HOUSING FOR ALL

Tanzania 2015 | REAL ESTATE & CONSTRUCTION | FOCUS: SOCIAL HOUSING

Facing a shortfall in affordable, high-quality housing, particularly in urban areas, the Tanzanian government has developed a plan that is both progressive and growth-friendly to address the most basic needs of its people.

Though Tanzania has made a concerted effort to provide housing for all of its citizens, significant challenges still remain. These mostly stem from conditions brought about by rapid urbanization, pre-existing infrastructure issues, and a dearth in the supply of affordable housing. Tanzania has now embarked on the plan to build 15,000 new affordable houses to curb the severe housing shortage in the country.

The government is pursuing a policy of addressing the housing shortfall by working in partnership with the private sector and through the National Housing Corporation (NHC) to stimulate the supply of housing and give access to finance for borrowers. The NHC's mission is to provide and facilitate the provision of serviced land, housing, and other buildings in Tanzania for use by members of the public for both residential and business purposes. The long-term mission of the NHC is to become both a major mass housing producer and commercial property developer. As NHC Director General Nehemia Mchechu explained to TBY, the NHC has three different distinct business portfolios. Their primary brief is to improve existing city infrastructure, combining local properties situated in strategic areas to modernize the urban landscape, and build durable structures that will last in future decades. The second portfolio deals with creating, financing, and supplying affordable housing, and the primary aim in this effort is to deliver affordable and high-quality housing for local communities. The NHC insists that affordable housing be a partnership between the government, local communities, and all other concerned parties, be they public, private, or international. The third portfolio concerns the development of satellite cities. These satellite cities hope to tackle two different aspects of Tanzania's overall urban development plan: accommodating the growth in urbanization and creating modern cities to complement economic growth. The satellite cities are planned to bring urban services closer to residents and consequently decongest and improve city centers. With these responsibilities, the NHC seeks to enhance its traditional role of constructing low-cost rental residential buildings in urban areas.

In 2012-2013, the government passed new legislation concerning affordable mortgages and building new housing units. In 2013, the NHC received a loan from a consortium of nine banks and financial institutions worth $104 million to construct 15,000 affordable housing units by 2015. These units will be spread out across Dar es Salaam, Kigoma, Arusha, and Dodoma. Work already started in Dar es Salaam in April at Mindu Street, near Muhimbili National Hospital. The World Bank's Tanzania Housing Finance Project is involved with the NHC, through a program that aims to expand access to affordable housing finance under market-based conditions. The project has been effective since January 2011, and is comprised of three core components: encouraging development of the mortgage market (only 3% of the population in Sub-Saharan Africa currently has income levels adequate to qualify for mortgages, which often come with interest rates as high as 15%), building the infrastructure for effective housing microfinance, and an expansion of the affordable housing supply. NHC Director General Mchechu told the African newspaper Sabahi that the housing shortage has been growing at an alarming rate, and his had corporation decided that they must do something about it. “The shortage is growing at the rate of 200,000 houses per year," Mchechu said. “We cannot remain bystanders. My promise is to transform NHC to better serve Tanzanians," Mchechu said while speaking in Dar es Salaam. “We have to do something about this unacceptable situation." The government and its private sector and international partners are focused on addressing the housing shortage, and working to expand access to all Tanzanians.

The effort has been extremely popular. The NHC received an overwhelming number of down payments for planned low-income housing units in Dar es Salaam just two days after its launch, according to Tanzania's Daily News. The NHC began accepting requests for the 182 housing units on January 2, 2013 and had to stop offering spaces the following day, as the agency received down payments for 120% of the available spots. The program is having economic benefits across other sectors as well. The Tanzanian construction sector will also profit from the planned developments, and is performing well; it grew by 9.8% in 2013 and is anticipated to grow by 9.6% in 2014. In its aspiration to provide affordable and quality housing for all sectors of society, the Tanzanian government is also providing a stimulus to a number of sectors in the economy.