of rental prices of housing.

b) Supply factors

The supply of housing is low because of the following factors; there is a scarcity of serviced land in major city and the increase in the cost of materials and construction. The supply for the poor has in the past decade been on a decline while the supply for the rich been on an incline.

c) Other factors

The other factors include property valuators who sometimes over value properties, real estate agents and developers who inflate house prices to increase profit. Other factors included are high property transfer fees, auctions which hurt the “willing buyer, willing seller” free market.

4.4 The Mass Housing Project

The mass housing programme was launch in 2013, a programme under the Ministry of Regional and Local Government, Housing and Rural Development through the National Housing Enterprises to provide 10,278 houses yearly and 185,000 houses over the next 18 years. The programme is design to tackle the backlog of affordable housing and also positively impact other sector of the national markets. This initiation is also important for the country to commit itself to work towards the realization of Millennium Development Goals (MDGs) in concerted efforts with the rest of the global community and to achieve vision 2030.

The Programme Key Strategic Goals are to:

• To provide access to affordable housing to the Namibian people;
• Economic empowerment through ownership of a tradable asset (a house) that can be used as security for further wealth and asset generation at households level; and
• To creating jobs and stimulating economic growth.

Project Implementation and Management Modalities

A Program Management Structure (PMS) will be established to manage and coordinate the various facets of this program composed of the representation of the Directorate of Housing, NHE, and other expert management service providers as the need may be. Each implementing agency will develop a detailed implementation plan and strategy pertaining to specific sub-program activities that fall within their jurisdictions. The Property Management of the NHE will be strengthen to manage all rental accommodation facilities that will be built under this program. Formal and legally enforceable contracts will be entered into with all institutions involved setting clear performance standards and consequences inter-alia. PMS will put in place overall operational guidelines for smooth program implementation. This will include the requirement and procedures for local authorities to give land for the purpose of this program implementation

A program reporting, monitoring and evaluation system will be put in place by the Program Management Structure a stakeholder engagement and communication plan will also be developed by the PMS. All program implementing agencies will be held accountable and operate within strict legally enforceable contractual arrangements that will be concluded beforehand; needs, desirability and affordability analyses will be conducted before any project is executed with the view to establish the purchasing power and the accommodation types (low or medium, and or rental accommodation) required in such a market.

The NHE will acts as the principle agent for this project, in charge with implementing, administrative and management the mass housing project. NHE needs to make sure that the project is implemented according to the government specifications but will be guided by the Ministry of Regional and Local Government, Housing and Rural Development. The ministry will also act as a financer for the project. The other actor in this this programme is the city of Windhoek which acts as a land allocator and servicer of the land. The programmes will be regulated by the Blueprint on Mass Housing Development 2013, which provides a strategic and policy framework within which the programme is expected to be undertaken.

The Implementation Strategy

Four core interventions will be outline to achieve the program strategic objectives: This is to increased financial investment as a result of more housing production and providing enough access to people in need of shelter. A mix of private and public capital as well as household’s savings will constitute the investment regime of the program.

Key Program Outputs and Investment for Windhoek

• Total number of houses to be built: 30% of the Project total 55 500
• Total Investment: N$ 15 billion
• Annual Investment: N$ 400 million
• Land Servicing Cost per plot: N$ 75 000
• Housing Construction Cost: N$ 150 000 - 300 000
• Informal Settlements Upgrading: 20 000 households
• Number of houses to be built in the first two years: 1,191
• Timeframe: 18 years in line with Vision 2030

Funding Model

The funding model of this programme consists of a mix of financing modalities tailor-made to resource the seven sub-programs in accordance with their socio-economic nature and feasibilities. The model consists of four major sources of funding: the government grants and subsidies, private-private partnerships, debt financing.

Types of Houses

- Credit-linked housing

- Rental accommodation

- Social housing

- People housing processes

- Detached or semi-detached, sectional titles and high rise

Key Enablers

For the programme to operate efficiently and effectively, the following keys should be meant:

• Land and service infrastructure availability, local municipality should ensure that is enough land and serviced infrastructures or at least land allocated for the programme.
• Technical capacity within the implementing institutions and agencies, meaning that the implementing agencies and institutes should have the technical ability to carry out this project.
• Legislatives, policies and regulation regard this programme should be followed.
• The should be Continuous political commitment, leadership and support from the government.
• The government should subside for the low income earners.
• The local public should be involved in the programme from start to finish.

Source: blueprint on mass housing development

4.5 The possible positive outcomes

The mass housing programme may have many positive outcomes if the set target are met and the program is well run. Other than building just 185 000 houses, it will create 25 000 jobs in the process, it will create Public Private Partnerships, it will outsource most of the constructions work to local contractors. Create social welfare and environment sustainability. It will also have a positive impact on:

Health Outcomes, the programme can improve health outcomes for its residents by reducing exposure to hazards in poor quality housing, improving neighbourhood conditions, and reducing budgetary constraints that prevent spending on health insurance and nutrition. Education Outcomes, the programme has the potential to significantly influence education outcomes for residents and communities. And on property Values, affordable housing does not definitively have a positive or negative impact on nearby property values.

The project at large will create positive externalities to other sectors within the Namibian economy as depicted by the housing sector development impact which include:

• Sustainable communities for economic growth and to attained political objectives.
• Contractors for skill development and job creation,
• Professional services from planers, surveyors, engineers, conveyances and estate agents,
• Suppliers to increase sales, investment growth, increase tax revenue and employ more people,
• People housing processes for own distribution and reduce development cost,
• Financiers to finance development, finance mortgages and to increase loan books,
• Regional and local authorities to increase revenue bases, municipal services infrastructure, investor attraction and sustainable urban development,
• Public sector to bring government services closer to the people and other public amenities and,
• Increase housing output in Namibia.

4.6 The main challenges

The main challenges the mass housing may face are:

Availability

The number of individuals eligible for mass housing project might exceed the number of available units.

Housing Quality

The to-be housing units may not be up to standard housing quality due to the mass production and inexperience local contractors.

Mismanagement of Funds

The programme might be at a high risk of corruption, due to lack of independent regulation and transparent of the procurement process.

Neighbourhood Crime

The programme is also at risk of crime if public services such as police stations are not integrated.

4.7 Determiners of Success for the project

• The programme should be Economic and financial sustainability
• Integrated development approach with other national goals
• The project should be able to pay for itself and recover Cost (market , commercial driven model)
• The programme should be Affordability
• Macro-economic and market stability
• The programme is to target Local ownership
• The programme should incorporate the (PPPPs) people public private partnership
• Strategic economic empowerment of local companies with conponents such as BEE andTIPEEG
• The programme should incorporate both Social and economic inclusion
• The programme should be efficientand cost-effective (value for money)
• The programmes should be able to enhance Skills and capacity growth

CHAPTER FIVE FINDINGS, CONCLUSION AND RECOMMENDATION

5.1 Introduction

Housing is a necessity for any nation, as it brings about development and social well-being. The concept of Mass Housing is to provide for the lack of housing a nation or city may face, in many cases it is usually a solution but often also come along with setback created either by the system or the implementing body.

The situation of housing in Windhoek, Namibia has been study many times and it has shown negative result in term of affordability, availability and sustainability. In trying to answer the question of why the mass housing programme might be the solution for the backlog of housing in Windhoek, an investigation was made on the implementing policy, the implementing parties and potential beneficial.

5.2 Research Findings

Reasons for the backlogs

The backlog of housing in Windhoek has reached extraordinary levels in the demand; with almost 30 000 families and individuals in need of a house. The reason for the backlog is contributed due to the following factors:

a) Demand factors

The demand for housing is fuelled by factors such as foreign cash-buyers, the increasing in urbanisation after independence, the upper income class buying properties for investment purposes, and increase of rental prices of housing.

b) Supply factors

The supply of housing is low because of the following factors; there is a scarcity of serviced land in major city and the increase in the cost of materials and construction. The supply for the poor has in the past decade been on a decline while the supply for the rich been on an incline.

c) Other factors

The other factors include property valuators who sometimes over value properties, real estate agents and developers who inflate house prices to increase profit. Other factors included are high property transfer fees, auctions which hurt the “willing buyer, willing seller” free market.

The mass housing programme

The mass housing project, is under the Ministry of Regional and Local Government, Housing and Rural Development through the National Housing Enterprises to that was setup provide 10,278 houses yearly and 185,000 houses over the next 18 years. The programme is design to tackle the backlog of affordable housing and also positively impact other sector of the national markets.

The Programme Key Strategic Goals are to:

• To provide access to affordable housing to the Namibian people;
• Economic empowerment through ownership of a tradable asset (a house) that can be used as security for further wealth and asset generation at households level; and
• To creating jobs and stimulating economic growth.

Job Impact Assessment

Key Program Outputs and Investment for Windhoek

• Total number of houses to be built: 30% of the Project total 55 500
• Total Investment: N$ 15 billion
• Annual Investment: N$ 400 million
• Land Servicing Cost per plot: N$ 75 000
• Housing Construction Cost: N$ 150 000 - 300 000
• Informal Settlements Upgrading: 20 000 households
• Number of houses to be built in the first two years: 1191
• Timeframe: 18 years in line with Vision 2030

Types of Houses

• Credit-linked housing
• Rental accommodation
• Social housing
• People housing processes
• Detached or semi-detached,
• sectional titles
• high rise

Funding Model

The funding model of this programme consists of a mix of financing modalities tailor-made to resource the seven sub-programs in accordance with their socio-economic nature and feasibilities.

The model consists of four major sources of funding:

• Government grants
• Government subsidies,
• Private-private partnerships,
• Debt financing.