Integrated Model of Affordable Housing Delivery for the City of Windhoek

Integrated Model of Affordable Housing Delivery for the City of Windhoek

Isaac Okoth Randa (Namibia University of Science and Technology, Windhoek, Namibia)
Copyright: © 2016 |Pages: 15
DOI: 10.4018/IJCESC.2016070101
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Abstract

Limited access to affordable and decent housing for the low-medium income households of Namibia, especially in Windhoek, is a major concern. This is evident as nearly 70 percent of the population are unable to access affordable housing. This situation is exacerbated by lack of an integrated framework for affordable housing delivery strategy. Adopting an interpretivist perspective, in depth literature review of published records, and using hybrid value chain model; this paper aims to identify an effective and efficient strategy for the delivery of affordable housing in Windhoek through the application of the stakeholder approach. Also, the paper intends to determine the appropriate division of roles between public, private and community institutions, and to suggest possible policy interventions necessary for a viable affordable housing delivery strategy. Though several non-integrated initiatives are operational in Windhoek, the joint Public-Private-Social-Sector Partnership model represents a new business model in the affordable housing sector.
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Introduction

In most cases, housing the poorest citizens in a society is the responsibility of the government through social or public housing programmes; but housing the low-middle income households requires market-based mechanisms. According to Zaefarian et al. (2015), market-based approaches usually develop business solutions in the form of new business models and products that are sold at prices affordable to the target consumers. The basis for market-based interventions to solve social problems finds support in the neoliberal economic governance paradigms revolving around private entrepreneurship, where the state contribution to economic development is primarily for building public confidence and the best entrepreneurial opportunities. For example, when public confidence is diminishing, the government’s role is articulated to provide economic stability through proper governance (Campbell, 2009). By providing a stable macroeconomic environment for economic growth, price stability, enforcing and defending property rights among others, the government assures private citizens that their counterparts in the marketplace are accountable. Hence market participants are encouraged to invest their resources in areas where they are most productive. This argument supports the Ministry of Regional and Local Government, Housing and Rural Development’s (MRLGHRD) (2009) stance in Namibia - that a properly functioning market economy, underpinned by a dense network of civic associations and overseen by a strong and accountable government, is the best framework for economic growth, prosperity and social development. The Namibian government is also a signatory to the Habitat II Agenda of 1996 which provides for an integrated framework to implement the Global Shelter Strategy. This strategy aims at influencing national housing policies to support the goal of providing adequate shelter for all (United Nations Centre for Human Settlements (UNCHS), 1997b). However, full reliance on market provision of affordable housing is at variance with the provisions of Habitat II Agenda of 1996, and thus, the need to redefine affordable housing. The Government of Namibia recognises and acknowledges the centrality of affordable housing in achieving national development priorities and millennium development goals, and subsequently, the socio-economic stability of the country. However, limited access to housing in Namibia, more so in Windhoek, is of great concern considering that 70 percent of the population cannot access decent housing mainly due to affordability related problems (Fleermuys, Fillipus, & Mwilima, 2011). The Namibian housing market features inflated property prices and a consistently limited capacity to meet the demand for land and housing development. The coexistence of low incomes and high housing related services’ costs excludes many residents in Windhoek from acquiring land or a house.

Although Namibia is classified as a middle-income country, the Gini coefficient of 74.3 suggests the existence of a dual economy. The ratio indicates a coexistence of two economies in Namibia – one modern with a skilled workforce of around 200 000, and the other based on subsistence farming, employing the majority of the population (Centre for Affordable Housing Finance in Africa, 2014). Furthermore, according to Kalili (2014), a small housing unit in Windhoek costs N $500 000 ($45,482 US), while a medium-sized property costs N $1,229,000 ($111,798 US). Considering affordability at the prevailing interest rate, per month, households need to earn N $13,500 ($1,228 US) to afford a small house and N $33,200 ($3,020 US) for a medium house. The average price of a house financed by First National Bank (FNB) costs NS$720 000 ($65,498 US). Since 93 percent of the population earns less than N $7,000 ($637 US) a month, mortgage housing facility is not an option to the vast majority of Namibians.

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