Transcript ASSESSMENT OF HOUSING FINANCE CAPACITY AND NEEDS OF HOUSEHOLDS IN INFORMAL SETTLEMENTS

ASSESSMENT OF HOUSING FINANCE
CAPACITY AND NEEDS OF HOUSEHOLDS IN
INFORMAL SETTLEMENTS
SOCIO-ECONOMIC STUDIES IN
MWANANYAMALA KISIWANI, BUGURUNI
MNYAMANI, AND MAKANGARAWE INFORMAL
SETTLEMENTS IN
DAR ES SALAAM, TANZANIA
PRESENTATION TO AUHF-AGM SEPTEMBER 21, 2007
TUMSIFU JONAS NNKYA
ARDHI UNIVERSITY, DAR ES SALAAM
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TANZANIA
• Total population: 35 million people
• About 30% live in urban places where the
average annual growth rate is 4.5%
• 30% of the urban population live in Dar es
Salaam City
• All the land in Tanzania is state owned
• Formal access to urban land is thus through
granted right of occupancy for 33 or 99 years
government lease
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INFORMAL SETTLEMENTS IN DAR ES SALAAM CITY
• Habitat for 70-80% of the 3.5 million city residents
(different social and economic status)
• Recognized and earmarked for infrastructure upgrading
since 1972
• Permanent incrementally built houses as a result of
secure land tenure
• Modest infrastructure upgrading through individual
initiatives, sometimes in collaboration with local
authorities
• Property registration and issuance of residential license
(2004); infrastructure upgrading and regularization to
follow
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COVERAGE OF INFORMAL SETTLEMENTS
IN DAR ES SALAAM CITY
Formal and Informal Housing in Dar es Salaam
Legend:
Formal housing land
To
Bagamoyo
Informal housing land
Mbweni
Forest
Bunju
Boko
0
10
20
Meters
Tageta
INDIAN
Cement
Factory
OCEAN
Pande
Forest
Reserve
Mbezi
Goba
Magawe
Mpiji
Makongo
Oysterbay
Kiluvya
Mbezi
Kibamba
Kimara
To Morogoro
Ubungo
Kwembe
Segerea
Tabata
Buguruni
Buguruni
Mnyamani
Mnyamani
Kinyerezi
Ukonga
Mbwamaji
Vingunguti
TRC
Pugu
Kajiungeni
Gongo la Mboto
Yombo
Vituka
Kitunda
Mkize
Rangi Tatu
Chamazi
Mwanamsekwe
Kongowe
To
Kisarawe
Msongola
To
Kisarawe
Source:Kyessi 2002, based on 1992 aerial photograph
Gezaulole
Mbagala
Majohe
TAZARA
Mazimbini
Mtoni
Kijichi
Mbande
Vikindu
Forest
Reserve
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To
Kilwa
A TYPICAL INFORMAL SETTLEMENT SHOWING
FORMALIZED PROPERTY BOUNDARIES
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A TYPICAL MULTI-FAMILY (6 ROOMS) SWAHILI HOUSE
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ONE FAMILY HOUSE
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INTRODUCTION
• Results from a housing survey of 3 informal settlements
• Data on the household capacity and demand for housing
finance
• Purpose: to inform the development of appropriate
housing finance products, a project by African Union for
Housing Finance – AUHF with funding by Cities Alliance
• Selection of settlements
• There are differences which influence the demand and
capacity for housing finance: Proximity to employment
and income opportunities; Economic vibrancy; Tenure
status of the residents; Level of investments in housing
and hence quality
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INTRODUCTION (cont.)
• MWANANYAMALA KISIWANI – a fair mixture of
different house types, habitat for all tenure groups,
substantial economic activities
• BUGURUNI MNYAMANI – a higher economic vibrancy,
proximity to CBD and other employment centres
• MAKANGARAWE – urban fringe settlement
• Sample size: 380 households
• 8 enumerators trained, tested questionnaire
• Selection of houses from each housing cluster
facilitated by up to date maps and property registers
• Interviewed all households in the selected houses
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FINDINGS: HOUSEHOLDS DEMONSTRATED CAPACITY
TO FINANCE HOUSING
1.
2.
3.
4.
5.
Land for housing was bought: 97% of all house
owners bought land for building
Houses were permanent: 85% of all the houses were
built of sand-cement blocks, 90% of them with sandcement floor and 97% roofed with CI sheets
Houses had basic facilities: a private or shared
cooking space, toilet, bathroom, electricity and
connection to clean water (14%), from vendors or
neighbours(68%), wells (12%)
Household savings was the main source of
finance: 87% of all the houses were financed by
savings
Savings financed also available infrastructure
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HOUSEHOLDS HAD CAPACITY TO FINANCE HOUSING
(cont…)
6. Informal and formal employment activities were the
sources of income for 65% and 35% of households
respectively regardless of tenure status
7. Average declared household income was Tshs. 132,175
while expenditure was Tsh. 198,907
8. The feeling of security was the corner stone of the
demonstrated capacity to finance housing
9. This was most likely the outcome of the Government
policy in support of informal settlements over the last 35
years
10. There was a huge unexploited potential for housing
finance upgrading
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Table 1: HOUSEHOLD SAVINGS AS THE MAIN SOURCE
OF HOUSING FINANCE
Source
Mwananyamala
%
Buguruni
%
Makangarawe
%
Average
%
Savings and
selling of assets
87
84
90
87
Friends and
relatives
1
5
0
2
Loan from
employer
3
0
5
2.6
Loan from
SACCOS
3
0
5
2.6
Others
6
11
0
5.6
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Table 2: HOUSEHOLD MONTHLY INCOME BY TENURE
STATUS
(Tsh. 1,250 was equivalent to US$ 1 at the time of survey)
Renter
Household
Owner
Household
Overall
Settlement
Mean
(Tsh)
(thousands)
Median
(Tsh)
(thousands)
Mean
(Tsh)
(thousands)
Median
(Tsh)
(thousands)
Mean
(Tsh)
(thousands)
Median
(Tsh)
(thousands)
Mwananyamala
118.3
90.0
154.7
120.0
129.7
100.0
Buguruni
121.7
90.0
151.1
120.0
129.0
97.5
Makanga
rawe
122.1
87.5
197..2
96.0
142.6
90.0
Overall
119.8
90.0
162.1
110.0
132.2
100.0
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Table 3: COMBINED EXPENDITURE FIGURES WERE MUCH
HIGHER
THAN INCOME, SUGGESTING UNDECLARED INCOME
Buguruni
(Tsh.)
Makangarawe
(Tsh.)
Mwananyamala
(Tsh.)
Average of
all
(Tsh.)
Average
income
129,039
142,591
129,692
132,175
Average
expenditure
302,782
208,137
160,999
198,907
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Table 4: SIZE OF A LOAN HOUSEHOLDS WISHED TO BORROW
Amount
(Tsh.)
BUGURUNI
%
MAKANGARAWE %
MWANANYAMALA %
AVERAGE
OF ALL %
Up to 1,0000
2.6
2.6
5.3
2.3
>1,000,000 10,000,000
28.9
48.1
46.6
43.5
>5,000,00010,000,000
27.6
29.9
21.5
24.4
>10,000,000
– 20,000,000
22.4
13.0
15.9
16.6
>20,000,000
18.4
3.9
9.1
10.2
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Table 5: CAPACITY FOR UPFRONT PAYMENT
Amount
(Tsh.)
BUGURUNI
%
MAKANGARAWE %
MWANANYAMALA %
AVERAGE
OF ALL %
10,000 50,000
31.4
44.2
29.0
32.7
>50,000 100,000
14.4
13.0
21.2
18.1
>100,000 200,000
19.7
13.0
16.3
16.4
>200,000 –
500,000
13.2
10.4
15.9
11.9
>500,000 –
1,000,000
10.4
9.1
8.7
9.2
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Table 6: AMOUNT THAT HOUSHOLDS WERE ABLE AND WILLING
TO PAY MONTHLY TO SERVICE A HOUSING LOAN
Monthly
repayment
(Tsh)
Buguruni
%
Makangarawe
%
Mwananyamala
%
Average of all
%
Up to 15,000
30.1
42.9
22.4
28.0
>15,000 to
50,000
52.6
42.9
56.8
53.3
>50,000 to
100,000
7.9
7.8
13.6
11.5
Above
100,000
5.2
3.9
3.0
3.7
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CONCLUSION
•
The relatively good quality of houses and infrastructure in the informal
settlements demonstrates a capacity to finance housing and feeling of
security to invest in housing.
•
The demonstrated capacity to finance housing constitute a ‘building block’
for an innovative, affordable and sustainable housing finance system.
•
Thus, there is a need to recognize, organize and build on this capacity as a
way of addressing the thorny issue of housing finance for the majority of
Tanzanians.
•
However, appropriate housing finance upgrading strategy and action plan
need to recognize the peculiar characteristics of the housing markets: the
incremental and subsistence nature of housing delivery; the informal
sources of employment and income; dynamic affordability and willingness to
borrow and repay; and savings in form of building materials.
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AUTHOR’S BIO DATA
• Tumsifu Jonas Nnkya (PhD), a Tanzania citizen educated as town
planner, has 27 years of experience as a trainer, researcher and
consultant in urban development planning, urban design and
housing.
He has published papers, books and contributed to several UNHabitat publications as a member of the UN-Habitat Advisory Board
on Human Settlements Research Network (HS-Net). His
forthcoming planning practice research based publications include:
Collaborative Turn in Planning Practice, and Why Planning Does
Not Work in Tanzania.
As a consultant and advisor, Dr. Nnkya has worked for the
Government, International Development Agencies, Embassies and
participated in several national and global meetings. He is a
member of several local and international professional associations
and policy making bodies.
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