WINDHOEK – The Windhoek Municipality says it has already gone back to the drawing board to find the best alternative method of selling residential erven to the thousands of homeless Windhoek residents, many of whom are unable to pay the astronomical prices charged for erven, leaving vast portions of the city’s residential land in the hands of property barons.
The flack that the Windhoek City Council received after last week’s land auction was not only from the public, but also from its own councillors, with Swapo Councillor John Monde saying he was concerned about the escalating price of land in the city.
“As you know, not many of us can afford these prices therefore a review of the whole process is in the pipeline,” he said.
Outgoing City of Windhoek Chief Excucutive Officer Niilo Taapopi confirmed to New Era yesterday that the council is about to review the process of partnering with private investors to service land for sale to residents.
In 2012, the Windhoek Municipality entered into a public-private partnership arrangement, whereby the municipality teamed up with private investors to service land for selling at auctions to middle-income earners who are also first time buyers, and others who want to buy erven for residential development.
The shocking realities of this marriage were excerbated by last week’s auction where some first time buyers paid nearly N$2 300 per square metre of land, a huge disparity compared to the N$1 650 per square metre price paid by property developers during their auction.
This is because of the small erven size availed for first time buyers, at between 500 and 550 square metres, compared to 600 and 845 square metres availed to property developers.
The bidding had a reserved price of N$800 000 and averaged at N$950 000 but saw some people spending as much as N$1.2 million and more for a plot.
“The city is in the process of investigating all options for financing of infrastructure, but the reality is that prices are determined by demand,” Taapopi told New Era yesterday.
Windhoek’s joint venture with private investors casted doubts on the affordability of the finished erven, given that private investors are profit- driven. When the city fathers announced it in 2012 they called it “a win-win initiative between public and private sector players for the purpose of enhancing effective service delivery by sharing risks and rewards of the venture under a contractual obligation.”
The marriage meant that private investors source funding from investment lenders to service the land, installing all municipal services, such as water, sewerage, tarred roads and electricity.
The Windhoek Municipality at the time brushed aside the question of why is the municipality not sourcing funds directly from lenders, saying the arrangement with private investors was required because the municipality cannot service land at the required pace, without employing additional people to do the work.
Taapopi reiterated the sentiment this week saying “the reason to partner with private entities and individuals is merely to speed up the servicing of land and thereby contribute to supply of serviced land in the market.”
“Due to the need for serviced land and the backlog thereof, council decided to go into public-private partnership arrangements to expedite the process,” he added.
“This is just a pilot project, for the council to decide how viable the action for land will work out,” he further said.