(Lecture Notes, Copyright. Dr. Bruce M. Firestone, Ottawa, Canada. December 2002.)

Affordable Housing in Africa

Substandard Housing in Botswana
(from Habitat for Humanity http://www.habitat.org/)

1. Needs Analysis
2. Economic Model- the difference between affordable in the west and in Africa; some spreadsheet comparisons and incomes; the differences within Africa—upper tier, middle tier and lower tier: median incomes versus average incomes. Source: http://www.worldbank.org/data/databytopic/GNPPC.pdf which highlights the difference between currency exchange and PPP (Purchasing Power Parity) and why materials, services and technology must all be local for success; locally available materials- e.g., Bill Teron’s failed experiment, where he imported pre-tensioned concrete elements toAfrica.
3. Locally Available Technology- wind up radio, pedal powered electricity, the kybo plug, the Firestone apple picker, drilled well/salt problem
4. Give a Fishing Rod, not a Fish: unlocking hidden capital- role of private property, ownership and real estate values, co-ops, kibbutz, African tribal values- sharing firewood with Koni, child raising, borrowing circles, micro business, micro loans to females and the net- the African model ?
5. Teamwork and Synergy: cities, towns and villages save the environment and lay the foundation for growth- Jane Jacobs + Teamwork in the 10th Millennium B.C.
6. Work, Live, Play + Internet Connections
7. Village Governance- Mobutu’s goats and Bongama’s vegetable garden
   

AFFORDABLE HOUSING IS NEEDED THROUGHOUT THE WORLD (http://www.habitat.org/how/intlstats.html)

Currently there are some 1.2 billion people worldwide experiencing "income poverty," meaning they live on the equivalent of less than one dollar per day. 1

The United Nations Centre for Human Settlements (UNCHS) has estimated that 1.1 billion people are living in inadequate housing conditions in urban areas alone. 2

UNCHS has estimated that some approximately 21 million new housing units are required each year in developing countries to accommodate growth in the number of households during the period between 2000 and 2010 period. Some 14 million additional units would be required each year for the next 20 years if the current housing deficit is to be replaced by 2020. 3

In Latin America, households need 5.4 times their annual income to buy a house. In Africa, they need an average of 12.5 times their annual income.

The highest rents are found in the Arab States, where a household spends an average of 45 percent of its monthly income on rent.

Real estate costs are highest in Asia and the Pacific where one square meter of land for a serviced plot costs an average of $3.10 in U.S. dollars.

PEOPLE WORLDWIDE NEED DECENT HOUSES IN DECENT COMMUNITIES.

Less than 20 percent of households in Africa are connected to piped water, and only 40 percent have piped water within 200 meters of their home.

In the developing world, 29 percent of cities have areas considered as "inaccessible" or "dangerous" to the police. In Latin America and the Caribbean, this figure is 48 percent.

In cities of the developing world, one out of every four households lives in poverty. Forty percent of African urban households are living below the locally defined poverty line.

Less than 35 percent of cities in the developing world have their wastewater treated.

In countries with economies in transition, 75 percent of solid wastes are disposed of in open dumps.

CITATIONS:

1 World Bank. 2000. World Development Report, Washington, Table 1.1.

2 UNCHS (Habitat). 1999. Basic Facts on Urbanisation, Nairobi, p. 9.

3 UNCHS (Habitat). 1999. Basic Facts on Urbanisation, Nairobi, table 9.

4 UNCHS (The United Nations Centre for Human Settlements) State of the Cities Report 2001 March

Affordable Housing Model

27-Nov-01

Note: All Dollars are US Currency

Ottawa

Your New Home

$125,000

Equity

25%

$31,250

Mortgage

$93,750

Your Annual Household Income

2

$20,000

$40,000

Your Annual Mortgage Costs

25

7%

-$8,044.74

Housing Costs/Household Income

20%

Ghana-- Imported Materials and Services Model

Housing Costs/Household Income

20%

Your Annual Household Income

2

350

$ 700.00

Your Annual Mortgage Costs

$ 140.78

Mortgage

25

7%

$1,640.63

Equity

25%

546.875

Your New Home

$2,187.50

Ghana-- Local Technology, Materials and Services

Housing Costs/Household Income

20%

Your Annual Household Income

2

1940

$ 3,880.00

Your Annual Mortgage Costs

$ 776.00

Mortgage

25

7%

$9,043.18

Equity

25%

$ 3,014.39

Your New Home

$12,057.57

You can afford a lot more House if you invest in local technology, materials and services.

Also, housing is a 'local' industry-- it produces jobs where the people are if you use local tech, etc.

The multiplier effect is much greater then!

This Model will only work if there is a capital system in place-- a means to recycling money;

i.e., a banking system with mortgages, recognition of property rights and

a title system, etc.

Copyright. Dr. Bruce M. Firestone, Ottawa, Canada. November 27, 2001.