Kampala is facing a dearth of affordable formal housing. Rural-urban migration, limited access to mortgage finance, and a host of other factors are all straining its housing sector. It is imperative for planners to think of innovative and sustainable ways to address this issue, argue Astrid Haas and Thierry Hoza Ngoga

Haas, Astrid

Hoza Ngoga, Thierry

LSE Research Online

Where	are	Kampala’s	missing	houses?Kampala	is	facing	a	dearth	of	affordable	formal	housing.	Rural-urban	migration,	limited	access	to	mortgage	finance,and	a	host	of	other	factors	are	all	straining	its	housing	sector.	It	is	imperative	for	planners	to	think	of	innovative	andsustainable	ways	to	address	this	issue,	argue	Astrid	Haas	and	Thierry	Hoza	Ngoga.Rapid	urbanisation	across	sub-Saharan	Africa	has	had	far-reaching	implications	for	housing.	Developments	andtherefore	supply	cannot	keep	pace	with	the	level	of	people	moving	into	cities.	The	result	is	the	rapid	proliferation	ofinformal	settlements,	characterised	by	overcrowding,	poor	services,	and	unhealthy	environments.KampalaIn	Uganda’s	capital	city	Kampala,	which	is	home	to	about	1.75	million	people,	it	is	estimated	that	roughly	60%	of	thepopulation	live	in	such	unplanned	and	poorly	constructed	areas.	Current	estimates	of	the	housing	deficit	in	Kampalaare	over	420,000	units.	Furthermore,	to	keep	pace	with	the	urban	growth	of	the	city,	it	is	estimated	that	the	housingstock	would	have	to	increase	by	a	further	29,000	units	per	year.	This	number	is	only	going	to	go	up	as	a	result	ofUganda’s	high	population	growth	and	rapid	urbanisation.A	lack	of	affordable	housing	and	mortgage	financingAccording	to	the	Centre	for	Affordable	Housing	Finance	in	Africa	(2015),	driving	a	large	part	of	the	supply	challengeis	the	fact	that	a	significant	majority	of	Kampala’s	population	cannot	afford	to	buy	houses	in	planned	areas.	Forinstance,	it	is	estimated	that	on	the	lower	end	of	the	spectrum,	an	80m2	one-bedroom	house	built	by	a	formaldeveloper	costs	around	USD	13,500	per	unit	in	2015.	Compare	to	this	to	the	fact	that	the	average	household	incomefor	those	living	in	low-income	slum	housing	is	estimated	to	be	a	mere	USD	1,150	and	the	issue	becomes	clear(Uganda	Housing	Cooperative	Union	2018).Kampala	is	struggling	to	keep	pace	with	the	urban	growth	of	the	city				Image	Credit:	MikeFreedman	via	Flickr	CC	BY-NC-ND	2.0Africa at LSE: Where are Kampala’s missing houses? Page 1 of 3		Date originally posted: 2018-04-25Permalink: http://blogs.lse.ac.uk/africaatlse/2018/04/25/where-are-kampalas-missing-houses/Blog homepage: http://blogs.lse.ac.uk/africaatlse/This	problem	is	exacerbated	by	limited	access	to	mortgage	finance.	The	mortgage	market	is	dominated	by	a	handfulof	financial	institutions	that	charge	interest	rates	between	16%	and	23%.	Additionally,	it	is	not	uncommon	for	theseinstitutions	to	require	up	to	30%	of	all	costs	paid	up-front.	Formal	credit	is	therefore	restricted	to	a	very	smallproportion	(0.68	%,)	of	households,	with	the	result	being	that	a	vast	majority	of	the	population	refrains	frompurchasing	properties	from	formal	developers.	Owned	properties,	which	are	built	incrementally,	tend	to	be	financedfrom	savings	and	other	non-mortgage	means.	This	lack	of	demand	acts	as	an	additional	constraint	to	the	emergenceof	a	thriving	housing	sector.Slums	and	land	tenureAs	a	result	of	lack	of	access	to	formal	housing,	Kampala	has	become	home	to	a	large	number	of	slums.	These	havedeveloped	without	any	infrastructure,	structuring	or	formal	organisation,	and	often	access	to	limited	low-qualityservices.	These	densely	packed	settlements	have	implications	for	liveability,	particularly	the	health	of	their	residents.Upgrading	attempts	in	the	past	have	largely	been	unsuccessful.	This	was	partly	because	they	lacked	anycomprehensive	spatial	planning	or	understanding	of	the	wider	context.	For	example,	the	upgrading	of	theNamuwongo	slum	ran	into	a	myriad	of	challenges	including	ballooning	costs	and	time	overruns.	In	the	end,	the	areawas	gentrified	as	a	result	of	the	poorer	residents	selling	their	properties	to	wealthier	citizens.	They	then	relocated	to	anearby	wetland	area,	which	effectively	extended	the	geographic	size	of	the	slum.	Similar	gentrification	dynamicshave	been	at	play	elsewhere	in	the	city.Although	slums	can	be	found	throughout	the	city	on	various	forms	of	land	tenure,	they	are	disproportionately	locatedon	mailo	land.	Mailo	land	is	a	type	of	land	tenure	which	is	specific	to	Uganda	and	arose	as	a	result	of	an	agreementbetween	British	colonialists	and	the	Buganda	Kingdom	in	1900.	Under	this	agreement,	9000	square	miles	of	landwere	given	to	the	Buganda	Kingdom	to	manage	under	their	traditional	laws.	This	land	was	then	further	divided	intopublic	mailo,	which	is	land	owned	by	the	King	of	the	Buganda	Kingdom,	the	Kabaka.	It	is	managed	and	leased	out	bythe	Buganda	Land	Board.	There	is	private	mailo,	which	is	the	land	that	was	given	by	the	King	to	his	chiefs.	In	thepresent	day	this	is	effectively	managed	like	freehold	land.One	of	the	main	reasons	that	slums	are	disproportionately	located	on	this	type	of	tenure,	is	due	to	one	particularfeature	of	this	land:	dual	ownership	rights.	These	rights,	enshrined	in	law,	grant	both	the	landowner	and	the	personwho	owns	the	permanent	structure	on	the	land	equal	ownership	rights.	This	means	for	any	sale	or	investment	on	theland	to	take	place,	the	landowner	has	to	agree	with	all	the	tenants	before	this	can	be	done.	Although	this	is	aconstraint	for	effective	investment,	from	the	perspective	of	informal	settlers,	this	improves	their	tenure	security	oncethey	can	construct	a	permanent	structure.Improving	liveability	in	citiesWith	urbanisation	rates	above	4%	driven	by	rural-urban	migration,	the	need	for	housing	is	going	to	growexponentially.	In	2014,	15.8%	of	Uganda’s	population	of	37.8	million	lived	in	urban	centres.	By	2050,	it	is	estimatedthat	this	will	more	than	double.	Land	tenure	and	housing	finance	are	only	two	of	the	reasons	driving	the	housing	gapin	the	city.	Others	include	the	availability	of	good	quality	yet	affordable	construction	materials,	as	well	as	thechallenge	of	coordinating	governance	of	a	housing	sector	involving	a	number	of	actors.	Therefore,	it	is	critical	to	findways	to	increase	the	supply	of	good	quality	affordable	housing.	This	will	require	further	research	into:Incremental	housing	schemes.Innovative	ways	to	unlock	affordable	housing	finance	opportunities.How	to	leverage	technology,	material,	and	labour	in	keeping	the	cost	of	housing	low.These	can	be	coupled	with	learning	how	other	cities	have	increased	their	stock	of	low-income	housing.	All	of	this	willbe	the	key	to	improving	liveability	in	Kampala	and	other	fast-growing	African	cities.This	article	was	first	published	on	the	IGC	blog.Astrid	Haas	is	a	Senior	Country	Economist	(Cities),	working	in	the	IGC	Uganda	and	the	Cities	that	Work	initiative.Thierry	Hoza	Ngoga	(@hozangoga)	is	an	independent	researcher.Africa at LSE: Where are Kampala’s missing houses? Page 2 of 3		Date originally posted: 2018-04-25Permalink: http://blogs.lse.ac.uk/africaatlse/2018/04/25/where-are-kampalas-missing-houses/Blog homepage: http://blogs.lse.ac.uk/africaatlse/	The	views	expressed	in	this	post	are	those	of	the	author	and	in	no	way	reflect	those	of	the	Africa	at	LSEblog,	the	Firoz	Lalji	Centre	for	Africa	or	the	London	School	of	Economics	and	Political	Science.Africa at LSE: Where are Kampala’s missing houses? Page 3 of 3		Date originally posted: 2018-04-25Permalink: http://blogs.lse.ac.uk/africaatlse/2018/04/25/where-are-kampalas-missing-houses/Blog homepage: http://blogs.lse.ac.uk/africaatlse/

Where are Kampala's missing houses?

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Where are Kampala's missing houses?

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