By Kevin Tutani
Towards the end of May (2024), it was reported that more than 16 500 houses in Epworth in Harare were to be destroyed, since they had been built in an unregulated manner.
The reports went on to state that the affected residents would be resettled in other parts of the suburb. Densification initiatives would be used, as blocks of flats would be built to accommodate them on a smaller area of land than that which they originally occupied.
In November 2024, the Harare City Council also demolished 20 houses in Ridgeview, Belvedere. Available information revealed that they were not built in line with the set procedures, as given by the Council.
It is obvious that homeowners don’t build their properties with the expectation that they will be destroyed. These demolitions, therefore, reveal the misalignment between property developers (some of whom include fraudulent land barons), aspiring home owners and regulatory authorities (such as the City Council), within Zimbabwe.
As long as the issue of unregulated property developments continues to resurface regularly, this points to a need to close gaps which fuel these situations. It could be that, such problems are continuing because the authorities (municipalities) and higher levels of government, in general, are failing to redesign existing property development frameworks (laws and procedures). Existing frameworks may not be fit for purpose. Property development guidelines, as designed by municipalities, should facilitate homeownership.
This implies that the procedures required by relevant authorities, should be clear, reasonable and encourage developers to comply with them.
As of 2024, Zimbabwe’s housing backlog stood at a staggering 1.25 million units. Urban centres like Harare and Bulawayo accounted for 70% of the shortfall. The huge housing deficit is one of the factors driving property prices upwards in Zimbabwe.
Zimbabwean properties are more expensive than those of peer economies in Africa and beyond. Zimbabwean banks are also reported to be offering mortgage loans at exorbitant interest rates, with charges ranging around 20%– 25%, per year. Due to a more efficient property market in Kenya, for example, mortgage (property) loan penetration stands at a respectable 3.2% of GDP. This is significantly higher than Zimbabwe’s paltry 0.4% of GDP.
At national, provincial and municipal levels, government-built (affordable) rental housing is hard to come by. The poor, some of whom will need completely subsidised (free and donated) housing, have little hope of owning a property and living dignified lives. Such vulnerable groups include elderly widows, orphans, and the disabled, among others.
The complex municipal regulations around property development, government’s minimal commitment towards the provision of affordable housing and the chaotic nature of Zimbabwe’s housing market, show that the property landscape is in need of either a revamp or re-boot (adjustments).
The role of home owners and micro developers
Since government-supplied housing is slow in coming, the private sector needs to be encouraged, so that it supplements, by building its own, and renting out or selling it, in the market. Existing homeowners willing to add more properties at their residences and micro developers, are of particular importance because they tend to provide affordable accommodation solutions, which serve the poor.
In that regard, homeowners in low and middle-income (high and medium density) residential areas should be permitted by law to replace their single-family homes with 2 to 6 apartment (flats) units, on multiple-storey blocks, if they can afford to. A select group of low-density areas, can also be permitted to follow a similar route. That means zoning laws should permit that flexibility. By so doing, such landlords (homeowners) enable their neighbourhoods to accommodate more people, whilst renting out the newly-built apartments, for a profit.
If done with adherence to safety and public health protocols, such initiates can help to cover the national housing deficit, whilst creating jobs for construction sector workers, among other things. In essence, beyond the provision of affordable housing, this will also be good for economic growth.
Instead of viewing this as a violation of norms, municipal authorities should therefore embrace it as a valuable opportunity for urban renewal. If landlords earn more income, they can be able to maintain their homes and contribute to their communities in a better way. With the emergence of rapid micro property developments, communities will look more appealing and have more economically productive residents within them.
By definition, micro developers are emerging property entrepreneurs, with less resources (financial, equipment, etc.) than established companies. They may initially join the development sector through informal sector activity, but with consistent success, they eventually become formally registered operators. It is essential to emphasise at this stage that, property developers are not necessarily the same as construction companies. However, they work closely together.
Property developers are responsible for the overall planning and coordination of real estate development projects, whilst construction companies are responsible for the actual physical construction. Developers are critical because they play vital leading roles such as, the acquisition of land, securing of project finance, property design (building plans) and building permits, among other things. In other words, they manage the entire lifecycle of construction projects. This is unlike construction companies, which may be completely dependent on developers to hire them for new business.
In order to cover Zimbabwe’s huge housing deficit, both micro and established developers should be served with a business-friendly environment, for them to thrive. The focus of this article will however be on micro developers, since they are more nimble (flexible) and can profitably operate in the affordable housing market. For low-income housing supply gaps to be sealed, micro developers should also be permitted to buy residential land from existing homeowners and develop it into blocks of residential flats, for renting out or for sale. Although micro developers typically embark on small projects of a few houses/ flats at a time, they are serial entrepreneurs, who continue with the business, long after their first few projects.
This is unlike homeowners, who usually stop new (property) developments, as soon the rental properties at their homes are completed. In countries such as South Africa, homeowners and micro developers, initially draw their funding from a combination (or variation) of personal savings, personal bank loans (sometimes paid back at exorbitant interest rates of around 25% per year), credit cards (at high interest rates as well), bank overdrafts on personal accounts, and rental income from existing units which they built earlier. However, those who stay in the business long enough can eventually access external finance, such as business loans from micro lenders and banks.
The role of government
Additional support from all levels of government (central, provincial and municipal) will be needed, particularly regarding the simplification of regulations and procedures required of property developers and construction companies. Building plans submitted to municipal authorities should be prioritized so that they are quickly approved. Local authorities may even resort to making different samples of building plans, which developers can choose from, if they need immediate approval for their projects. Since the municipalities will already know the contents and details of such sample building plans, approval will be immediate. Building plans which are not based on existing samples, in the hands of municipalities, should also be expedited.
The improved pace of approvals can go a long way to increase the supply of new properties in the market, thereby placing downward pressures on (property) prices, making accommodation more affordable. Building inspectors, who work for municipalities, should act as facilitators, as they work with developers and construction companies. That essentially means that they should not add complications or be a distraction. Rather, they should mentor developers, where possible. Overall, where municipal standards are no longer relevant, they should be revoked.
In neighbourhoods where population numbers have exploded as a result of rapid new property developments, municipalities should stand ready to expand the available public infrastructure to keep community life sustainable. This includes supplying larger electricity transformers, wider water and sewage reticulation pipes, passenger railway, broader and more structurally sound roads, car parks, more social facilities such as parks (greenspaces), schools and clinics, etc.
Properties which are not built in line with municipal procedures, are associated with various problems. Firstly, several of them are not recognized within municipal books. That means in some cases, they are not subject to the payment of municipal rates. Even in cases where homeowners renovate their properties, so that they have greater market value, if the Council is not aware of such developments, it will continue to charge less in property rates than it should.
Second, such properties are at times built on land belonging to someone else, who may be an ordinary individual or the government itself. However, it will be important for the government to regularise as much of these “off-the-books” properties, as it can. This will enable it to earn more in municipal rates. Where it is not possible for such properties to be regularized, the government could appropriate (grab) them, instead of demolishing them. After appropriation, the government can sell the property to the legitimate land owner on which the property was built, and then refund the perpetrator (or withhold the funds for itself).
Demolition and disavowal of properties should be seen only as a last option. A public agency which trains homeowners and developers on how to legitimately extend (renovate) properties in low-income neighbourhoods can help to enhance the quality of homes to be built in those areas. Waiving some government fees associated with development, will also be essential, where possible. Deferment of exorbitant upfront government fees, so that their (fees) repayments are incorporated into property rates, over several years, seems ideal. Digital technologies which help prospective home owners to confirm the legitimacy of land before they purchase it will be critical.
Easing municipal regulations, along with the formal recognition of micro developers, are advantageous in that, they make the sub-sector (micro developers) more attractive to formal lenders such as banks. Illegal structures which do not have approvals from local authorities (such as municipalities) cannot be funded by banks, at any stage of their (illegal structures) development. However, creating an environment where regulations are easy to fulfil makes it possible for banks to participate in this property sub-sector (micro development). Making more capital accessible through formal banking channels can drive greater growth in the property development market.
The government should also release some of its own surplus land, at a discount, to micro developers, for the construction of small-scale rental housing. Ideally, such land should be close to economic opportunities (cities, towns and village service centres).
Conclusion
There is a daunting housing deficit in Zimbabwe. The old model where the government and large private developers dominate the property development market, may fail to adequately reduce backlogs. That is mostly because affordable housing for the poor and some middle-class citizens is likely to be in short supply, under such circumstances. Therefore, it will be critical to mobilise the capacity and expertise of citizens (homeowners) and micro developers, in order to draw from their inventiveness, as they creatively provide decent low-income housing solutions. Such a transition might not be easy for the government to manage, especially in the initial stages, but it is likely to prove effective in addressing the scarcity of accommodation. If local Councils are able to provide sound leadership, the negatives associated with this dynamism (micro developments) can also be stably managed.
Kevin Tutani(political economy analyst)
