Lilongwe – The World Bank housing project aimed at providing low cost housing to low income urban dwellers in Malawi failed to achieve its goals but rather succeeded in driving them out of their living spaces in the face of the countryís low cost housing supply. A study carried out by an urban development planner to evaluate the demand and supply of housing in Malawi has revealed that lack of focus, inactive housing policy, and inadequate housing stock forces the middle and high income to enter into land meant for the poor. Vera Tambala-Kamtukule says the study draws its lessons from the Bankís project undertaken in Lilongwe, Malawiís capital city and Blantyre, the countryís commercial and business hub, where most of the poor who were to benefit by access to serviced land lost their land to high income populations. It can be concluded that the first urban development project by World Bank was a failure mainly due to the fact that the project failed to meet the needs of its target as these were later evicted by the market to give room for the high income,î says Tambala-Kamtukule.

Malawi is currently urbanizing at the rate of around 6.4 percent. This, coupled with poverty, lack of clear policies, housing finance and the absence of a formal housing sector has resulted into a very high demand for housing across the four cities of the country. In 1987 the World Bank made an effort to help the government of Malawi alleviate the looming housing problem by providing finances through the Office of the President and Cabinet (OPC) to develop 2, 000 plots in Lilongweís Area 49 Gulliver and Kameza and Manja in Blantyre. The project was supposed to be completed in three years but was finished after ten. The money was channelled to the Malawi Housing Corporation (MHC) to implement the first housing project involving mortgages for end users using the then New Building Society now NBS Bank using the full recovery principle. The projectís aim was to produce a suitable housing system and introduce a wide range of affordable house design options for purchase with loans obtained from the Society. It was believed that the full cost recovery of the housing scheme would be the basis for a continuing programme that would restore the momentum of housing development in Malawi.

Twenty three years down the line however, Malawi still has not attained momentum in housing development and the government provides very small quantities of financial resources in this regard,î says Kamtukule adding ìa single glance shows that the poor are no longer living in the low income housing areasî.  Kamtukule found out that the cost of the ìlow cost housesî became unaffordable for poor people and the absence of property transfer limitations led to the sell of their houses to middle and high income people. This indicates that the projectís objectives were not achieved,î she says adding that the results of the study also indicate that the bulk of the people living in the target areas are either renting or are keeping the houses for others for safety.  The study found out that the people who purchased the houses from MHC bought them at US$160 payable in installments for a maximum period of 25 years with a condition to extend the houses within a specified period. Those who could not extend in the set period lost their houses and MHC corruptly reallocated them to others,î says Kamtukule stating, ìThe peopleís ability to repay was not properly assessed, as a result, most of them failed to repay within the appropriate conditions.

Kamtukule however, says the project changed lives of those that managed to pay since ìbecause they now had a home, they had more disposable income to pay school fees for their children and now lived in a better environment and their social status improved. She however, asks government to clearly define the concept of housing affordability and who can afford housing in the countryís national policy. ìLack of clarity in the policy reflects ambiguities in the housing affordability concept, she says. Housing production is very expensive in Malawi and largely affordable to the upper income groups. Financial institutions regard low income populations as high risk and are generally not interested in low-income housing production because many high income families apply for loans for expensive housing. The study established that low-middle income households face obstacles to access housing finance as they are required to have bank accounts and a stable income. In spite of the attractive loan features at the banks, such loans still have high interest implications and are only accessible to middle and high income populations and it can therefore be expected that less poor people will consider accessing them,î says Kamtukule adding that in the conventional model of urban development, the state and the private sector have the responsibility in the provision of housing.

The housing market in Malawi is dominated by an informal supply with mostly individuals acquiring land and building structures. The Malawi Urban Sector Housing Profile (MUHSP) says only 20 percent of delivery of dwellings in Malawi is by the formal sector. The housing stock in Malawi is low driving housing prices high,î observes Kamtukule noting that for the past 10 years, the country has operated without a relevant housing policy, a situation which has negatively affected MHCís work to provide housing for the low-middle income people. Local authorities too have a legal obligation to develop traditional areas for low income housing in Malawi and contribute towards reduction of poverty but due to inadequate funding and high building costs among other things both MHC and local authorities fail to meet demand. Kamtukule recommends that the government should assess and evaluate the approach used by institutions including local and international NGOís in housing production and see if it can replicate their approaches.

Government should establish partnerships with the private sector on housing delivery by subsiding costs in terms of interest reduction and by guaranteeing financial incentives for private sector investment in terms of profits and return on investment,î she points out. But as seen in the study findings, local authorities and government have no resources to implement viable housing programmes for the low-middle income due to financial constraints leading to illegal squatting on government property and informal allocation and development,î notes Kamtukule. She suggests that as one way of making services cheaper especially for developers, government should consider bringing all service providers under one roof since the current system of service delivery demands separate capital contributions. ìThe local authorities could be responsible for the provision of water, electricity, roads and others. Kamtukule  notes that while private sector institutions including banks and private property developers usually serve the high income group, NGOs like the Centre for Community Organization and Development (CCODE) and Habitat for Humanity (HFH), who engage in self help housing projects for the low income, lack the technical and financial muscle to reach out to the masses. Kamtukule laments that there are currently no deliberate budgetary efforts to support housing production in Malawi.