Never mind its bad rep by both the public and media, Namibia’s first phase of the Mass Housing Development Programme provided an invaluable lesson on how Namibia can provide adequate and affordable shelter to her citizens. The manifestation of some of the good outcomes from the first phase of Mass Housing would be through legislative reforms that the country should expect to see when the legislators resume with the next session of Parliament next year.
“All the pieces of the puzzle are now falling in place, and the next phase would be much more efficient, better planned and well coordinated,” Nghidinua Daniel, the permanent secretary in the urban and rural development ministry, says enthusiastically.
Daniel points out that it was thanks to the first phase of Mass Housing that government was able to experience just how cumbersome processes are relating to town planning and town rezoning – processes that are essential to speeding up housing delivery towards affordable housing.
One of the biggest policy changes for the Namibian housing market would come through the Local Authority and Regional Council Amendment Bill – to be tabled in the first session of next year.
The amendments are to empower the Minister of Urban and Rural Development to intervene, where required, in the sale of town erven. Thus regulating runaway erven prices that are so prevalent today.
“The bill would provide large room for the minister [of Urban and Rural Development] to determine how land is sold. At the moment the minister has no legal standing, because the law has not clearly given those powers to the minister,” says Daniel.
“There would be a reform of policies in housing delivery and land planning,” Daniel says.
Not only were some of the legislative instruments that were currently in place, too out-dated, but were no longer efficient in the current market where efficiency, reliability and timely is crucial.
Statutory bodies such as planning advisory boards and township boards would be replaced with new statutory instruments whose functions are decentralised for efficiency.
“In the next session we will bring the Urban and Regional Planning Bill that will take away these fragmented boards,” he says. The new bills aim to decentralise crucial functions, such as planning of towns and rezoning of town land, at regional and local authority level.
The ‘curse’ that is Mass Housing
Mass Housing was, loosely put, designed to deliver affordable housing and remove the housing backlog. By the time it went into action in the 2014/15 financial year, as a pilot project, it also served to infuse much needed oomph into an economy that needed to create employment opportunities. Yet even before the first shovels broke ground on the construction sites Mass Housing found was marred by controversy. Much of the controversy was with the manner in which construction contracts where allocated and the costs of construction. Since 2015 the whole project has been a regular headline fixture for non-payment of contractors and quality of housing units.
The National Housing Enterprise (NHE), having been the implementing agency, was caught in the crossfire. The government withdrew its mandate as implementing agency for the construction of Mass Housing units. A move that appears to have still left NHE with a bitter after taste, least for the manner in which the affair has been reported in the media.
NHE spokesperson, Eric Libongani, would not even entertain questions on Mass Housing this week, abruptly batting away any questions with reference to Mass Housing with a well rehearsed blocking phrase: “NHE’s mandate on Mass Housing has long been terminated by the ministry.”
He would then promptly refer any potential follow up questions to the Ministry of Urban and Rural Development.
Daniel too is at pains to point out how Mass Housing has come to be misconstrued and labelled as a failure, purely because of the intervention by the ministry and the removal of the construction mandate from NHE. It was more than that, he emphasises.
At its conception it comprised of much more than the construction of houses. It was specifically designed as a development programme for land use planning, design and as a service infrastructure sub-program; informal settlements upgrading sub-program, people housing processes (Community Self-Help Housing) sub-program, rural housing and sanitation sub-program, strengthening the legislative, regulatory and policy environment and capacity building sub-program, and social /subsidy housing sub-program. The construction and delivery of credit-linked housing sub-program is just but one component of the programme.
All those components are crucial to address what has been identified as an acute shortage of affordable housing. A situation that has reached a socio-economic crisis proportion, Daniel says.
It was also because of those very reasons that Build Together Programme was suspended, because it was being tackled through the ‘people housing processes (Community Self-Help Housing) sub-program.’
“This was to have an integrated approach,” he says, bemoaning that the media tend to overlook that fact when criticising government on the suspension of the Build Together Programme.
As it stands though, Daniel says much has changed since Sophia Shaningwa the incumbent Minister of Urban and Rural Development halted the Mass Housing when she came into office. And Daniel explains that the halting was necessary for the ministry to analyse what was done, how much was spent, paid to contractors and owed to contractors. A report to that effect was long prepared for Cabinet and the next step taken was where government decided that it could not abandon its legal obligations – as reflected in the contracts entered into between NHE and contractors.
Government then paid off the creditors, and where houses where incomplete, it tasked the contractors to complete the unfinished units. However, it also negotiated that units not constructed would no longer be constructed. All houses completed and paid off by government automatically become government properties.
Then enters NHE, again
NHE would not admit to New Era Weekend that it is still an implementing agency of Mass Housing, with Libongani obstinately this week saying that NHE is “only providing administrative support, but everything is done by the ministry.”
“NHE is only involved as part of the task team that was established in order to oversee the transparent allocation of houses, signing of deed of sale and the smooth handover of housing,” he says.
However, Daniel explains that government later realised that “NHE, being a state agency mandated to deal with the countries housing need and in as much as there were problems, still has a role to play in Mass Housing.”
In a July 2016 memo to NHE board chairperson Sam Shivute, Shaningwa directed that, among others, “NHE is responsible for entering into the sales agreement (Deed of Sale) with all the beneficiaries of Mass Housing houses both social housing and credit-linked housing, and all the subsequent activities of bond registration and loan repayments.” NHE was also told that there would be no hidden costs added to the approved prices of the houses which are charged at 5 percent interest for the social housing and 8.5 percent for the credit housing.
The allocation social housing is done according to the list at the local authorities. According to Daniel, both the administrative officers and political officers of the local authority sign off these lists, to have the balances and checks done. The beneficiaries on the list are again checked and verified for affordability, and to determine that the top beneficiaries have not bypassed those who have been first on the list.
Since the social housing is meant for those who can ordinarily not afford commercial financing, the local authorities have taken over the bonds of the social housing. The beneficiaries pay their monthly mortgage to the local authorities. However, where beneficiaries have found a commercial bank willing to finance their mortgage, that bond goes to the bank willing to finance the mortgage. The reason for this, says Daniel, is because of the Revolving Fund, which accepts all mortgage funds from Mass Housing houses. The idea is to have money coming into the fund and revolving out as soon as possible to fund the next phase as Mass Housing starts.
Beneficiaries who have a slightly better income are asked to finance their mortgage with commercial banks, and they access houses that are categorised as credit-link houses and not social housing. NHE acts as the bond registrar for the credit-link houses. The Revolving Fund is kept at the SME Bank, and Daniel says both the ministry and NHE are signatory to the account.