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ABSTRACT
Since the 1990s, the Tanzanian public housing authority, the National Housing Corporation (NHC), has been changing its goal, from prioritizing delivery of affordable housing, to becoming a leading commercial and residential real estate developer. This happens against a backdrop of market-based reform and the state’s growing reliance on private markets to support urban development. In this paper, we look at the impact of NHC’s new approach and its effect on housing production and every day practice in Dar es Salaam. The analysis is based on a case study of two new NHC middle to high-income development projects and housing practice in the neighbourhoods surrounding these projects. Analysis is informed by semi-structured interviews, and project and site investigation. Findings indicate that currently, NHC operates like a private corporation, prioritizing market-rate developments over low-income housing projects, and promoting segregated developments based on land value criteria, while also lacking protocols regarding its trickling down approach. High input costs and declining state subsidies are some of the factors mentioned as a challenge towards meeting the housing needs of moderate to low-income households. The paper contributes to the international debate concerning the state’s adoption of business-like approaches to housing production and the affordability crisis.
Acknowledgements
We owe our gratitude to the NHC employees and residents of Makumbusho, Tandale and Mwananyamala for the interviews that supported this research. We are also thankful to IHSS Assistant Research Fellow Albert Nyiti and research assistants Emmanuel Njavike and Yoktan Nyondwi for their invaluable support during site visits, interviews, transcription and translation. We are grateful to the editors at IJUS, Professors George Galster and Kwan Ok Lee, and the anonymous reviewers for their constructive and careful review of this article and for organizing this special issue.
Disclosure statement
No potential conflict of interest was reported by the author(s).
Notes
1 Between 2003 and 2008 there was an eight fold increase in the value of housing development contracts between the Brazilian Bank for Savings and Real Estate Finance and housing contractors for different levels of affordable housing projects (Shimbo, Citation2010). These were directed primarily to the largest construction companies. Only 3.5% of the production were carried out by housing cooperatives (Cardoso & Aragão, Citation2012).
2 This definition lacks in the Tanzanian regulatory framework that focus on the notion of affordable housing, which is defined as housing that is ‘appropriate and accessible at no more than 30% of the household income’ (MLHHSD, Citation2018, v). As we will see NHC’s current threshold for low income groups are those earning an average of 1 million Tanzanian Shillings (TZS) per month or 430 United States Dollar (USD), which is the segments targeted by NHC’s affordable housing developments. This level of earnings is above the average of almost 95% of Tanzanian households, according to data from the Tanzanian Housing Market Survey (BOT, Citation2012), further discussed.
3 Other public institutions such as the Watumisi Housing Company (WHC) and the Tanzania Building Agency (TBA) build housing for middle to high-income groups, for public sector employees and for the private market (MLHHSD, Citation2018).
4 Throughout the paper, the interviews with NHC development officers are referred as ‘interviews,’ followed by the date when these were conducted.
5 As represented by a 65% drop in the value of real wages between 1979 and 1984, while consumer prices increased tenfold between 1976 and 1986 (Tripp 1990 in Lugalla Citation1997).
6 In this context of steady economic growth, the Tanzanian government has planned to increase the real estate sector’s share of the GDP to 4% (Delmendo, Citation2019). Public pensions have invested in real estate, contributing to a construction and property price boom in 2010–15 (Owens, Citation2014). Infrastructure investment has been focused on large scale projects, and less so on neighborhood level housing and urban development projects that require coordination with local government authorities.
7 The Tanzania Household Budget Survey (HBS) provides data on income and poverty in the country, based on the monetary value of a poverty line, subdivided in food poverty line, and the basic needs poverty line. The former is based on the monetary value of a minimum food basket containing 2,200 kilocalories per adult per day for one month. The latter adds an allowance for basic non-food necessities such as clothes, transportation, education and health, but not rent and other household expenditures (URT, Citation2019, p. 7).
8 While individual savings fund the initial phase of home building, revenues from rented rooms pays for home renovation and expansion of the rental stock (Sheuya, Citation2007).
9 Recently, Tanzania’s largest ever land provision scheme, the 20,000 plots program, implemented in Dar es Salaam, excluded low-income households on the basis that this group could not comply with a recovery period of just one year. The program drove up land price up more than 20 times since 2004, ‘increasing poverty among poor land owners’ (Kironde, Citation2015, p. 358).
10 At today’s exchange rate of 1 U$ = 2,315 TZS.
11 At an exchange rate of 1 U$ = 1,560 TZS (BOT, Citation2012).
12 Between 1985 and 2003, the number of informal settlements in Dar es Salaam more than tripled, from 40 to 150 in total. By 2003 it was estimated that unplanned settlements cover 65% of the city’s built up area (Kombe, Citation2005).
13 These are approximate United State Dollar figures, originated from the conversion of Tanzanian Shillings in US Dollar. Source for Tanzanian Shilling Figures, NHC (2017).
14 As purely commercial operations, there are no eligibility requirement to buy these types of property from NHC.
15 Other developments following similar model include the Dar es Salaam Kawe Residence and Golden Premiere Residence, also in central Dar es Salaam.
16 The Mwongoso Housing Estate is an example of an NHC development located 20 km from Dar es Salaam’s CBD. However, by offering new houses for sale even these projects are unaffordable to the population of lowest income.
17 The revoking of pre-sale contracts on residential apartments at Morocco Square indicates that the project is unaffordable even to Dar es Salaam’s high-income buyers.