2013-09-10Staff Report 2 "WINDHOEK - Government is to launch an ambitious N$45 billion mass housing development programme through which it intends to build 185 000 houses by 2030 to mitigate the current nationwide 100 000 units housing deficit. The National Housing Enterprise (NHE) which is mandated to build low-cost houses for low-income earners and even for middle-income earners will implement the revolutionary housing plan, the biggest of its kind ever to be launched in the country. Although the Ministry of Regional and Local Government, Housing and Rural Development revealed that the funding model for the revolutionary housing scheme would entail debt financing by local and foreign institutions, a source hinted that some of the money could come from the Government Institutions Pension Fund (GIPF) that has billions in cash reserves. Unveiling the mass housing initiative yesterday during a meeting with all regional governors and mayors the Minister of Regional and Local Government, Housing and Rural Development, (Rtd) Major-General Charles Namholoh predicted a housing backlog of 200 000 by 2030 if the prevailing housing crisis is not addressed decisively. President Hifikepunye Pohamba has already appointed the Minister of Regional and Local Government, Housing and Rural Development, the Director General of the National Planning Commission (NPC), the Minister of Finance and the Minister of Presidential Affairs as national committee members on the envisaged mass housing development programme. The group was tasked to come up with ideas to accelerate the delivery of houses around the country to comprehensively address the issue of housing. The programme will remedy the problem of inflated house prices and rental fees, which non-home owners are increasingly unable to afford. The Manager for Research and Competitor Intelligence at First National Bank of Namibia, Namene Kalili, said government’s development plan has the potential to bring down house prices across the country. “The programme could slow down the rate at which house prices increase, because there will be more players in the market. Even though the houses will most likely be on the outskirts of town, people will rather pay N$280 000 for a two or three-bedroom house in Otjomuise than pay over a million for the same house in Dorado Park,” explained the FNB housing researcher. He is also optimistic that the influx of players in the housing market would be good for home seekers in the long run. “We should however be careful because house prices can only come down, and stay down, if we see a huge delivery of houses around the country. The fact that NHE is in charge of the programme gives you the comfort in cost containment, because they are probably one of the few players in the housing industry who are not profit-driven,” Kalili said shortly after the unveiling of the ambitious housing scheme. Kalili said factors such as limited bulk systems like electricity and sewerage need to receive adequate attention when the programme is implemented. “Currently we have a problem with electricity provision, and unless we consider off-grid electricity sources such as solar energy, we might see the new programme exhausting the current systems. Therefore, huge bulk systems need to be put in place,” he said. Asked how the implementation of a strict house price regulation regime would affect the housing market, Kalili said: “Regulation of prices has unintended consequences therefore it needs to be carefully looked at. Let us remember that Hillbrow was once the most expensive location in South Africa, but when government started capping house prices things went all wrong, now Hillbrow is the biggest slum of South Africa.” The mass housing development programme will be officially launched next month by President Hifikepunye Pohamba, who is also the chairman of the National Committee of the Mass Housing Development Programme. The Mass Housing Development Programme will be executed in two phases. The first phase of the programme is to be implemented during the first two years 2013/14 and 2014/15, which would constitute the pilot phase targeting urban centres in the 14 regions, thereafter the programme would be rolled out to other localities during the second phase which will run up to 2030. “The challenge to provide houses should not just be rhetoric, we need to deliver. Therefore we will use a dual tendering system, the NHE tendering system and government’s centralised procurement system so that we can adhere to the time frame,” said Namholoh. “We do not want shacks anymore because this is one of the factors hampering the integration of Namibians,” said Namholoh. Namholoh called on the NHE to deliver affordable, durable houses, which must target low and middle income earners in order to reverse the current backlog. The programme will cover urban and rural areas in all the 14 regions, with the aim to satisfy the housing demand for the next 18 years in line with Vision 2030, said the minister. “As a government, we took cognizance of the capacity that exists in the country with respect to executing the implementation of the programme. Notwithstanding such, the government will keep the option of importing foreign expertise to supplement local capacity as the need might be. Equally, government will also explore an option to supplement local supplies with any other sources that are affordable,” Namholoh said. The minister said there will be a need to strengthen the capacity of institutions, particularly those that will be involved in the implementation of the institutional mechanisms at all levels of the programme’s execution, hence, the programme provides for capacity building as well as the strengthening of the legislative, regulatory and policy environments, throughout the programme’s life span. Namholoh cited a lack of serviced land as the major factor that could hamper the effective implementation of the programme. NHE CEO Vinson Hailulu told the gathering during his presentation that limited capital injection in housing and land development is the reason for the small housing stock available. Hailulu is however worried that a lack of serviced land, escalating prices of building materials, land and professional services and limited income at household level may negatively impact the programme. Some of the figures presented indicate regional capitals like Rundu will receive N$195 million, Oshakati N$240 million, Otjiwarongo N$192 million, Keetmanshoop N$179 million, Opuwo N$162 million and Katima Mulilo N$192 million.
Total number of houses to be built
185 000
Total investment
N$45 billion
Annual investment
N$2,5 billion
Land servicing cost per plot
N$75 000
Housing construction cost
N$280 000
Informal settlements upgrading
50 0000 households
Number of houses to be built in first 2 years
8 850
Number of plots to be serviced in the first two years
