State of disaster: what is Covid-19 teaching us about housing in Africa?

The Covid-19 pandemic has exposed and exacerbated the persistent state of disaster facing a majority of households across the continent, whether they live in informal settlements, tenement blocks, inner city buildings, lower-income townships, and whether they rent, or own, or share.  At the most basic level this has to do with households’ access to water, sanitation, electricity, food security, tenure security, and the ability to achieve sustainable livelihoods, not to mention space to make social distancing possible.  These are not new crises that households are facing; they have persisted and been left unresolved forever.

The operational inefficiencies that persist and perpetuate this experience have also been exposed, whether in local governance and administration systems, or in the structure of local economies.  These relate to the ability to secure and administer land effectively, to enable development whether in the upgrading of informal settlements or the development of affordable housing, to register and include a household in local governance and data management systems, and so on – the basic business of getting things done at the local level is very difficult.   This has been an issue on which the Transaction Support Centre in Khayelitsha has focused, specifically in relation to tenure.  It is also a critical issue in terms of informal food production and distribution networks, and the inability of our regulatory and governance systems to accommodate these.[1]

And, lastly, the barriers that we’ve created by our siloed approach to development are also apparent for how they undermine our interventions.  These barriers relate to how we divide our understanding of what is possible from the public, private, NGO or household sectors; in the narrowly focused approach to subject matter we attend to, whether housing, health, education, food, job creation, etc.; and in the contradictions that exist in the design and implementation of legislation and policy, coming from either national or local, and how this plays itself out in what actually happens on the ground.  Our frustrations in dealing with the immediate issues that arise are in part as a result of these existing factors.

An emergency response to Covid-19 must deal with the crisis issues that households have been facing forever.  To do this, however, we must overcome the operational inefficiencies and silos that have undermined our efforts in the past.  This is critical.  It is the only way that we’ll be able to leverage the resources we need, whether public or private, to do what needs to be done.

The resources at our disposal are more limited than ever before.  The effects of the pandemic are putting more stresses on all the players, reducing our capacity to act.  Just looking at the impact on the housing sector: households have lower incomes which will reduce their affordability as housing consumers, putting pressure on developers with depressed demand, on lenders with rising NPLs, on landlords with rising rent arrears, and on the state with lower tax revenue.  One outcome of this will be a decline in property values, which will further impact on the ability of asset holders – whether these are households, landlords or lenders – to leverage further resources against their property.  This will undermine their ability to engage in the economy as they might otherwise have.  Declining property values will impact on municipal revenue streams and undermine their ability to deliver services, which will further affect property values, not to mention access to basic services.  Meanwhile, we will see shifting spending priorities of all the players: households will need to focus on their immediate health and safety needs and will have less income to spend on housing; businesses will need to focus on their lowest risk revenue earning efforts, and will be less able to experiment – this could have a negative impact on affordable housing.  And as we have seen in South Africa, the State has a myriad of demands being placed on a narrowing fiscus – health expenditure and income and livelihoods support being at the top of the list.

The narrowing of financial capacity on the part of all players means that we cannot afford the operational inefficiencies and siloed thinking that we sustained in the past.  The fact is, however, we don’t have to – we have the tools we need at our disposal, right now. 

The current context gives us an opportunity to make the systemic changes we have needed for some time.

First, we have seen very clearly the opportunity that is created through well-designed, well-placed technology.  Whether illustrated in the mapping of Covid-19 infections and tracing of contacts; or in the sharing of data to better understand municipal risk profiles; or in the use of Zoom or Webex platforms to facilitate communication; or in the application of blockchain technology to the creation of asset registries; or in the distribution of short information videos or posters through WhatsApp; or in a myriad of other options, technology offers us a capacity today that didn’t exist when we developed the policies and processes that govern today’s approaches to urban management and land administration.  Municipalities are only beginning to use technology in creative ways to support their work[2]– expanding this effort to a focused response to the effects of Covid-19 and other emergencies, not to mention the wider urban management effort, is worth investment, and will have a long term benefit to more efficient service delivery.

Second, across the breadth of players acting in their very different silos, there is a wealth of experience and capacity that, harnessed, could go much further.  This requires recognising the varied capacities and energies and developing a policy and regulatory framework, and products and services that accommodate them.  It also requires a vibrant and dynamic communications framework that brings the parties together and enables the choreography necessary.

So, the players:

Households, as active participants in their housing, are both housing consumers and housing suppliers.  Policy makers and the private sector, both, need to recognise the opportunities for small scale and backyard landlordism, incremental andmicro-builder housing delivery, and home based enterprises.  Operational inefficiencies and barriers for entry have relegated much of household-level activity to the informal sector, which is, at best, being overlooked, or more likely outlawed.  Household livelihood strategies, often using the home as a base, are critical contributors to local economies and must be accommodated and supported in legislation, policy, and the provision of private services.

The private sector is possibly the most flexible actor, operating across the entire value chain, or in specific niche markets, providing goods and services.  The private sector’s ability to operate is fundamentally influenced by their awareness of the market – the demand for their products and services – and the risks associated with specific sub-segments.  This means that their interest in engaging can be influenced by the information that is available to quantify the opportunity and clarify the risk.  The SDI’s Know Your City campaign is an interesting intervention in this regard, but housing specific data is a critical area for attention needed in order to attract private sector investment in the housing sector.  To this end, CAHF has recently launched a Housing Data Agenda for Africa – this is intended to be a multi-player collaborative effort.

Then State, whether at the national, provincial or state, or local sphere, plays a critical but often under-resourced role in creating the enabling the environment in which the players can act. It is here that explicit attention to administrative efficiencies – whether through well-placed technology or re-configured business processes – is needed.  A key area for investment is in the creation of digitised deeds registries.  According to the Doing Business Indicators Reliability of Infrastructure Index, only three countries have fully digitised deeds registries (Kenya, Rwanda and Mauritius).[3]  Investment is also needed in the development of administrative systems that overcome silos and champion an integrated approach.  A municipal data management system that places the property and the household at the centre of all its databases (water, sanitation, electricity, property taxes, etc.) would go a long way towards readying cities for quick responses in the case of emergency, not to mention efficient engagement with their residents in supporting ongoing development and service delivery.

Understanding the role of housing at three different levels helps us consider what housing-related interventions are necessary, and possible

When we think about housing, especially in the context of cities and Covid-19, we can structure our understanding in three spheres:

1. Access to adequate housing (and accompanying services): this involves the immediate emergency needs of households living in space and the quality of their dwelling to protect or shield them from emergencies (Covid-19 and other health, environmental and social), and support their livelihoods. Few African states, whether at national or local level, have the financial capacity to deliver to the extent required, and relief packages will be necessary specifically for these such interventions.

2. Housing asset performance: this is a longer term goal, about the role of the house as an asset for the household, and the housing sector as an asset for the overall economy and the city.  A well performing housing asset is a key factor towards supporting household resilience.  For example:

• Enhancing thefinancial asset performance of housing is about enabling incremental home improvements, improving property values, increasing access to affordable loan finance, and improving transaction support to ensure that households can access the financial value of their properties when they need to.
• Enhancing the economic asset performance of housing is about supporting a diversity of land uses in residential areas through progressive zoning regulations, while also ensuring the provision of adequate infrastructure services.  It is about a policy, regulatory, and administrative framework that are specially targeted at the needs and the capacities of home based enterprises. And it is about the provision of financial services, business loansand other services which recognise the participation of the housing asset and the small scale nature of the entrepreneur – for example, see the work of TUHF Pty Ltd in South Africa.
• Enhancing the performance of the housing sector as a national asset is about improving the finance framework, enabling transactions, and linking private residential property into the municipal asset management framework – something that is not readily done in many cities across the continent.

3. The functioning and health of the housing ecosystem itself, at both the city level and at the national level. This goes beyond the housing asset to consider more broadly the ecosystem in which housing functions, the upstream and downstream conditions and contributions, and so on. Here, investment capital that supports the development of healthy and efficient housing ecosystems that support household resilience in their response to and recovery from the Covid-19 pandemic and other emergencies is needed.   Investment in technology to support robust and efficient city administrative systems, as outlined above, would create the opportunity to leverage the wider capacities of the parties to operate at very local levels.  On the finance side, while attention to lender health will certainly be important, it must be noted that the majority of housing lender activity across the continent is with higher income earners.  Existing portfolios cannot be, therefore, the only focus for lenders.  Certainly, as households begin to rebuild their livelihoods, credit will become critically needed, whether for housing or other purposes. There is an important opportunity to shift lender attention down-market, perhaps as a condition for investment.  This will also require improving the risk frameworks surrounding a lower-income population, and increasing the information available to lenders to manage this risk.  This might also involve regulatory concessions and support for new standards for housing lending and investment that target lower income groups.  Lenders themselves will need to develop non-mortgage housing products and finance that supports incremental building and new forms of housing asset use.  This will need to be matched by investors with an appetite for this new area of lending.

Photo: Settlement in inner city Kampala, Uganda.

[1]WIEGO has published an interview with Caroline Skinner that outlines the issues in the context of Covid-19 very well.  See https://www.wiego.org/blog/food-security-and-street-vendors-during-covid-19-interview-wiegos-caroline-skinner  (accessed on 22 April 2020)

[2]See, for example, the City of Cape Town’s Economic Areas Management Programme (ECAMP) Portal which tracks and assesses the market performance and long term location potential of business districts across the city.  https://web1.capetown.gov.za/web1/ECAMP/(accessed on 22 April 2020)

[3]See the World Bank Group’s Doing Business Indicators website: https://www.doingbusiness.org/en/data/exploretopics/registering-property(Accessed on 22 April 2020)