The dream of owning a decent house remains a mirage and a thorn in the flesh for many Namibians as only 1.7% people can afford a N$1 million house.
This is worsened by the rapid urbanisation and migration that is driving millions into informal settlements, where 67% of the urban population resides.
This information is contained in the National Housing Policy 2023 report, which was released by the Urban and Rural Development Ministry recently. To resolve the housing crisis, Urban and Rural Development minister Erastus Uutoni called on stakeholders to join hands with government as it cannot solve the problem on its own.
“There is a greater role for the private sector and viable public-private partnerships to achieve specific targets as set out in the National Development Plan and the second Harambee Prosperity Plan. This, however, requires business unusual and innovative approaches and solutions,” Uutoni said recently during the Old Mutual Namibia Housing Fund launch in Windhoek.
He said investors have a unique opportunity to partner the government in shaping the future of towns.
“We can leverage our combined expertise and resources to address one of the most pressing issues of our time, building inclusive communities where everyone has a place to call home,” he said.
Uutoni also took issue with the shortage of serviced land, saying this remains a serious challenge for the housing sector.
“Local authorities continue to sell land to private property developers, who in turn sell houses at exorbitant prices, thereby creating a mismatch between demand and supply. Available serviced land and housing is priced due to input costs,” said Uutoni.
Income inequality
Furthermore, widespread poverty, unemployment, and economic inequality have entrenched livelihoods, with limited legal coherence and insufficient public funding to address the growing infrastructural challenges.
According to the NSA census preliminary results released this year, Namibia’s population is 3.3 million, with more than half of the people living in urban areas.
Further, according to the national housing policy of 2023, across the country, 62.4% of households earn less than N$5 000 per month, placing them in ultra-low-income brackets.
What is more, the Namibia Household Income and Expenditure Survey (NHIES) 2015/16 indicates that an average household earns between N$1 500 and N$4 500 per month, this is a slight increase from N$1 300 to N$2 873, according to a survey conducted in 2009/2010.
This specific group can only afford a housing loan of between N$57 000 and N$168 000 with 7.5% interest over 20 years.
Meanwhile, the low-income bracket which takes up 25.1% of the overall population earns between N$5 000 and N$10 000.
This demographic can afford a house loan worth between N$200 000 and N$300 000 with 7.5% interest over 20 years.
Then comes the middle-income earners who make up 9.8% of the population.
An average household income of this demographic group earns between N$10 000 and N$20 000
This group can afford a house loan of between N$400 000 and N$600 000.
Interest
Additionally, only 1.7% of the population have a household income of between N$20 000 and N$40 000.
An average monthly household income in this group is N$29 000 according to the recent survey and this group can afford a house loan of N$1 million with a 7.5% interest spread over 20 years.
The high household income earners of the country are only 1% of the entire population.
This demographic group earns an average of N$67 000 and can afford a loan for a house worth N$2 million.
Housing dilemma
While government has put up interventions to build houses for the nation, it was reported in the media that the National Housing Enterprise (NHE) has only built 21 545 houses since its inception 31 years ago, in 1993 and is currently dealing with a backlog of 300 000 houses.
Over 120 000 applicants have been on the company’s waiting list since 2005.
The waiting list in the Khomas region stands at 33 000, while 35 000 Erongo residents are waiting for homes.
In the northern regions, there are 22 000 applicants on the waiting list, while 15 000 people from the southern and northeastern regions are desperate for a place to call home.
The biggest headaches attributing to this scourge is limited public funding and infrastructure to support both urban and rural areas.
The report states that many Namibians are forced to live in substandard conditions.
As the country’s population has exceed three million, inequality continues rising, exposing the urgent need for policy reform, local innovation, and establishing public-private partnerships to address these growing challenges.
Uutoni recently took issue with NHE’s slumber, saying they need to be more innovative and roll out smart policies to address the housing backlog.
“NHE, you have to change. You can’t continue with same style of doing business. Assess the level of income, look at the economy. Can your customers afford? You only want to address some of the members of the community. Just build a house that is not luxurious and try to reduce the cost. Do not decorate somebody’s house,” Uutoni demanded.
NHE is publicly funded, and its core business is ensuring the provision and financing of housing for Namibia’s low-and middle-income earners.
Post Uutoni’s swipe, NHE took issue with a report in New Era, saying Uutoni was quoted out of context.
“The enterprise would like to highlight that the article is highly misleading, inflammatory, and devoid of factual context. It is indeed true that the honourable minister made the said remarks. However, he was making reference to instructions given to NHE in 2020 during the conception of the Informal Settlement Upgrading Project (ISUP). The NHE heeded to the minister’s direction, hence the delivery of over 750 units over the past four years,” NHE said.
Meanwhile, economist Salomo Hei recently said the remedy to the persistent housing problem lies in addressing the price of land.
“If we don’t deal with root issues, some of those government initiatives will remain mute. The price of land needs to be considered as a solution to housing affordability. Challenges in the sector include affordability issues, due to the high cost of housing driven by land price and high levels of unemployment,” Hei said.
The economist also presented figures, explaining that for someone to afford a N$1 million house, that person should earn about N$36 000 a month. According to the FNB Namibia residential property report, the average house in Namibia costs about N$1.2 million.
Challenges
Furthermore, some of the key challenges highlighted in the report include rapid urbanisation and migration, informal urban development, widespread poverty and inequality, unemployment, lack of legal coherence and so forth.
Namibia is classified as an upper middle-income country by the Bretton Woods institutions; the World Bank and the International Monetary Fund (IMF).
Over the years, former President Hage Geingob repeatedly voiced frustration with this classification of the country, arguing that it misrepresented the reality on the ground and hindered access to soft loans and grants.
Geingob firmly believed that concessional loans and grants were essential for Namibia’s fight against poverty and inequality.
In 2019, the year he assumed his office, he called for the living conditions in informal settlements to be declared a national humanitarian crisis.
However, today his vision of eliminating shacks within five years remains unfulfilled.
Geingob died in February this year after a battle with cancer. This year would have marked his last as the country’s President.
Policy
The national housing policy calls for structured finance to address land and housing shortage for various income groups.
The framework is aimed at addressing the overarching human rights-based enabling framework for a focused, affordable and pragmatic approach to adequate housing.
It outlines that addressing the multidimensional nature requires realignment of relevant policies to achieve impact.
Some of the strategies put in place to address the situation include unlocking housing opportunities at scale for urban and rural residents at all socio-economic levels.
It also seeks to strengthen Namibia’s human rights framework for adequate housing, focus public expenditure proportionally, re-align state supported housing provision, incentivise private sector housing investment and others.
Politics at play
As the country grapples with housing shortages and widespread multidimensional poverty, many citizens are left wondering who will address their plight.
With national elections approaching in November, political parties are seizing the opportunity to promise solutions in a bid to secure votes.
The Popular Democratic Movement (PDM) has pledged to reduce the urban housing backlog to 30% by 2029 through a “one Namibian–one plot” policy.
Independent presidential candidate Ally Angula has also promised to provide every Namibian aged 18 to 59 a monthly allowance of N$1 750 if elected and aims to create 500 000 new jobs within three years.
Angula emphasises the importance of ensuring every household, whether urban or rural, has access to a stable monthly income.