WINDHOEK LOW-INCOME
HOUSING PROGRAMME
Submitted by:
THE NATIONAL HOUSING ENTERPRISE (NHE)
NAMIBIA
to
THE KREDITANSTALT FUR WIEDERAUFBAU (KfW)
FRANKFURT-GERMANY
PREPARED WITH THE ASSISTANCE OF S.U.M.-McNAMARA CONSULTANTS
DECEMBER 4th 1992
WINDHOEK
NAMIBIA
WINDHOEK LOW-INCOME HOUSING PROGRAMME
TABLE OF CONTENTS
Covering letter
summary
1. Introduction
2. Problem analysis
2.1 Central problem
2.2 Increasing housing problems
INCEPTION REPORT
A. Problems identified in the workshop
B. Comments
2.3 Land development policies
A. Problems identified in the workshop
B. Comments
2.4 High costs
A. Problems identified in the workshop
B. Comments
2.5 Inappropriate solutions
A. Problems identified in the workshop
B. Comments
2.6 Low incomes
A. Problems identified in the workshop
B. Comments
2.7 Institutional problems
A. Problems identified in the workshop
B. Comments
2.8 Non-participation of private sector
A. Problems identified in the workshop
B. Comments
3. Target population
3.1 NHE Priorities
3.2 The socio-economic survey
A. Demographic characteristics
B. Migration and urban-rural linkages
c. Aspirations and priorities
D. Employment
E. Income and expenditures
F. Savings
G. Affordability
H. Present housing conditions
I. Community organization and participation
J. Self-help potential
4. Objectives, concept and justification of the
Programme
4.1 Objectives
4.2 Programme outline
A. Basic hypothesis
B. Sub-projects and supporting components
c. Participation concept
D. Appropriate solutions
E. Affordability and subsidies
WINDHOEK LOW-INCOME HOUSING PROGRAMME
F. Replicability and cost recovery
G. Financing
H. Selection of beneficiaries
I. Institutional development
4.3 Justification
INCEPTION REPORT
4.4 Other related low-income housing projects
A. Some recent NHE's projects
B. Cooperation with the People's Republic of China
C. The Ombili Project
D. The Build Together Programme
E. Conclusion
5. Sub-projects and components
5.1 The upgrading Project
A. Specific target group
B. Background
c. General description of project
D. Activities
E. Components and costs
F. Selection of beneficiaries
5.2 The core-house Project
A. Specific target group
B. Background
c. General description of project
D. Activities
E. Components and costs
F. Selection of beneficiaries
5.3 The Loan-Guarantee Fund Project
A. Specific target group
B. Background
c. General description of project
D. Activities
E. Components and costs
F. Selection of beneficiaries
5.4 The Building Materials Revolving Fund
A. Target groups
B. Owner-builder improvement process in Katutura
c. Operation of the scheme
- Purpose
- Type of loans
- Procedures
- Repayment
- Personnel requirements
D. Activities
E. Costs
5.5 Community Development
6. Implementation
6.1 Executing agency
A. Legal base
B. organization and management
c. Financial status
D. Relation to target groups
E. Implementation capacity
WINDHOEK LOW-INCOME HOUSING PROGRAMME INCEPTION REPORT
6.2 Programme's organization and management
A. Steering Committee
B. Special Task Group
c. Management of the Loan Guarantee Fund
D. Consultant's assistance
6.3 Other participating agencies
6.4 Implementation schedule
6.5 Monitoring and evaluation
6.6 Contracting and procurement
6.7 Operation and maintenance
7. Costs, financing and related matters
7.1 Costs and sources of financing
7.2 Subsidies and loan conditions
7.3 Affordability and cost recovery
7.4 Disbursement schedule for KfW funds
7.5 Programme's cash flow
7.6 Financial control
a. Effects, assumptions and risks
8.1 Social effects
8.2 Economic effects
8.3 Environmental effects
8.4 Institutional and political effects
8.5 Assumptions and risks
ANNEXURES
1/A Participatory planning workshop results
2/A Comments on costs included in NHE loans
fB Comments on the implementation of the National
Housing Policy
3/A The socio-economic survey
/B Case studies-life histories
4/A Housing survey
/B Cost comparison of three housing processes
/C Alternative construction technologies
5/A Level of services in resettlement areas
/B Information campaign and video outline
/C Cost of upgrading services in resettlement areas
/D Loan Guarantee Fund proposal
/E Letter from SWABOU
fF Job descriptions for Cty.& technical assts.
/G Report on establishment and functions of committees
in resettlement areas
NATIONAL HOUSING ENTERPRISE
Head Office: 7 Omuramba Road, Eros " P.O. Box 20192, Windhoek, Namibia
Telephone (061) 37224 " Fax (061) 222 301
4 December 1992
K F W Kreditanstalt fur Wiederaufbau
Postfach 11 11 41
D - 6000
Frankfurt am Main 11
GERMANY
A'l"I'ENTION: DR. BICKEL
Dear Dr. Bickel,
LOW COST HOUSING PROJECT : WINDHOEK
The Inception Phase is now in the final stage of completion.
Attached to this letter is our Inception Report compiled
jointly by NHE and SUM-McNAMARA Consultants. This report
describes in detail the way the project will be implemented.
You will notice that the Project, as described in the Inception
Report, differs markedly from the original proposal, especially
with regard to the location, and the type of housing solutions.
These changes have been necessitated by the realisation that
the KfW grant money should be utilised in such a way that the
poorest people benefit from the Project.
We also hope that after perusal of the report, the questions
raised in your faxes of 6 and 20 October 1992, especially
regarding subsidies, will have been answered.
Obviously, with such major changes, we do not intend going
ahead with the project without the prior approval from KfW.
We are therefore anxiously awaiting your response to the
Report.
1
We would also like to express our satisfaction with the SUM
Consultants. Their professionalism which they displayed has
been beyond reproach. A good working relationship between
ourselves has been established which is a pre-requisite for the
successful implementation of the Project.
We look forward to hearing from you and take this opportunity
of wishing you a Merry Christmas and a prosperous 1993.
Yours sincerely,
T.!.-c!l~
GENERAL MANAGER
Attachments:
1. Inception Report
2. Annexures
2
WINDHOEK LOW-INCOME HOUSING PROGRAMME """" INCEPTION REPORT
summary
The Government of the Republic of Namibia and the
KfW signed a financial agreement for the execution of a
600 unit low-income housing project at otjomuise in
Windhoek, addressed to households with incomes below
3PHSL (In Oct.92 approx. Rs.2.490}. For this purpose, KfW
has granted an amount of OM. 9.600.000 to NHE. Due to
changes in the political and socio-economic environment
and in the perception of housing needs of low-income
groups, it was decided to begin implementation with an
Inception Phase where the original project would be
revised and, if found necessary, an alternative programme
proposed.
A German-Namibian consulting team was appointed t.o
assist NHE in this task, carried on between September an
December 1992. 960 families of squatters resettled from
Single Quarters and other areas, and 1700 families
registered in NHE's list of housing applicants were given
priority as beneficiaries. Socio-economic research on
these selected groups, housing surveys and other analyses
were carried on. Substantial differences were found to
exist among them.
The crucial point in the Inception Phase was a
Participatory Planning Workshop held in early November
with representatives of all interested parties. Housing
problems of the low income groups were analyses and a new
concept, the Windhoek Low-Income Housing Programme
proposed.
The central problem was identified as ''housing needs
of low income families are not sufficiently met by the
local market". Seven reasons were established the most
important causes: increasing housing problems, land
development policies, high costs, low incomes,
institutional problems and the non-involvement of the
private sector in this market.
The main objective for the Programme was established
as: "Improve access to housing for low-income groups,
applying new approaches and encouraging the participation
of the community and the private sector".
Rather than one single kind of solution as the
Otjomuise Project proposed, the Programme will address
the varied socio-economic situation of households with
incomes below the 3PHSL. It will be structured in three
different Projects, roughly aimed at households earning
averages of less than one PHSL, between one and two and
between two and three PHSL:
i) An urban and housing improvement Project for
the resettlement and squatter areas will provide
community centers, extend infrastructure and make
available title for the land and starter solutions.
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WINDHOEK LOW-INCOME HOUSING PROGRAMME "."" INCEPTION REPORT
ii) A 400 core-house Project will be developed on
at least three locations, addressed to families in
NHE's waiting list, and
iii}A Loan Guarantee Fund to encourage private
sector's involvement in providing housing solutions
for the low income population through guaranteed
loans in the range from Rs.15000 to 35000.
Two innovative components will support the upgrading
and the core-house projects:
* A Community Development Programme will be an
instrument for long term social and physical
improvement, and
* A Building Material Revolving Fund will assist
with loans and advise a process of home improvement
adjusted to each household's possibilities and
needs.
Responsibility for providing housing for the family
will be placed on the head of each household with the
Programme facilitating access to serviced land, finance
and technical and social assistance. Participation of
beneficiaries, affordability of solutions, initial
savings and strict cost recovery of loans have been
incorporated as essential concepts of the Programme.
Subsidies will cover community needs rather than
individual costs.
NHE will be the executing agency, and will make
available the necessary personnel and institutional
resources; it will be assisted in the task by the
Consultant's team. The MLGH, the Municipality, the
beneficiaries the private sector will have specific roles
during implementation. A Steering Committee will assure
the coordination and will monitor the execution, expected
to begin in early 1993.
KfW grant, equivalent at Rs. 17.280.000 will
mobilize more than double this amount.The total cost of
the Programme will be of Rs.34.904.300 (DM. 16.391.300),
that, besides KfW funds, will be financed by Rs.5.096.000
from NHE, Rs. 3. 528.300 contributed by the beneficiaries
and Rs.9.000.000 form the private sector. Out of this
total, Rs. 7. 882.000 will be applied for the upgrading
project; Rs.7.500.000 for the core-house project;
Rs.11.800.000 for the Loan Guarantee Fund project and Rs.
4.025.000 for the Building Material Loans Scheme. The
balance will be used for personnel, logistic and other
expenditures.
Design and implementation of the Programme is
expected to strengthen NHE executing capacities, to
provide experiences with new types of housing solutions
and to contribute to improve inter-institutional
coordination. The Programme fits perfectly in the
framework of Namibia's National Housing Policy and fully
corresponds to the guidelines of German development
policy.
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WINDHOEK LOW-INCOME HOUSING PROGRAMME~ INCEPTION REPORT-1
~ Introduction
The Government of the Republic of Namibia and the
KfW (the German Bank for Reconstruction and Development)
signed an agreement to co-finance the construction of
approximately 600 low-cost houses at Otjomuise.
Changes in the political and socio-economic
environment since the Project was designed in 1990, and
an increasing awareness regarding the housing problems of
low-income families in Windhoek led both NHE and KfW to
the conclusion that the original project could be revised
to better adjust it to the needs of lower income groups
than initially envisaged.
To assist NHE with Project implementation, a tender
for consultancy services was called, and a consortium
formed by SUM Consult, a German firm, and Kerry McNamara
Architects from Windhoek was appointed for the task.
It was decided to begin implementation with an
Inception Phase. A revision of the original Otjomuise
project with reference to the suitability of the site,
costs of solution in relation with affordability, subsidy
levels envisaged, and target population was to be made
and, if found necessary, an alternative programme be
proposed.
In the meanwhile, an important development affecting
the Otjomuise Project took place in Windhoek. Nearly 800
squatter families from Single Quarters, one of the target
groups originally identified as potential beneficiaries
of the Otjomuise Project, were resettled in July 1992 by
NHE to several locations in Okuryangava and Goreangab.
NHE indicated its interest in mantaining this group as
beneficiaries, but moving them to the Otjomuise site was
now out of question.
The Inception Phase lasted from September to
December 1992. A crucial step was a Participatory
Planning Workshop held in early November. Representatives
from NHE, the MLGH, the Municipality, the Communities,
the private financial sector, NGOs and the Consultants
spent two days at the Rossing Foundation in Khomasdal
with the objective of reaching consensus on a new concept
for the Project.
Housing problems of low-income groups were analyzed,
objectives and a programme concept proposed, resources,
contributions by different participants, expected
results, activities, assumptions and indicators of
success defined.
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WINDHOEK LOW-INCOME HOUSING PROGRAMME- INCEPTION REPORT-1
The Windhoek Low-Income Housing Programme described
in this report is the outcome of the workshop agreed by
the institutions represented. In Annex 1/ A a synthesis
of the workshop's conclusions is attached.
The proposal
team under the
Managing Director
Mr. Tom Alweendo,
was prepared by a joint NHE-Consultants
supervision of Mr. Axaro Tsowaseb,
of NHE and the general coordination of
NHE's General Manager.
Following members
programme's preparation,
full-time basis:
of NHE staff were involved in
some of them practically on a
Mr. Louis Wessels, Sr.Mgr.Tchncl.& Social Services
Mr. Louis Fick, Sr.Mgr.Finance,Plnning.& Control
Mr. Jurgen Lehnert, Manager Contracts
Mr. Gottfried Uandere, Mgr.Projects
Ms. Anna Muller, Self-help section
Mr. Schalk Kruger, Community Participation section
Mr. Adolf Botes, Architect
Ms. Maria Dax, Mgr. Public Affairs
Mr. Jonathan Sam, Media Producer
Mr. Adolf Wienecke, Sr. Draughstman
Ms. Estelle Martin, Office Administrator
Ms. Charlotte Dunstan, Confidential Secretary MD
The consulting team that worked in the preparation of the
Programme was formed by:
Mr. Juan A. Crispo, Chief Technical Advisor
Mr. Roland Ziss, Policy and Institutional
AdvisorMr. Chris Lewin, FinancialjCty.Development
Advisor ·
Ms. Njoki Ndungu, Cty.Development Advisor
from SUM Consult, and
Mr. Kerry McNamara, Field Coordinator
Mr. Andrew Walton, Construction Advisor
Ms. Sophy Shaningwa, Cty.Development Specialist and
Ms. Salmi Kaulinge, Cty. Development Specialist.
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WINDHOEK LOW-INCOME HOUSING PROGRAMME -INCEPTION REPORT-2
~ Problem analysis
2.1 Central problem
The central problem was defined at the Participatory
Planning Workshop as:
"THE HOUSING NEEDS OF LOW INCOME FAMILIES ARE NOT
SUFFICIENTLY MET BY THE LOCAL MARKET."
Causes resulting from this central problem may be
grouped under seven headings dealing with the increasing
housing problems, land development policies, high costs,
inappropriate solutions, low incomes, institutional
problems and the non participation of the private sector.
2.2 Increasing housing problems
A. Reasons identified by workshop participants
* Housing backlogs inherited from the past.
* No appropriate response to migration resulting
from influx control removal.
* Present escalated urbanization exacerbate the
problem.
B. Comments:
Windhoek is experiencing an accelerated process of
urbanization. The influx of an increasing number of poor
migrants results in the emergence of serious housing
problems. Stresses in the public systems of health and
education, sanitation, water, electricity and transport;
pressures on the land, the appearance of squatter
settlements, overcrowding of existing houses and plots
are now a reality previously unknown.
Preliminary findings of the 1991 population
compared with figures of the two previous
illustrate the situation:
Population of the District of Windhoek (1)
census
census
Annual growth rates %
Total
Urban
1970
75656
1981
110644
98662
1991 1970-81 1981-91
158609
144558
3.5 3.7
3.9
(1) Windhoek District has an area of 33489 square km; urban
Windhoek refers to Greater Windhoek (Windhoek, Khomasdal and
Katutura)
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WINDHOEK LOW-INCOME HOUSING PROGRAMME -INCEPTION REPORT~2
In 1992 the number of persons living in greater
Windhoek may be between 150.200 (assuming conservatively
an annual growth rate of 3.9 %) and 151.800 (assuming a
growth rate of 5.0 % for the last year).
According to the Municipality's town planning
office, in November 1991 Greater Windhoek had 23.334
houses (Windhoek 8.871, Khomasdal 2.994, Katutura
11.469). These houses have been officially approved and
inspected after construction. There are not many
permanent houses without a building permit in Windhoek,
probably not more than 100, so that the registered number
is probably almost identical with the real one. With an
average of 60 building permits per month, there are
24.000 houses in October 1992.
The total number of family dwellings or residential
units, including the 24.000 officially registered may be
estimated at 3 0. 000 ( 15. 000 in Katutura) , based on the
following hypotheses:
The vast majority of the houses consist of one
residential unit. There are only 180 apartment
houses with a total number of approximately 3. 000
flats that should be added to the number of houses.
The Single Quarters of Katutura consist of 146
blocks or row houses which originally had 2. 144
double rooms. There might be more than 10.000
people living there what may add another 1.000
units to the number of dwellings.
In Katutura a process of densification is
taking place characterized by non registered
subdivisions and temporary structures often
referred to as "backyard squatters". Though no
empiric information is available, the number of
backyard squatter units may easily exceed 1.000.
Families that have been recently resettled or
who are squatting in the northern areas of Katutura
count for another 1.000 provisional dwelling units
approximately.
The number of 30.000 residential units gives us an
average of 5.0 persons per family. This figure is
supported by a socio-economic survey conducted by the
Namibian Institute for Social and Economic Research in
1991, according to which the average number of people per
family in Katutura is five (mean = 5.1), but varies
considerably from a low 3. 2 in the new settlement of
Okuryangava to a high of 7.0 in the consolidated
settlement of Shamdumbala. Another interesting result of
that survey is that on average 1.6 families share a plot
in Katutura.
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WINDHOEK LOW-INCOME HOUSING PROGRAMME =INCEPTION REPORT=2
The following table shows the segmentation of the
housing market in Greater Windhoek:
Area Av. size of
dwelling 1)
(m2)
Av. con-
struct.2)
cost (R)
Av. plot
size
(m2)
Av. total
mkt.value
(R)
Windhoek
Khomasdal
Katutura
150
80
60
150,000
60,000
36,000
1,000
400
300
190,000
80,000
44,000
Sources: Rough estimates based on discussions with real estate
agents, contractors, house owners and municipal officers.
1) Only considering registered dwellings with permanent building
materials
2) Only building without land
Though there is no reliable data, the rental market
in Greater Windhoek is still very limited. Due to the
limitations of developed land and access to capital for
financing rental units, it is unlikely that the formal
market will respond rapidly to the increasing demand for
housing. Low elasticity of the formal market leads to a
rapid expansion of the informal market, particularly in
Katutura. The monthly rent for a room in a permanent
house may cost in Katutura between R 80 and R 150,
depending on services and location. The recent sprawl of
backyard squatters can be interpreted as an incipient
form of letting or subletting. Low-income families
looking for accommodation may even opt for squatting,
still a rather exceptional and heavily controlled
informal housing alternative in Windhoek.
2.3 Land development policies
A. Reasons identified by workshop participants
* Available land too expensive for low income
groups.
* Scarce land available for low income housing
programmes usually inappropriate for topographic
and location reasons.
* Existing urban structure pushes new low income
areas to the periphery.
* Pricing mechanism for land not fully geared to
incremental development.
* Present rating system does not allow special
betterment tax for specific areas.
* There is a single provider of serviced land for
low income groups in Windhoek.
* Survey and registration requirements too
expensive.
* Lengthy procedures to obtain proclaimed land.
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WINDHOEK LOW-INCOME HOUSING PROGRAMME -INCEPTION REPORT~2
B. Comments:
The question of the cost and availability of land is
a crucial issue for low-income housing programs in
Windhoek. There is not an open market for land as the
Municipality has a virtual monopoly on supply.
Theoretically the ground itself is free of cost. The
selling prices are established to cover only development
costs which, besides direct on-site costs include also a
25% contribution to primary road construction,
administrative, survey, design, legal registration,
financial and interim taxes costs. Costs for water and
electricity connections are additional.
Till recently, only capital costs for roads and
public lighting were charged directly, as capital costs
for the sewerage and water mains and reticulation were
recovered through monthly tariffs. This is now changed,
and capital costs for this i terns are included in the
outset prices.
In practice, it is obvious that land selling prices
include also some location value, as for a similar level
of services prices vary widely in different parts of the
city. A recent (Sept/92) survey done by the SWABOU shows
that average costs per m2 in Windhoek are nearly three
times as much as in Swakopmund, the second most expensive
city in Namibia, and ten times the price in Keetmanshoop.
AVERAGE COST PER M2 OF PLOTS
WINDHOEK SWAKOPMUND TSUMEB KEETMANSHDOP
" RANDS PER MZ
This average cost has increased practically tenfold
in the last 11 years; in 1981 it was Rs.4.50/m2. Prices
are administratively established on a case-by-case basis,
and each new development is supposed to pay its share of
costs for city infrastructures like nearby link roads. A
cross subsidy criteria exist so richer areas are supposed
to help defray costs of poorer ones.
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WINDHOEK LOW-INCOME HOUSING PROGRAMME -INCEPTION REPORT-2
Charging development costs in the selling price of
the plots is the only way for the Municipality to recover
them. This is a peculiar situation due to the fact that
the Municipality owns all undeveloped land in Windhoek.
Municipal regulations have no provision to recover future
costs of incremental development. Due to this fact, when
selling land, even for low-income housing, the
Municipality includes all present or future development
costs in the selling price; a reduction of initial
development standards would thus not necessarily
translate in a reduction of plot costs.
Although the principle of cost recovery is sound and
shall be maintained, the high development standards and
level of services, and the municipal methodology for
calculating and recovering development costs should be
revised. Current pricing policies make it extremely
difficult to find affordable land for low-income housing
programmes in Windhoek.
The introduction of a development tax to recover
future developments at the time they are introduced would
reduce initial land costs and allow for incremental
infrastructure upgrading; this is common practice for
most municipalities that do not own all land and thus
cannot recover costs through selling of the plots.
Although apartheid planning was discontinued in the
early eighties, current policies and planning and zoning
regulations seem geared to mantain a socio-economic
segregation of the city. Land made available by the
Municipality for low-income housing programmes keep
pushing them to isolated locations, always further away
from higher income residential areas and from the Central
Business District, where most job opportunities are.
Scarcity of services, job opportunities and
transport in these locations result in increased
hardships for the poor. The Programme's socio-economic
survey indicated that as an average, residents of the
resettlement areas spend on transportation nearly 25% of
family income. After more than five years of creating the
Hakahana settlement, where over 900 families with a
population of more than 4.000 people live, no school
exist in the area, and some children have to travel
several kilometers to find accommodation in another
area's school.
Efforts have been made to better integrate in the
city the core-house components of the Programme, locating
them closer to the western and northern fringes of town
in the vicinity of areas already populated.
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WINDHOEK LOW=INCOME HOUSING PROGRAMME =INCEPTION REPORT=2
2.4 High costs
A. Reasons identified by workshop participants
* Cost of basic infrastructure too high.
* High standards, of services, infrastructure and
urban development, inappropriate for low income
housing.
* Lack of people's participation in planning
alternative standards of services.
* Hign costs of building materials, mostly
imported.
* High costs of labour and expertise.
B. Comments:
The usual pattern of growth of the city is by the
development and proclamation of new townships. According
to availability of bulk services and other planning
considerations, the Municipality decide the creation of
an new township, surveys the land, prepares lay-out and
infrastructure plans, obtains approval and tender the
construction works.
New townships normally result in the creation of
thousands of new plots. There is a tradition of high
development standards in the city, probably arising from
the apartheid period, when most planning was done for
white settlers as black or colored people were not
allowed to own property.
Automobile traffic considerations seem to have top
planning priority. Expensive wide surfaced link and
distributor roads provide a framework where underground
electricity, water and sewerage reticulation is
developed. Abundant and exceedingly big surfaces (running
into several hectares each) are reserved for primary and
high schools, open spaces, and other community uses,
resulting in higher unit costs per plot. Plot areas vary
according to the planners views of what kind of income
level the new township should cater for, but the minimum
plot size is 300 m2. One by-product of these
unnecessarily high standards is that the expectancy
levels of the poor in Windhoek are also of a high order.
A limited time for constructing the house (usually 2
years) and a relationship between the cost of the plot
and the value of the house to be built on it (at least 4
times) is established, further accentuating economic
segregation.
All these standards and procedures are obviously not
geared for low-income housing projects. Not only
beneficiaries are excluded from participating in the
planning stage, but even the NHE does not have a say in
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WINDHOEK LOW-INCOME HOUSING PROGRAMME ~INCEPTION REPORT=2
it. While programming a new housing project, NHE will go
to the Municipality, express its needs and will be
offered on a "take-it-or-leave-it" basis whatever
"product" is then available. The concept that land-
development planning should be an integrated part of the
overall planning of low-income settlements is not yet
fully incorporated into the housing delivery process in
Windhoek.
SWABOU's already mentioned survey shows that
Windhoek is also the most expensive city in Namibia with
regard to water and electricity tariffs, municipal fees
and property taxes. On average, this charges are 32%
higher than in Tsumeb or Keetmanshoop and nearly double
those in Swakopmund.
The high cost of building materials stems also from
the past, as most building materials are still imported
from South Africa. A committee was called into being by
the Housing Policy Advisory Board some two years ago to
undertake a study of possibilities for locally
manufacturing imported building materials. This committee
has since become dormant. The NHP [Page 25-11 (b)] calls
for a study to solve this problem. It is recommended that
such a study be initiated.
Current Municipality's and NHE's procedures for
recovering costs of expertise applied to low-income
housing programmes could be reconsidered. Annex 2/A
discuss in detail the cost structure of NHE houses, and
proposes some adjustments. Part of the costs of expertise
is for research and development, it could become a hidden
subsidy, thus reducing the effective cost of access to
expertise of the poor.
2.5 Inappropriate solutions
A. Reasons identified by workshop participants
* There is little scope for participation of
beneficiaries in the planning process".
The formal housing process excludes low income
groups' involvement in deciding solutions.
Support structures for participation are not
provided by the agencies.
Product-oriented results in lack of knowledge
of the process.
*There is no tradition of community involvement;
There is not sufficient pressure from low
income families.
There was a lack of communication and
understanding.
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WINDHOEK LOW-INCOME HOUSING PROGRAMME =INCEPTION REPORT-2
The culture of group action was not developed.
Unrealistic expectations of the community, from
the government.
Low income
government.
groups fear to approach the
B. comments:
Participation of the beneficiaries was seen at the
Workshop as a crucial issue to improve the low-income
housing deli very system. It has not been the rule in
Namibia; new approaches to project design and community
development are needed.
Housing projects have tended to surge on a case-by-
case basis, more as response to some urgent need arising
than as implementation of longer term policies. The three
attempts to date to attend the housing needs of the lower
income brackets, the Pole & Roof (Gumpole) House, the
Hakahana Project and the Ombili Project, are the main
sources of reference and public experience.
Inappropriate locations, inadequate
solutions, poor initial planning, different
each project and bad communications result
"crisis management" approach, which does not
participation of the beneficiaries.
starter
rules for
from this
allow for
The Hakahana project run into severe problems with a
payment boycott, destruction of public buildings and
community resistance. Disconformity and public outcry
regarding the architectural starter solution resulted in
that only three years after completion substantial
structural reforms (moving outside the core the location
of the toilet) are now under way.
The autocratic colonial authorities were not easy to
approach for the low-income groups. Mistrust to the
Government remains, and there is a paramount need to
rectify this distortions of the past. Efficient
communication channels must be established in both
directions.
2.6 Low incomes
A. Reasons identified by workshop participants
* Many struggle to earn just enough for food and
clothing.
* Few jobs are available in Windhoek, a situation
aggravated by the current depression.
* Low levels of education and training.
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WINDHOEK LOW-INCOME HOUSING PROGRAMME ~INCEPTION REPORT-2
B. Comments:
Although a per-capita income of nearly US$ 1,200
places Namibia firmly among middle-income countries, this
figure tells only part of the story. The wealthiest five
percent of Namibians receive more than 70 percent of the
country's GOP, while the poorest 55 percent receive only
3 percent. To a large extent, the beneficiaries of public
resources have been the white owners of the formal
economy, not the broader population.The following tables
illustrate the skewed distribution of income in the
country.
Per-capita GOP by sector (1980 us $)
Year Total White Black wage Subsistence
modern employment
--------------------------------------------L----------
1980
1988
1,140
921
12,830
12,839
900
585
59
55
Average earnings by occupational category (1990 Rsjmonth)
Unsk. Semi-sk. Profssnl. Senior manager
Public Str. 270
Prvt.Str. 250-400
850
1,200
2,000
2,000-2,500
10,000
7,000-10,000
Katutura household cash income by quintile (1990 Rsjmnth)
All Q1 Q2 Q3 Q4 Q5
618 107 252 470 832 1,460
Source: UNICEF (HHNS, Preliminary Situation Analys~s, and Food
security Workshop), NBIC, 1990
At Katutura the lowest 40 % on the income ladder earn
12.8 %, the highest 20 % earn 46.2 % of the income.
Katutura: Percent of household receiving income from
selected sources (1990)
Gov. job Non-gov. Self-empl. Family Remit-
farm tances
Pensions
53.6 38.7 14.7 1.0 9.8 8.2
Average unskilled wage rates in 1990 were less than
half the 1989 Windhoek primary household subsistence
level (PHSL) of R 570 per month. Including housing and
transport, the Windhoek PHSL of R 650 per month is nearly
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WINDHOEK LOW-INCOME HOUSING PROGRAMME -INCEPTION REPORT-2
2.5 times the unskilled wage rate in the public sector.
Real wages have declined for all classes of workers since
1975. In 1990, the NBIC estimates that nearly 60 percent
of urban black households live below the PHSL.
Note: The PHSL is an unofficial urban poverty line for Windhoek. It
is calculated by the University of Port Elizabeth (SA) as minimum
local cost of a basket of goods required to maintain a household of
six. It includes costs of food clothing, fuel, light, washing and
cleansing materials (in Sept. 1992 was estimated at Rs. 830.00).
The Programme's socio-economic survey shows an
average monthly income of Rs.651,3 for households in the
resettlement areas, and of 1.392,2 for families in NHE's
waiting list. Unemployment in the resettlement areas may
run as high as 35%, considering temporary and self
employment as partially hidden joblessness. As mentioned,
high transportation costs further erode the meager
available income.
Education and skills are lacking. As an average,
head of households in the resettlement areas had only 4
years of formal education and little training. The
building industry, a major formal employers of semi-
skilled people tends to be an unstable source of income.
During the times of high building activity many of the
major private sector institutions involved in the
building industry initiate training schemes in order to
produce much needed building skills. Unfortunately, such
initiatives cannot be sustained during the slumps in the
activity.
2.7 Institutional Problems
A. Reasons identified by workshop participants
* National Housing Policy not fully implemented;
* Implementation strategies not yet developed;
* Mistrust, inefficient collaboration and
duplication of activities between different
agencies.
* Lack of
capacity.
* Self-help is
B. Comments:
experience, limited implementation
a slow process.
The approved National Housing Policy clearly define
activities and responsibilities of the various
implementing agencies. It also establishes goals and
criteria for all major issues that arise from the low
income housing process, such as levels of cost recovery,
subsidization and loan repayment discipline, response to
squatting etc.
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WINDHOEK LOW-INCOME HOUSING PROGRAMME ~INCEPTION REPORT~2
However, as implementation strategies are not yet
developed, confusion, inconsistencies and overlapping of
functions persist. The MLGH is of recent creation; the
Municipality and the NHE have been in a continual state
of transition since the mid 1980's. This process was
intensified over the period of Independence from 1988 and
is not yet finished. As a result, the roles of these
institutions, responsible for the delivery of
appropriate, sufficient and affordable housing solutions
for low-income groups remain not clearly established.
Further comments on the implementation of the NHP are
attached as Annex 2/B
2.8 Non participation of the private sector
A. Reasons identified by workshop participants
* The Private Sector does not participate in the
financing or the delivery of housing for low income
groups
* High risk of funding loans.
* Financial security is low because of high risk of
loss of employment or fluctuating incomes in the
informal sector.
* Restrictive financial legislation.
* Inexperience in low income portfolio management.
* Low income housing not considered profitable by
private developers.
* Low profit margin per unit and high possibility
of theft in townships, increases risks for
developers.
B. Comments:
This is the one problem area where application of
the policies advocated by the National Housing Policy
could have the most effect.
The Private Sector cannot become involved in loan
finance until, in the first instance, the money that they
can sell is sold at market related interest rates, and in
the second instance, the risk of lending money is
lowered.
Risk could be lowered by inducing reliable loan
repayment behavior. The public perception of such
behavior is ensured by people consistently repaying their
loans. The Zimbabwe experience indicates that the low
income sector is essentially a reliable sector in terms
of the repayment of loans.
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WINDHOEK LOW-INCOME HOUSING PROGRAMME -INCEPTION REPORT-2
The commitment to reliable repayment is induced by
proper participation practices; full involvement of each
beneficiary in making decisions as to identifying needs
and relating that to capacity to repay. Conflicting
policy formulation; erratic subsidization and failure by
the implementing agents to insist on repayment of loans,
will throw the above pattern into confusion, causing
misinformation, mistrust, public resistance and lack of
co-operation. This will increase the p_ublic perception
that low-income groups is a high risk group to lend money
to. It is therefore of paramount importance that the
authorities apply consistent project formulation
strategies, with due regard to participation, in order to
bring financial order to the low income housing market.
The private sector will then become involved.
The level of public theft in the Katutura is chronic
and does increase risk and cost for private developers
working there. Until the government and the people
themselves co-operate to reduce the level of theft, it
will continue to disrupt and undermine development at all
levels.
With regard to the negative effect of employment and
fluctuating incomes, it must be noted that the more a
beneficiary is liable to suffer from fragile or
intermittent sources of income, the lower the monthly
repayment of loans must be as a portion of his monthly
income. This discipline must be accepted by the
beneficiaries and the authorities. The beneficiaries must
also then take greater advantage of all self-help and
other strategies designed to lower the cost of housing.
The government should also encourage all the
implementing agencies to reduce the costs of the
provision of houses by efficient and productive project
execution. The existing cost structures of both the NHE
and the Municipality should be rationalized to reduce the
cost of housing delivery. It must also be noted that
misplaced subsidization also pushes up the cost of
housing at all levels.
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WINDHOEK LOW-INCOME HOUSING PROGRAMME -INCEPTION REPORT-3
~ Target population
The Agreement signed between the Government of
Namibia and the KfW established at 3 PHSL ( approx. Rs
2490 in September 1992) the maximum household income for
potential Programme's beneficiaries. Families with
incomes below this level may certainly be considered
among the low-income groups in Windhoek, and as a group
they probably include the bulk of households with housing
problems. It is not, however, a coherent group.
Significant differences exist between very poor families
with monthly incomes below Rs 300/400, and households
with incomes in the order of Rs 2400, which already
approach lower-middle class status.
3.1 NHE priorities
At the outset of the inception phase, NHE assigned
priority to three target groups as potential
beneficiaries of the programme, using criteria of income
and affordability as well as their present housing
situation:
i) households recently resettled from Single
Quarters and other areas,
ii) households included in the registration list
drawn by the Steering Committee for Squatters.
iii) Housing applicants registered in NHE's Waiting
List.
3.2 The socio-economic survey
A socio-economic survey was conducted in October 92
among households from these priority groups by a team of
7 interviewers supervised by the Consultant with NHE
personnel and logistic support. The objective was to
identify demographic, socio-economic and other
characteristics of the selected groups, their present
housing conditions, felt needs and priorities and
community organization potential.
Altogether 307 households were interviewed, of which
212 in the resettlement and squatter areas and 95
selected from the NHE Waiting Lists of housing
applicants.
Other available data, like the information included
iD NHE application forms and in a recent study of
Katutura by NISER (Namibian Institute for Socio-Economic
Research) was used to cross check survey findings.
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WINDHOEK LOW-INCOME HOUSING PROGRAMME =INCEPTION REPORT~3
A detailed description of the socio-economic survey
is attached as Annex 3/A. An interpretation of the main
findings is below. The following table resumes the
principal characteristics of the two groups:
SUBJECT SQUATTER/RSTTLD.AREAS
Age (years)
Years of formal education
Years living in Windhoek
Years living in settlement
Relatives/friends living with HH
Household size
No. family members living elsewhere
Monthly income in Rands
- Head of household
- Spouse
- Others living with HH
- Total household's income
Monthly expenditures in Rands
- Rent
- Municipal charges
- Transport
- Food
- Help to family
- Loan repayments
- Total HH expenditures
Available savings Rs
Money required for construction
Monthly installments
35.0
4.3
10.5
0.6
1.2
4.1
5.4
480.9
22.0
148.4
651.3
6.8
48.4
133.4
112.7
303.1
1028.1
3547.7
NHE LIST
33.2
8.3
19.4
12.3
pers. 0.5
p. 3. 2
p. 3.0
1077,2
137.8
177.2
1392.2
153.1
85.3
108.0
269.2
174.6
68.5
858.7
1923.9
11240.0
208.6
The table highlights the substantial differences
that exist between tne two groups. The resettled
squatters are relatively recent migrants in a transition
stage both in terms of physical settlement conditions and
social structure, and are either temporarily employed or
making their living in the informal sector. NHE's
applicants form a more urbanized and educated group,
usually with permanent jobs in the formal sector, higher
incomes and smaller, nuclear families. It is constituted
mostly by tenants in need of own housing considering the
high rents paid and high residential densities.
A. Demographic characteristics
Most primary households are rather small with only
1-2 children under 16 years. Average household varies
between 4.1 persons in the resettlement areas and 3. 2
persons among NHE applicants. Heads of household are
rather young {33-35} and their families are likely to
expand in the future.
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WINDHOEK LOW-INCOME HOUSING PROGRAMME -INCEPTION REPORT-3
The perception of nuclear family applies more to the
NHE applicants than to the resettled households. These
may comprise single heads with or without children, as
well as persons temporarily liaised, living together with
as many as 9-10 relatives and friends from their home
village. Traditionally, the hosts are obliged to
accommodate these mostly temporary visitors. When
working, guests are expected (but not obliged) to
contribute food or cash. They do not pay rent, and will
probably search own shelter as soon as they have secured
a modest source of income.
2 2. 4% of the heads of households in the
resettlement and squatter areas and 29.5% of the waiting
list are single mothers, with lower income and thus more
vulnerable than the male heads. Marital status
characteristics reflect complex social customs and
traditions. Male heads of households may have a "main 11
wife and children in the rural area and another family in
Windhoek; women are often abandoned by their partners and
live temporarily with other men. This may require special
measures to protect women's interests (i.e. in land
titles contracts).
B. Migration and urban-rural linkages
The majority of respondents were born outside
Windhoek. According to language spoken, 93% of the
resettled squatters heads of household originate from
owamboland, and on average have stayed 10 years in the
city. Among the NHE applicants, with an average length of
stay of 2 0 years in Windhoek, there is a more even
distribution of the national ethnic groups: Owambos
represent 28,4% of the total, Hereros 25,3%, DamarajNamas
31,6% and other 14,7%. This suggest that independence has
produced changes in rural-urban migration patterns.
Strong rural-urban linkages still remain,
particularly among resettled and squatter families, that
have an average of 5. 4 relatives living in the rural
place of origin. Most respondents visit their place of
origin regularly once or twice a year, periodically send
money to their rural families (monthly transfers average
R 113) and occasionally receive from them foodstuff such
as millet, dry spinach and meat. These urban-rural ties
are somehow less pronounced among NHE applicants,
characterized by nuclear families with a higher degree of
urban consolidation. They transfer to their rural
relatives an average of R 175/month.
To better understand this linkages, that have direct
incidence in the daily subsistence and might also have a
bearing in the self-help capacity of the households, two
family stories were studied in some detail. The findings
are attached as Annex 3/B
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WINDHOEK LOW=INCOME HOUSING PROGRAMME -INCEPTION REPORT-3
c. Aspirations and priorities
For both squatters and NHE applicants, the
construction of a brick shelter is the main and utmost
priority. Housing applicants are not interested in the
improvement of their settlement, but would rather build
in another location. The resettled and squatters are
anxious to improve and extend water supply (29.2%),
electricity or street-lights (27.7%), sanitation (24.8%)
and water-cum-sanitation (6.6%). Other priorities are:
road and transport improvement, refuse collection and
cleaning, communal centers and fencing (security).
Housing expectations of the resettled and squatters
appear realistic. 45% would like to invest R 2000 or less
while 75% estimate construction costs at R 6000 or less.
NHE applicants are far more ambitious, and 50% would like
to build a Rs. 10.000/50.000 house.
D. Employment
All NHE housing applicants are employed either in
the private (86.3%) or in the public (13.7%) sector. They
may thus be entitled to housing allowances, increasing
their affordability.
18.2% of the resettled and squatter heads of
households stated that they were employed by the public
sector, 4 7.1% by the private sector (not always
permanently, for ex. in construction), 25% are self-
employed, 8% unemployed or under-employed).
E. Income and expenditures
The data on income and expenditures can be
considered relative rather than absolute for several
reasons. Both income and expenditures tend to fluctuate
considerably, not only in the case of self-employed, but
also when more than one person (spouse, relative)
contributes to household's income. In addition, it is
probable that respondents have either exaggerated or
underestimated their income, depending on their
expectations.
Average monthly household's income of the resettled
and squatters amounted to R 626.3, while that of the NHE
housing applicants to R 1077.2. 44.7% of the resettled
and squatter household but only 16.9% of the applicants
depend on more than one earner.
The survey results indicate that 3-4 major income
groups can be identified: the lowest and most vulnerable
group with incomes under R 400 per month (one minimum
-18-
WINDHOEK LOW=INCOME HOUSING PROGRAMME ~INCEPTION REPORT-3
wage in
between
between
incomes
the public sector); a second group with incomes
R/401-1200; a third income bracket earning
R 1200/1600 and relative higher earners with
above R 1600 per month.
DISTRIBUTION OF HOUSEHOLD INCOMES
WLIHP socio-economic survey
25,----------------------------------------------------------. ..
20
15
10
5
. ... _
\\ .
...... ....._ __
\\_
.............. ..··
...............................................
0~----~------~------+-----~------~------+-------~----~
ZOO or le.ss 201-400 401-600 601-800 801-1000 1001-1200 1201-1400 1401-1600 1601 or more
Monthly income in rands
·"· Rsttlmt.& sqtrs. + NHE applicants
Data on household's expenditures is less reliable,
showing inconsistencies between declared incomes and
expenditures. According to survey results, the share of
expenditures does not exceed 60% of household's income,
a percentage that seems too low, particularly for the
lowest-income brackets. It may be assumed that both
income and expenditures, particularly of the resettled
and squatter households fluctuate considerably, and that
surplus available for housing is rather limited.
F. savings
Compared with most other Third World countries, the
rate of savings in Namibia is surprisingly high. 59% of
the resettled and squatters and 93.7% of the NHE housing
applicants have accumulated some savings, usually
deposited in the banks. 28% of the first group and 48% of
the second have saved more than R 1000. Although these
savings are not envisaged for housing but rather for
consumption, education or emergencies, it is obvious that
the habit of savings is widespread and may advantageously
be used for programme's financing.
-19-
WINDHOEK LOW-INCOME HOUSING PROGRAMME -INCEPTION REPORT-3
The experience of the Shipena residents, who have
jointly saved more than R 4000 for the purchase of land,
shows that there is also considerable scope for group and
not only individual savings.
G. Affordability
The survey results show that 38.2% of the resettled
and the squatters can afford installment of R 50 or less
per month, 30.5% can pay R 51-100 and 18.3% can afford R
101 or more. The corresponding share of NHE housing
applicants is 3.3%, 30.3% and 52.9%.
These results must be treated with caution. The
question regarding affordabili ty is rather abstract for
most respondents as long as it does not have concrete
information regarding proposed housing solutions and loan
conditions. It is therefore not surprising, that lower
income households tended to exaggerated their payment
capacity, whereas higher income earners underestimated
affordability (3-5% of their income).
On the other hand, it is difficult at this stage to
assess other household's resources which might be
mobilized for the purpose of housing. In addition to the
(often irregular) monetary incomes, these may include
non-monetary rural-urban transfers, existing savings,
relatives and friends loans and help of different kinds.
Comparison of rents currently paid by NHE applicants
and stated affordabili ty show that most respondents are
prepared to allocate a higher share of their income to
acquire own housing, particularly in the higher income
brackets.
Considering the limited reliability of the data on
affordability, payment capacity should be determined
based on income criteria in relation to the costs of
solution selected by the applicant and loan conditions.
Monthly installments should not exceed 10% of household
income for the lowest income brackets (up to R 400 per
month). This percentage may gradually be increased up to
a maximum of 25% for households with incomes above Rs.
1000 I 1100. These criteria need to be adjusted to the
individual cases. Larger households with considerable
obligations, probably would have to accept more modest
solutions.
H. Present housing conditions
The resettled families have been relocated to the
present locations together with their shacks whereas the
squatters have erected similar temporary shelters. These
consist mainly of corrugated iron sheets or cardboard as
walling materials; C.I. sheets, cardboard or canvas for
-20-
WINDHOEK LOW-INCOME HOUSING PROGRAMME =INCEPTION REPORT~3
roof and earth floors. As they have not been granted
titles as yet, none has started improving the shelter.
Infrastructure services are limited to few communal taps
and public toilets.
The NHE housing applicants, the great majority of
whom are tenants, occupy brick or cement units {93. 7%)
with C.I. sheet roof (95.8%) and a cement floor (94.7%).
Most of them (94.7%) have individual water connections,
private toilets (82.1%) and private or shared electricity
connections (85.3%). It may be assumed that their level
of expectations and aspirations is relatively high
compared with that of the resettled and the squatters.
r. community organization and participation
Only few of the respondents are acquainted with
existing community organizations {NGOs or other), and
even fewer are members of these. The committees in the
resettlement areas are not yet conceived as a
representative community organization, even though their
members may have been elected by the residents. This is
not surprising considering that relocation took place
only 2-3 months ago and the settlements are still in the
process of transition and social consolidation.
Nevertheless, embryonic community organization can
be noted in most of the settlements, as the communities
are collecting water charges (fees), cleaning public
toilets and (in one case) digging of trenches for water
pipes .
J. Self-help potential
38.6% of the resettled and squatters, but only 18.1%
of the housing applicants have some experience in
construction works. It may be assumed that a substantial
share of the first group will be willing and interested
to mobilize self-help including that of friends and
relatives in order to curtail labour and construction
costs. Others might require local builders to do the
construction work for them.
The majority of NHE housing applicants, on the other
hand, are less likely to show interest in self-help
construction as most lack the experience and the needed
time. They may, however, manage the extension of the
house by themselves and even get involved in actual
construction work at a later stage.
-21-
WINDHOEK LOW-INCOME HOUSING PROGRAMME- INCEPTION REPORT-4
~ Objectives, concept and justification of the
Programme
4.1 Objectives
The objective of the Windhoek Low-Income Housing
Programme as defined in the Planning Workshop is:
"Improve access to housing for low-income
groups, applying new approaches and
encouraging the participation of the
community, public and private sectors."
Two indicators have been established to measure the
success after implementation:
i) "Within two years 1,200 households with monthly income
up to 3 PHSL have improved their housing situation."
ii) "Financial obligations are met: arrears of loans and
municipal charges are less than 20 %."
The superior/longer term goal was defined as:
"Improve the living conditions of low-income
households through replicable and sustainable
housing development within the framework of
the National Housing Policy."
The following indicators have been formulated to
evaluate the attainment of this goal:
i) "Within one year of Programme completion, similar
projects have been initiated in Windhoek andjor other
Namibian cities." (Indicator of replicability) ·
ii) "After two years Programme beneficiaries continue to
improve their houses by investing cash or further loan
funds." (Indicator of sustainability)
4.2 Programme outline
A. Basic hypothesis
The Programme is based on the following hypothesis:
i) with adequate assistance and support, most
people will be able to gradually solve their
housing problems by themselves, mobilizing
resources that go far beyond their monetary income,
and
-22-
WINDHOEK LOW-INCOME HOUSING PROGRAMME- INCEPTION REPORT-4
ii) with proper incentives, the private sector
will get involved in the financing and provision of
appropriate housing solutions for the low-income
sectors.
B. Sub-projects and supporting components
Given their substantial differences, each identified
target group will require solutions adapted to their
specific socio-economic situation. NHE has decided to
develop a multi-component programme, to better adjust the
housing solutions to each group's (and each individual
family's) specific priorities, needs and financial
possibilities.
The Programme will be structured in three different
projects, roughly aimed at households earning averages of
less than one PHSL, between one and two and between two
and three PHSL:
i) An urban and housing improvement project for the
resettlement and squatter areas;
ii) A core-house project, and
iii) A loan guarantee fund project to encourage
private sector's involvement in providing housing
solutions for the low income population.
Two innovative components will
implementation of the first two Projects:
support the
A Community Development Programme will assist
self-help and community organization, as a tool for
long term social and physical improvement.
Including this component as part of a housing
programme is a relatively recent concept in
Windhoek, where housing has been envisaged as
provision of a finished product.
A Building Material Revolving Fund will assist
with loans and technical and social advise a
process of home improvement adjusted to each
household's possibilities and needs. An important
demand for house improvement loans exists also in
Katutura and other low-income areas of Windhoek;
after experience is gained the system could be
gradually extended to these areas.
c. Participation concept
Beneficiary's participation is a meaningful feature
of the Windhoek Low-Income Housing Programme, going far
beyond the mere provision of labour for self-help
construction. Representatives of the beneficiaries have
been involved in the definition of the Programme's
-23-
WINDHOEK LOW~INCOME HOUSING PROGRAMME~ INCEPTION REPORT-4
concept, that will allow each individual family a say in
community decisions and in designing its particular
housing solution.
On the other hand, following Namibia's National
Housing policy, responsibility for providing housing for
the family will in all cases be squarely placed on the
head of each household. The Programme will supply a
framework for hisjher efforts, facilitating access to
serviced land, finance and technical and social
assistance, but each family shall have to manage the
process of solving its housing problem.
D. Appropriate solutions
Adjustments to restrictive zoning regulations,
unnecessarily high land development and construction
standards not appropriate for low-income housing
programmes, of municipal land-cost calculation and
recovery procedures, were either introduced or at least
proposed as planning concepts for the Programme; they
will require further work during the Implementation
Phase.
Over-developed road networks; the use of expensive
underground as opposed to aerial electricity
distribution; zoning regulations that do not allow for
informal activities at home or establish very short time-
spans for building the house, thus hindering the concept
of housing as a process; the tendency to locate low-
income housing in far-away, non serviced areas are just
illustrations of some of the issues that the Programme
has addressed trying to adjust the solutions to real
needs and possibilities.
The purchase of well located "block" or undeveloped
land from the Municipality, to be developed at lower
standards and costs by the Programme will be a test for
the idea of more appropriate low-income housing
solutions.
On the other hand, research on owner-built houses,
on concepts and costs of prior low-income housing
programmes in Namibia and on alternative construction
technologies was carried on during the inception phase to
gain insights for the design. Annexes 4/A, 4/B and 4/C
provide detail on the findings.
E. Affordability and subsidies
The Programme will offer beneficiaries a range of
options, permitting the selection of a housing solution
adapted to their needs and possibilities. Affordabili ty
-24-
WINDHOEK LOW-INCOME HOUSING PROGRAMME- INCEPTION REPORT-4
of the selected option will be a guiding criteria to
provide loans, that in all cases will be secured by the
title deed over the land. An initial saving of 10% of the
cost of the selected housing solution will be required.
Subsidies will be used to increase affordability for
beneficiaries of the upgrading and core-house projects.
The National Housing Policy proposes the use of up-front
subsidies; traditional NHE's practice is to subsidize
interest-rates. As this matter is pending decision, it
was decided to stick to the usual interest-rate subsidy
system. (See Subsidies' section on chapter 6 for more
details on this issue) .
Community facilities, technical and social
assistance and certain technical infrastructures will be
provided as indirect subsidies by the Programme.
F. Replicability and cost recovery
Given the accelerating urban growth in Windhoek,
replicability of this kind of programme is of the utmost
concern; it was established as a superior goal in the
Participatory Planning Workshop. This concept involves
the implementation of appropriate solutions and strict
recovery of loans, a task that NHE is well prepared to
handle.
G. Financing
While designing the WLIHP, a basic concept has been
to utilize the KfW grant money as a catalyzer to mobilize
further resources. Besides the KfW grant and NHE's
counterpart contribution, the beneficiaries' and private
sector's contribution will now participate in financing
the Programme.
H. Selection of beneficiaries
All beneficiaries of the Programme will have to
comply with the two basic criteria established in the
Agreement:
i) That their monthly family income should be no
higher than three times the Primary Household
Subsistence Level (in September 92 1 PHSL=Rs 830, 3
PHSL=Rs 2490)), and
ii) That the maximum financial burden arising from
a loan for a plot and housing solution, in addition
to fees for use of municipal infrastructures, must
not exceed 25% of total household income.
-25-
WINDHOEK LOW-INCOME HOUSING PROGRAMME~ INCEPTION REPORT-4
Selection procedures will also make sure that
beneficiaries:
- Are Namibian citizens;
- Are older than 18 years (legal age);
- Do not possess another house in Windhoek;
Save 10% of total loan amount prior to final
approval;
- Have a stable (not necessarily wage) employment;
- Demonstrate payment capacity and affordability of
the credit.
Each target group will require a communications
approach and selection procedures adjusted to its
particular situation and the situation of women will be
given special consideration. The process of beneficiary
selection will be responsibility of NHE and the
Programme's Team, monitored and supervised by the
Programme's Steering Committee. Information regarding the
WLIHP should timely reach all interested parties.
I. Institutional development
All institutions involved in provision of low-income
housing are to some degree still in a process of
adjustments brought by Independence. Although there is a
sound Housing Policy, important aspects of it are not yet
being implemented, and inter-institutional coordination
problems persist.
As a concrete application of the Housing Policy,
design and implementation of the Programme is expected to
help solving some of these problems by getting all
institutions involved in the day to day work. The
Participatory Planning Workshops and the Programme's
Steering Committee will be tools to attain this goal. The
Programme should also contribute to strengthen NHE
executing capacities, allowing experiences with a variety
of new instruments that could be applied in future low-
income programmes.
4.3 Justification
Housing is one of the four priority sectors for
Namibia's first post- independence Government, the other
three being agriculture and rural development, education
and training and health. With its clear orientation
towards the urban poor the Programme is supporting the
general political goals of poverty alleviation and
overcoming the inherited imbalances between the different
ethnic groups of Namibian society.
-26-
WINDHOEK LOW-INCOME HOUSING PROGRAMME= INCEPTION REPORT-4
The Programme fits perfectly into the framework
established by the National Housing Policy. With
reference to the central goal it makes resources
available for providing "access to acceptable shelter in
a suitable location at a cost and standard which is
affordable to the individual on the one hand, and to the
country on the other hand." As far as basic housing
policy guidelines are concerned, the Programme:
is based upon participatory planning and
consensus building among the main actors involved,
- fosters home ownership and the responsibility of
the household for the housing process, limiting
public involvement to an enabling role,
strengthens the capacity of the participating
institutions,
supports the organization and development of
communities,
- assigns resources to meeting the needs of the
lowest income groups in Windhoek,
- puts a particular emphasis on upgrading and self-
help support,
provides affordable solutions and an approach
that is replicable and sustainable,
contributes to effective standard and cost
reduction reflected in low unit costs of the
different housing solutions,
- intends to operates with market interest rates,
maintains the necessity of strict repayment
discipline,
intends to rationalize the use of subsidies
limiting them to infrastructures, services and
community facilities,
- encourages the informal builders involvement in
the housing process,
mobilizes individual resources as much as
possible, both through the requirement of initial
savings and stimulating self-help labour, and
- facilitates private sector involvement in low-
cost housing finance through the loan guarantee
fund
Considering the number of envisaged beneficiaries
and the relatively short implementation period of two
years, the Programme is one of the first large scale
efforts to effectively implement the National Housing
Policy.
The relevance of the Programme is not only due to
size and amount of investment; politically more relevant
is the general approach that looks out for replicability
and sustainability. This approach is materialized in a
number of innovations: reduced standards and smaller
-27-
WINDHOEK LOW-INCOME HOUSING PROGRAMME- INCEPTION REPORT-4
finance requirements per housing solution, shorter loan
periods, market level interest rates also for smaller
loans, support of self-help construction through building
material loans and technical assistance, community
development support and the loan guarantee fund.
The Programme also corresponds fully to the
guidelines of the German development policy: it is
targeted to the poor, provides self-help support and
applies an approach that is both sustainable over time
and replicable in other locations. It also follows the
principles of the policy papers on shelter (process
orientation, mobilization of own resources, minimisation
of subsidies, subsidies only for public goods) and urban
development (promoting densification, private sector
participation, institutional strengthening, linking
settlement projects to urban management).
4.4 Other related low-income housing projects
A. Some recent NHE's Projects
In 1989 three projects with a total of 98 low-income
houses were executed in Tsumeb (26h), Grootfontein (26h)
and Gobabis (26h). Additionally, 20 starter shelters were
constructed in Okahandja, with a 2m2 toilet and a wash
trough each at a cost of Rs.2000 each. Selling price was
Rs. 3640 including the plot. In 1990 and 91 construction
activities dropped because of the reorganization of NHE
after independence. 38 houses were built at Otjiwarongo,
34 at Okahandja, 35 houses for policemen built on behalf
of the MLGH and a 316 low-income house project was
completed in Okuryangawa.
During 1992 NHE completed five projects with a total
of 81 fully finished houses in several areas of Windhoek
and in Swakopmund, with selling prices ranging from
Rs.32-108.000 and has 196 houses under construction in 4
different projects. For 1993 NHE is preparing projects
for Otjiwarongo {28h), Rundu {175h), Rehoboth {60h),
Mariental {25h), Keetmanshoop {30/50h) and for Katima
Mulilo, Luderitz and Ongwediva.
The typical NHE' s product is thus a package of a
contract built low-income solution on a plot developed by
a municipality, linked to a long-term loan. NHE has thus
delivered a great variety of housing solutions, from a
small Rs. 2. 000 wet-core to houses in the Rs. 100. 000
price range.
The Windhoek Low-Income Housing Programme will
permit NHE to experiment the partial unbundling of this
-28-
WINDHOEK LOW-INCOME HOUSING PROGRAMME- INCEPTION REPORT-4
traditional package. For the first time, a household will
be able to obtain a building material loan from NHE or a
loan from the private sector supported by NHE to finance
a solution not necessarily produced by NHE.
B. Cooperation with the People's Republic of China
In the framework of a general cooperation agreement
with the Government of Namibia, the Government of the
People's Republic of China assigned a soft loan of Rs. 50
million to the MLGH, of which 30 million have been
earmarked for NHE's housing projects. In September 1992
an agreement for Phase I was signed, envisaging the
construction of 135 conventional houses for middle-income
families, at a total investment of someRs. 6.000.000.
Nine different type of houses are to be constructed,
with areas ranging from 34 to 67 m2 and finishes
including ceilings, painting, floor covering and
provision for hot water. Average size will be 49 m2, and
average construction cost per house Rs. 44.345
(Rs.905/m2).
The initial Phase will be developed on land
belonging to NHE at Okuryangawa Extension I. Plots sizes
will be in the range of 250/300 m2; in June 1992 their
cost was approximately Rs. 4.500.
The houses will be built on a turnkey basis by the
China National Complete Plant Export Corporation.
Beneficiaries will have conventional NHE loans with terms
between 20/30 years for repayment. The loans will be
affordable to households with monthly incomes between Rs.
2.500/4.000.
In Phase II, under preparation, bigger houses
targeted for higher income groups will be constructed at
Dorado Park, with selling prices probably exceeding Rs.
100.000.
c. The Ombili Project
This Project was started in June 1990 to urgently
relocate hostel dwellers. The Municipality developed land
at Ombili, an area of Okuryangava in the northern part of
Katutura, with earth roads, public water taps, sewerage,
street lights and separate toilets. NHE was charged with
the construction of a toilet in each plot and a Market
Hall for at least 20 vendors.
People were then supplied with tents provided by the
UN and resettled to the area. In 1991 CRIAA, a French NGO
proposed to develop a housing project at Ombili, with
-29-
WINDHOEK LOW~INCOME HOUSING PROGRAMME- INCEPTION REPORT-4
French Government financial assistance. An initial phase
consisting of 120 single room core houses of 28 m2 (6.60
x 4.20) adjacent to the existing toilets was completed in
June 1992.
Construction costs per unit (materials and labour)
totalled R 10,000, an investment which CRIAA is expecting
the Municipality to pay back. The occupants pay rent to
the Municipality, R 10 per month for the plot and R 30
per month for the house. In addition, they pay service
charges of approximately R 40 to the Municipality.
Theoretically they also can acquire ownership, at monthly
instalments of R 27.70 for the plot and R 70 for the
house; but nobody has actually signed a purchase
contract.
The Ombili Project was initiated without proper
planning and with no participation of the beneficiaries;
CRIAA's involvement at a later stage began to operate in
a very difficult situation. As an ongoing improvement
process, it is certain to influence people's
expectations, and many experiences are relevant to the
WLIHP:
* CRIAA successfully negotiated the reduction of
plot sizes with the Municipality.
* Originally designed as a self-help project, the
beneficiaries did not really participate in the
construction process; the houses were built by
hired workers.
* Beneficiaries have the option between renting
or purchasing the house. However, the difference
between renting and purchase was not sufficiently
explained; there is no incentive for buying the
house.
* Loan and repayment conditions were established
too late and there is substantial rent default.
* There was no support for community development;
only recently the Ombili Committee was involved
into the project.
* Many original "owners" no longer live in the
plots. A dramatic densification process is going on
in the area; there is no control over the many
cases of co-occupants and subtenants.
* The occupants are not aware of their
maintenance responsibilities.
In a recent seminar CRIAA has evaluated the Ombili
experience. In a second phase currently under
preparation, that will involve the construction of
another 180 houses, it is expected that some of the
problems identified will be gradually corrected.
-30-
WINDHOEK LOW~INCOME HOUSING PROGRAMME~ INCEPTION REPORT-4
D. The "Build Together" Programme
With technical assistance from UNDP /UNCHS the
Ministry of Local Government and Housing is now launching
a National Housing Programme named "Build Together". It
will involve the beneficiaries, NGOs, local authorities
and central Government agencies.
Its stated principles are responsiveness to people's
needs and open to their participation, decentralized
implementation, mobilization and use of local resources
and materials, affordability and cost-effectiveness of
solutions. It stresses the concept of housing as a
process rather than as a product.
Beneficiaries should be households with monthly
incomes below Rs.1.250; inhabitants of unserviced or
squatter areas and low-middle income families without
access to credit from banks and building societies. It
has a rural and an urban housing sub-programmes.
The programme aims at assisting families to obtain
basic services like water, sewerage or electricity; to
improve existing houses, to obtain serviced plots, to
build new houses, to help communities to establish
building-materials production centers and community
facilities.
In each area of operation, a "Community Housing
Development Group" will be established, with
representatives of the beneficiaries, local, regional and
national authorities, NGOs and other interested persons.
The Programme also encourages the formation of community
based organizations that will initiate settlement and
housing development, hold regular meetings, assess the
repayment capacity of each household, establish a
management and cost-recovery system for communal
facilities and other tasks. Resource centers will be
established in each region of Namibia to centralize and
disseminate information on the Programme and health and
educational issues.
Ideally, programme's funds should be handled by the
municipalities, but NGOs, Credit Unions or Banks may also
be appointed as Agents for managing funds. Funds for the
Programme have been allocated by the Government from the
capital budget for housing, and basic procedures for
spending money established. All loans will be interest-
rate subsidized. Up to Rs.13.000 the rate will be 9%,
then it will increase by half point for each additional
Rs.1.000, to a maximum of 14,5% for loans of Rs.22.500 or
over.
-31-
WINDHOEK LOW-INCOME HOUSING PROGRAMME- INCEPTION REPORT-4
E. conclusions
As can be seen, the matter of low-income housing is
receiving higher priority since Namibia's Independence.
Some Programmes, like Ombili, started like an urgent
answer to a pressing situation; others, like the Build
Together Programme of the MLGH intend to put forward more
comprehensive solutions.
As noted before, coordination problems persist; the
diverse financial conditions, development standards,
housing solutions and selection criteria proposed by
different programmes might result in confusing signals to
the beneficiaries, that certainly are aware of everything
going on.
Increased efforts by all institutions involved are
required to gradually give more coherence to different
actions.
-32-
WINDHOEK LOW=INCOME HOUSING PROGRAMME -INCEPTION REPORT~S
~ Sub-projects and components
5.1 The upgrading Project
A. Specific target group
The sub-Project is aimed at 960 families, 860
resettled squatters plus some 100 families in the Shipena
squatter settlement. Over 70 % of these households have
monthly incomes of less than 1 PHSL (R 830 in Sept/92).
The following table and Plan No 1 give details of the new
locations; except for the Shipena squatters and the
Onghuuo Yepongo group, all other were resettled from the
Single Quarters area.
LOCATION
OKURYANGAVA
II
GOREANGAB
Total
NAME OF NEW SETTLEMENT NUMBER OF HOUSEHOLDS
Onheleiwa
Onyeka
NangolojOndunduluka
Joseph Nepando
Epandulu
Freedom Land
Onghuuo Yepongo
Shipena squatters
Greenwell Matongo
157
64
60
121
30
81
61
100
286
960
B. Background
The National Housing Policy establishes that
"squatters and other low-income families who are recent
migrants to urban areas will be settled in reception
areas on site-and-service plots, pending their eventual
entry into horne ownership schemes".
To implement this policy, the Ministry of Local
Government and Housing created two separate cornrni ttees:
the Squatter Steering Committee, reporting to the
Permanent Secretary of the MLGH, and the Single Quarters
(Otjornuise) Steering Committee, established in 1992 to
"eradicate within 6 months the Single Quarter problem".
Both include delegates from the MLGH, the NHE, the
Municipality and several other institutions.
Their usual form of operation is to relocate the
squatters to "reception areas". Partially developed land
is purchased from the Municipality, the ground is cleared
and levelled, and plot boundaries demarcated at the site.
-33-
NORTHERN
INDUSTR~AL
AREA
NHE-KfW
WINDHOEK LOW INCOME
HOUSING PROGRAMME
GREATER WINDHOEK
SHOWING
RESETTLEMENT AREAS
j PLAN No. I I
LEGEND:
I. EPANDULO
2. ONHELEIWA
3. OMBILI
4. JOSEF NEPANDO
5. FREEDOM LAND B SHIPENA
6. ODUDULUKA
7. NANGOLO
8. ONGHUUO YE PONGO
9. ONYEKA
10. ERF 39
II. ERF 41
12. GREENWELL MA TONGO
13. ERF 1430
14. ERF 1373 B 1374
15. NHE OFFICES
CORE HOUSE
PROJECT SITES e
RESETTLED AREAS Y
SCALE:
3
___J
kilometre
m DEC.92
r
NHE~ fVV
WINDHOEK LOW INCOME
HOUSING PROGRAMME
RESETTLEMENT AREAS
OKURYANGAVA
PLAN No. 5
LEGEND:
I. ONHELEIWA
2. EPANDULO
3 NANGOLO
4. ODUDULUKA
5 ONYEKA
6. ONGHUUO YE PONGO
7. SHIPENA
8. FREEDOM LAND
9. JOSEF NEPANDO
10 OMBILI
SCALE:
0 100 r----9
200
I
I
300 400
I I
metre
DEC.92
WINDHOEK LOW~INCOME HOUSING PROGRAMME ~INCEPTION REPORT~S
The main distributor roads are graded and basic services
like public water taps, communal toilets and dustbins
introduced. After preparation of the communities working
through local leaders, shacks in the original settlement
are dismantled and the families are moved in trucks to
the new location. A plot is then assigned to each family
on a 11 first come first served 11 basis and, as resources
permit, assistance for the construction of a house will
be provided.
Between both committees, 860 families were moved in
1992 to the Okuryangava and Goreangab areas in the
northern part of Katutura, where they now live in meager
conditions. An analysis of the present (Sept.92) level of
services in these locations was made and is attached as
Annex 4/A
View of the Onguuo Yepongo resettlement area
The Shipena squatters is a group that initially sub-
let the land where they settle from a person leasing it
from the Municipality; on expiration of the lease they
lost security of tenure. Socio-economic and physical
conditions in their community are similar to the ones
prevailing in the resettlement areas.
c. General description of project
Starting from the present situation, the aim of the
upgrading project is to gradually bring these settlements
up to urban standards of comparable areas in Windhoek.
-35-
WINDHOEK LOW-INCOME HOUSING PROGRAMME -INCEPTION REPORT-S
Title for land will be extended by NHE, and the
possibility of a starter solution (foundations, wet core,
a room etc) will be offered to each family. Land price
plus the cost or the starter solution selected will
constitute the basic loan. 10% of this amount ~hould be
saved by the interested household before signing of the
contract.
View of the Epandulu resettlement area
As far as possible, each housing solution will be
adjusted to the individual households' needs and
financial possibilities. When families can afford
increased repayments, building material loans will be
available for further improvements.
Infrastructures will be extended according to
people's priorities. Improved water supply, more communal
toilets and provision of street lights were the most
urgent needs detected in the socio-economic survey.
The Programme's community development component,
physically based on the Community Centers, will support
settlement upgrading, house improvements and community
build-up.
-36-
WINDHOEK LOW-INCOME HOUSING PROGRAMME -INCEPTION REPORT-S
D. Activities
Implementation of this Project will involve the
following activities:
* Information campaign (under way, see Annex 5/B)
* Community development programme (detailed below)
* Construction of community centers;
* Design, tender and construction of infrastructure
improvements;
* Definition of individual priorities with each
family;
* Assistance in regularization of titles for land
ana establishment of total cost of housing
solution;
* Initial saving;
* Signature of basic loan contract;
* Construction of starter solutions through self-
help andjor by local builders;
* Improvement/extension of starter solution with
support from building material loans;
E. Components and costs
i) Purchase of land:
ii) Extension of infrastructures
calculation in Annex 5/c)
* Street lights. Rs.
* Stand pipes Rs.
* Water lines Rs.
* Communal toilets Rs.
* Sewer lines Rs.
Sub-total
iii)3 Community centers
iv) Starter solutions
(Estimated 600 u @ Rs 3000 average)
TOTAL COST OF PROJECT
F. Selection of beneficiaries
Rs. 4.800.000
(details of
410.000
20.000
100.000
140.000
162.000
Rs. 832.000
Rs. 450. ooo
Rs. 1.800.000
Rs. 7.882.000
Only heads of households belonging to the originally
resettled group, thus holding a right to a plot
recognized by NHE would be eligible as beneficiaries.
-37-
WINDHOEK LOW-INCOME HOUSING PROGRAMME -INCEPTION REPORT-S
Information to these groups will be directly
transmitted by team field workers through a series of
meetings involving groups of 30/40 households, where the
residents will have the opportunity t.o discuss and ask
for clarifications and additional information.
As the resettled families are eager to start
improvements as soon as possible, NHE is already
organizing the information campaign. A video will be
produced as a tool for communicating the main issues.
Besides explaining the project, it will convey ideas
regarding urban life, house ownership and loan and
services repayment. (Outline of video in Annex 5/B). In
addition, written information on land purchase, starter
solutions and building material loans will be
distributed.
Each eligible household will then have the
opportunity to individually discuss its particular
situation with members of the project's team, and apply
for a loan adjusted to its needs and possibilities.
5.2 The Core-House Project
A. Specific target group
Household with monthly incomes between one and two
PHSL registered in NHE waiting list. NHE list of housing
applicants includes nearly 800 families in this income
category, who do not have access to private sector
finance for housing. They may live any place in Windhoek,
most of them as tenants or "backyard squatters" in
Katutura and Khomasdal, usually in brick houses with all
the services but in crowded conditions.Some of them have
registered with NHE many years ago.
B. Background
The core-house concept is a variant of the sites and
services idea that allows families with urgent housing
needs to move right away into the core and expand their
shelter as time and funds allow.
Some experience exist in Namibia with core-house
projects: the gum-pole program by NHE and a pre-NHE
program developed in 1981 by McNamara Architects.
However, no technical, financial or community development
support was provided and, after moving to the new
location beneficiaries were left to their own.
-38-
WINDHOEK LOW-INCOME HOUSING PROGRAMME ~INCEPTION REPORT~S
c. General description of project
This project aims at the development of 400 core-
houses in three different locations. over a 200 m2
serviced plot, cores of 18/25 m2 will provide affordable
initial solutions where families can move in immediately
and, with post-occupancy support, extend/ improve their
houses and develop the new communities thus created.
LOCATION: In the very restricted land market of
Windhoek, all efforts were made by NHE to secure well
located and appropriate land for the Project. "Block"
land with bulk services will be purchased by NHE and
developed internally with Project funds. For this
purpose, three plots have already been identified in
different locations shown in Plan N.1:
* Plot 41 (25.794 m2) or plot 39 (39.511 m2) in
Katutura, where 100 or 160 core-houses respectively
could be developed;
* Plot 1430 (39.627 m2) in Khomasdal extension 14,
where 160 core-houses will be developed, and
* Plots 1373 and 1374 (25.692 m2) also in Khomasdal
extension 14, where another group of 100 core-
houses will be built.
LAYOUT: A preliminary lay-out and development plan
has been prepared for erf 41 as a model. It proposes
reduced street standards and 200 m2 plots. Detailed plans
will be prepared in the implementation phase as a basis
for tenders. Plan N.2 shows the proposed model lay-out,
infrastructure lines and estimated development costs.
CORE DESIGN: Two alternative preliminary design
have been developed. From a minimum core of 18 m2 with
toilet and wash-trough, with construction costs estimated
at Rs. 8. 200, they can gradually expand up to a four
bedroom house. The basic cores and their growth
possibilities are shown in Plan N.3.
D. Activities
The
Workshop
Project:
following activities
as necessary for the
were identified
implementation
in
of
the
this
* Purchase of land from the Municipality in
acceptable locations;
* Introduce infrastructure and services at
affordable standards;
* Information campaign;
* Screen and select applicants, assign individual
plots;
-39-
I
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' '
1'1
:II
I!
,il
I ,
I
I
I
PUBLIC OPEN
SPACE
NHE-KfW
WINDHOEK LOW INCOME
HOUSING PROGRAMME
CORE HOUSE PROJECT
MODEL LAYOUT
TOWNSHIP:
OKURYANGAVA PROPER
ERF.41
PLAN No. 2
LEGEND:
WATER
SUPPLY LINES:
SEWERS:
STREET LIGHTS:
COSTS:
*ROADS:
550m Rl4 700 per m
=R.81 050.00
*SEWERS:
820m Rl34.00 per m.
=RI09 926.00
*WATER SUPPLY:
820m R.79.00 per m.
=R65 599.00
*STREET LIGHTS:
14 at R.l 500.00 each
=R 21 000 00
TOTAL: R277 575.00
99 ERVEN
COST PER ERF: R.2 803.80
SCALE:
"
r 110 ~ .30 40 50
~--- ~ ---,9 --4 4 metres
DEC.92
STREET
r--------------------~
I I
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1 PLOT SIZE 1 boundary
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r---------------------
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r-----------------l
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NHE-KfW
WINDHOEK LOW INCOME
HOUSING PROGRAMME
CORE HOUSE MODELS
PLAN No 3
metres
DEC.92
WINDHOEK LOW-INCOME HOUSING PROGRAMME ~INCEPTION REPORT-S
* Organize initial savings;
* Tender, assign contracts and supervise
construction;
* Organize and support relocation of beneficiaries
to project areas;
* Facilitate community development;
* Offer building material loans for house
improvement and extension;
* Identify needs for community facilities and
settlement improvement.
E. Components and costs
i) Purchase of bulk land Rs. 1.480.000
ii) Land development Rs. 1.120.000
iii) Construction of 400 core-houses Rs. 4.600.000
iv) 2 community centers Rs. 300.000
TOTAL COST OF PROJECT Rs. 7.500.000
F. Selection of beneficiaries
For NHE housing applicants complying with
established selection criteria, priorities will be
assigned according to the length of the period an
applicant has been on the list.
As soon as final design and costs are known, NHE
will begin an information campaign. As names and
addresses of all housing applicants on the Waiting List
are known, NHE can directly contact them through the post
and mail them printed information (project location, type
and design of shelter, costs and credit conditions). It
is probably not advisable to advertise the project
through television or radio, as this may raise excessive
expectations.
The interested shall be invited to either attend
information meetings or visit one of the NHE offices for
further clarification and filling-in an application form.
Project's social workers will then verify the data of the
application forms with employers, at present location,
etc. Applicant evaluation and selection should be
performed by NHE's Programme Team, and monitored by the
Steering Committee. If there are more eligible applicants/
than solutions, the core-houses will be assigned through\\
a public lottery system at which all interested might \\
assist. J
-42-
WINDHOEK LOW-INCOME HOUSING PROGRAMME =INCEPTION REPORT-S
5.3 The Loan Guarantee Fund Project
A. Specific target group
This Project is addressed to households with incomes
between 2 and 3 PHSL. Not less than 300, even 500 or more
families of NHE housing applicants are in this income
group. It is also probable that many other families
within this income range, although not registered in NHE
waiting list are facing housing problems.
B. Background
One of the goals of the National Housing Policy is
to supplement public funds supporting housing delivery
through the stimulation of private sector finance system.
In June 1990 the SWABOU submitted to the Ministry of
Local Government and Housing a proposal to encourage
private sector involvement in the financing of housing
solutions with costs ranging from 15000 to 35000 Rands.
Despite sufficient availability of capital funds,
private institutions are reluctant to attend the housing
finance needs of low-income groups due to the high risks
involved. To limit this risk, the creation of a Loan
Guarantee Fund was proposed, that would cover the insured
building societies in the event of a loss on the sale of
a repossessed property arising from default of whatsoever
nature by the borrower.
c. General description of project
Part of the funds granted by KfW for the Windhoek
Low-Income Housing Programme will be applied for the
creation of a Loan-Guarantee Fund, open for the
participation of any interested financial institution
(Potentially 5 Banks and 2 Building Societies). A
preliminary proposal was presented to the Building
Societies (see Annex 5/D).
The resulting reduction of risks will encourage
private financial institutions to extend loans to the
target group, thus making effective their existing demand
for housing. When a sufficient number of seekers of
housing solutions in the 15/35.000 Rs. range appears, it
is expected that the market will respond by supplying
them. Pressure on the Public Sector for the provision of
housing will then be reduced correspondingly.
Loans will be provided at market rates, permitting
the institutions to make a profit after administrative
costs are paid. An initial saving of 10% of the amount of
-43-
WINDHOEK LOW-INCOME HOUSING PROGRAMME -INCEPTION REPORT-S
the loan will be a precondition
scheme. It could be integrated
contract saving plan, but should
the loan.
to participate in the
in cash or through a
not be capitalized in
Each participating institution will manage its end
of the operation according to its own internal procedures
and criteria and assume the corresponding administrative
and publicity costs.
Loans should permit the borrower a flexibility of
choice. They could for instance be used for the purchase
of new or existing houses, flats in apartment buildings
or for the construction of a second house in a plot,
provided there is sufficient mortgage guarantee.
As the availability of proclaimed land is certainly
one of the major bottlenecks for providing housing
solutions, mechanisms other than mortgage based loans
have to be developed, including intermediary loans
through development companies that, after proclamation of
land could be transformed into mortgage loans.
After the first year of operation, a joint
evaluation by the Committee and the Consultants will be
made, focussing on the hypothesis made when establishing
the Fund. The characteristics of the borrowers, uses of
the loans, number and value of claims etc. will be
assessed, and adjustments proposed if required. If it is
found that it is not mobilizing private capital as
expected the Fund may be cancelled and the money used as
additional capital for the Building Materials Revolving
Fund.
In a recent letter to NHE, the SWABOU confirmed its
interest in the Loan Guarantee Fund idea (See Annex 5/E).
NAMIB Housing Society has also expressed informally
interest in participating in the Fund.
D. Activities
The
Workshop
Project:
following activities were identified
as necessary for the implementation
in
of
the
this
* Establishment of a joint committee including NHE,
Banks and Building Societies;
* Elaborate rules of Loan Guarantee Fund;
* Prepare Manual of Operations, with terms and
conditions of loans, information duties and control
mechanisms;
* Prepare loan agreements between NHE and
individual financial institutions;
* After signing the first agreement, establishment
of the Fund. Money will be held in trust in_ a
financial institution of NHE's choice.
-44-
WINDHOEK LOW-INCOME HOUSING PROGRAMME -INCEPTION REPORT-S
* Information campaign;
* Banks and Building Societies start giving risk-
reduced loans;
* Committee meets periodically to evaluate
experiences and adjust procedures;
* After one year of operation, evaluation of
performance and introduce modifications if
necessary.
E. Components and costs
An amount of DM 1.000.000 will be assigned for the
creation of the Loan Guarantee Fund from the KfW's grant.
Money will be held in trust by NHE at a financial
institution of its choice for an initial period of five
years .
F. Selection of beneficiaries
Each participating financial institution will take
care of promoting its own loan scheme through mass-media
campaigns. NHE will make available to all institutions
the names and addresses of families in the Waiting List
that comply with the income-level criteria so they may be
contacted directly.
Participating institutions will apply their own
lending criteria, as long as they remain within the two
basic criteria established in the Agreement. Loan
contracts will be signed directly between the lending
institution and the beneficiary. NHE will monitor that
loans supported by the LGF go to the targeted group.
5.4 The building materials revolving fund
A. Target groups
The Revolving Fund is conceived as an instrument
that initially will support the Upgrading and Core-house
projects ; eventually it could be extended by NHE to
cover other areas and low-income groups in Windhoek.
B. owner-builder improvement process in Katutura
With the purpose of gaining some insights into how
the owner-builder families use their houses and plots,
understand their priorities and the process of self-
improvement and extension of their dwellings, a housing
survey was carried on.
16 houses of different kind in Katutura and
neighboring areas were selected. Shacks in squatter and
-45-
WINDHOEK LOW-INCOME HOUSING PROGRAMME -INCEPTION REPORT~S
resettlement areas, SAAMSTAAN houses, different NHE
formal and alternative solutions were examined. All of
them were either totally built or improved/extended by
their owners.
Generally, the first priority was for additional
rooms rather than for improvements. Better off families
might follow a more conventional approach, seeking NHE
financial assistance. Most other cases were financing
improvements through their own savings, some with
employer's assistance. NHE-built core houses (the gumpole
program) have generated the most involvement by the
owners, but the lack of technical or financial assistance
has hindered the process.
The only technical assistance available is from the
builders hired for the job; materials are obtained both
new from formal suppliers or used from neighbors or
informal sources; no credit is available for their
purchase. A draft synthesis of the housing survey
findings is attached as Annex 4/A.
c. operation of the scheme
PURPOSE: The building material loan scheme will help
households to improve their housing situation according
to their particular needs and financial possibilities.
Building material loan schemes have proved in many
countries to be the most important single instrument to
promote self-help construction and mobilize the resources
of the households. According to the level of community ,,)
organization the system may also provide community loans
for the construction of community buildings, for the
improvement of infrastructure, to start a building
material production center of other community priorities.
TYPE OF LOANS: Will be for small amounts
(Rs.S00/3.500), short payback periods (6 months to 3
years) and at market interest rates (currently 17%). They
will be usually given in materials, although for
convenience of the beneficiaries, cash intake at the
field office may be organized.
PROCEDURES:
following steps:
A loan will usually involve the
* The household applies for a building
loan at NHE's field office (could be
material
in the
community center);
* The community development worker
socio-economic evaluation of the
determine what loan amount the
afford.
-46-
prepares
household
household
the
to
can
WINDHOEK LOW-INCOME HOUSING PROGRAMME =INCEPTION REPORT-S
* The self-help construction advisor prepares the
technical evaluation taking care that the cost of
the project does not exceed the affordable loan
amount.
* The loan committee makes sure that the applicant
qualifies for the loan and approves it on the basis
of the socio-economic and technical evaluations.
* The loan agreement is prepared and signed between
the loan taker and the loan agency.
* The loan is then given to the loan taker, either
in a one step arrangement if it is small, or in two
or three disbursements according to work progress
which has to be controlled by the self-help
construction advisor.
REPAYMENT: As soon as he receives the first
disbursement or material delivery the loan taker starts
paying back the loan in monthly instalments. After
cancelling 75% of the debt, the household will be
eligible to apply for a next loan to continue the
improvement of his house. If the borrower falls in
arrears the social worker has to find out the reasons and
a solution, together with the loan committee. In such a
way building material loans are flexibly responding to
the requirements of the individual household's gradual
consolidation process.
REQUIREMENTS OF PERSONNEL: The success of a building
material scheme depends heavily on field teams of two
persons that intermediate between NHE and the borrowers:
the community development worker {CDA) and the self-help
construction advisor ( SCA) . According to experiences of
successful schemes in other countries, a well trained
team working full time can address the needs of some 60
individual improvement projects per month: 2 0 in
preparation, 20 in implementation and_20 in termination,
assuming an average implementation time of three months
per project. Allowance should be made for an initial
period of three months when strong training assistance is
required to acquire experiences and adjust procedures. A
profile and job description for these two key personnel
is attached as Annex 5/F.
D. Activities
The following activities were identified in the
Workshop as necessary for the implementation of the
building material revolving fund:
* Prepare loan administration within the NHE;
* Prepare loan contract with conditions, terms of
payment, securities etc.;
* Identify and train construction advisors and
community workers;
* Information campaign;
-47-
WINDHOEK LOW~INCOME HOUSING PROGRAMME =INCEPTION REPORT~S
* organize initial savings (individual or group
deposits)
* Prepare flexible system of material supply,
including deliveries and security measures;
* Start material loans concentrating in one area;
* Evaluate experience after one month and introduce
modifications if necessary;
* Start loan disbursements in other areas;
* Follow-up loan repayment;
* Evaluate performance after one year:
beneficiaries, uses, arrears, assistance etc., and
introduce modifications if necessary.
E. Costs
Estd. 1000 initial loans of Rs. 4.025= Rs 4.025.000
5.5 Community development
A. Target groups
This component is conceived as an instrument
supporting the upgrading and core-house projects and will
be addressed to their specific target groups.
B. Background
Scant experience of support for community
development in urban programmes exist in Namibia, where
low-income housing has been till recently seen more as
the delivery of a finished product than as a process
involving the beneficiaries.
The Hanyeko Community Center, a grass roots
experience developed by the Hakahana residents with
little official assistance, proves that considerable
scope and potential exist for resident participation in
Windhoek. This group is dealing in an articulate way with
authorities and NGOs, manages a house improvement
programme and a community center built through their own
effort where a nursery, adult education and health
programmes, a brick-production facility and other
activities take place.
Embryonic community organizations exist among the
squatters and resettled squatters. In order to facilitate
the process of moving to the new settlements, the MLGH
and the Municipality selected group leaders and
encouraged the formation of committees. These committees
c0ntinue to exist and claim to represent the residents.
They now help organize collection of water fees on behalf
of the municipality, maintenance of public toilets,
digging of trenches for water network and other positive
experiences.
-48-
WINDHOEK LOW~INCOME HOUSING PROGRAMME -INCEPTION REPORT-S
However, until now community organization is weak;
the committees have little legitimacy vis-a-vis the
residents and information network between leadership and
community seems wanting. An evaluation of existing
organizations in the resettlement areas was made to
assess this issues. Annex 5/G contains the relevant
findings.
c. Objective and concept
The objective of this component is to support the
communities to organize themselves to cater for their own
needs. Active community involvement in the upgrading and
core-house projects may contribute to the:
* Mobilization of residents resources and self-help
potential;
* Development of community initiatives and
programs;
* Long-term upkeep and maintenance
facilities and services provided;
* Rationalization of implementation;
* Recovery of loans.
of the
This will require a long term process that should go
beyond project's life and scope. The communities may be
encouraged to identify and seek resources for activities
which do not necessarily correspond to those of the
sponsor (like job creation). The danger of developing
dependency through paternalistic attitudes towards the
communities should be avoided. Participation does not
emerge in a vacuum. It is a gradual process of common
acquisition of practical experience which leads to
solidarity among the residents.
The social workers shall assist the resident groups
to organize themselves and articulate their priori ties.
Rather than solve problems on behalf of the communities,
the social workers should encourage them to seek and
accomplish their own solutions. The common experience
with 'the implementation of priority schemes shall
contribute to legitimate present and future leadership of
the community.
The organization of group-saving schemes among
residents will be promoted. The socio-economic survey
showed that nearly 48% of the households in the
resettlement areas have incomes under Rs. 400 and thus
extremely low repayment capacity. Regular voluntary
contributions to a grass-roots saving group based in
personal trust and regulated by participant will increase
affordability and permit members access to housing loans.
For the core-house programme social work shall begin
immediately after selection of beneficiaries. Social
-49-
WINDHOEK LOW-INCOME HOUSING PROGRAMME -INCEPTION REPORT-S
workers shall motivate initial savings, assess the need
and priority for community centers and assist the
relocation process. In the post-occupancy stage, the
development of a sense of community in the new
settlements, with families mostly unknown to each other
and with no previous relations will be a difficult but
crucial step as a basis for social integration and core-
house extension.
place community center plan here
Community centers, where people can meet and discuss
their problems, and where the programme social workers
will find an appropriate environment for their work will
be an important tool for this component. The need for
such a place was frequently expressed to Programme's
social workers.
In the resettlement areas, construction of the
community centers would probably be a very good starting
point for project implementation and would give to the
people a clear signal that their participation is
required and sought. Discussion with community leaders
have been held to define responsibilities for management
and maintenance of such facilities. A preliminary design
of a possible prototype is attached as plan N.4.
To carry on the field work, it will be necessary to
train personnel as there is limited experience with this
kind of tasks in Windhoek. It is envisaged to conduct a
practical training programme including methodology on the
one hand and on-the-job experience acquisition on the
other. After a short initial course of 3-4 days, the
trainees shall commence working with the residents of the
settlements and their representatives. Initial
instruction and preparation shall include:
* Project discussion and understanding;
* Participative instruments;
* Communication with residents and their
.representatives;
* Leadership development;
* Handling of conflict situations;
* Elaboration of information system and campaigns;
* Planning,implementing and monitoring of
activities with the community;
* Promotion of saving.for housing management of the
building material loan programme.
D. Activities
The following activities
Workshop as necessary for the
community development component:
-50-
were identified
implementation
in
of
the
the
50JTH ELEVATION
NORTH ELEVATION
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ I[...---------------------------_, I
111 111
II 111
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:11 II ~-------------1 I
1111 II : II II
I fUTURE I Ill KITCHEN Ll I Ll Ll I
: IITE.A 5~RVERY : COURTYARD I I
Ill I II I
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Ill .JI I.J .JI
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11 ______ L _____________ ! ___ ~
PLAN
OfFICE. I
12,0 m2
MEETit'fj I WAITING ARE.A
"16,000 m2
TOILETS
4,"141 m2
TOILETS
4,"141 m2
SECTION A-A
TOTAL ARE.A Of BUILDING = 157, 1'15 m2
157,1'15 m2 ¬ R '070.00/m2 R 137,000
ADD:
DESIGN CONTINGENCY R '0 I 000
PLANNING, DESIGN ~ SUPERVISOR COSTS ¬ 0% R 5, 000
TOTAL ESTIMATED PROJECT COST R 150,000
NHE-KfW
WINDHOEK LOW INCOME
HOUSING PROGRAMME
PROPOSED COMMUNITY
CENTRE
PLAN No. 4
metres
DEC.92
WINDHOEK LOW-INCOME HOUSING PROGRAMME -INCEPTION REPORT-S
* Employ and train community development workers;
* Inform communities about the Windhoek Low-Income
Housing Programme;
* Verify whether community leaders are representing
the communities;
* Facilitate election of area representatives;
* Promote participation in construction, management
and maintenance of infrastructures and community
facilities;
* Make sites available and build community
facilities with community participation;
* Support group actions, i.e. community centers,
community services, cleaning up campaigns;
* Encourage environmental upgrading activities
(i.e. tree planting)
* Support the mobilization of households to improve
their homes;
* Foster the organization of saving groups;
* Organize participatory workshops with community
representatives to share experiences;
* Enable development of communication networks
between the residents, their representatives and
NHE, and provide information about possibilities of
support.
E. Costs
The bulk of the cost for this component will consist
in hiring and training personnel. Training costs and
hiring of two community workers are included in costs of
consultancy. The Ministry of Local Government and Housing
will provide two more community workers for the
Programme. To complement the training, after some months
of field work, a visit to relevant housing projects in
South Africa and Botswana is scheduled for Programme's
community development personnel.
A small (OM 40.000) Open End Community Fund is
provided in the budget. It will serve the purpose
of financing the production of videos and other
communication tools, and to support community
initiatives. Its use will be under the control of
the Chief Technical Advisor.
-51-
WINDHOEK LOW-INCOME HOUSING PROGRAMME -INCEPTION REPORT-6
~ Programme's implementation
6.1 Executing agency
A. Legal base
The executing agency of the Windhoek Low-Income
Housing Programme is the National Building and Investment
Corporation of Namibia Limited trading as National
Housing Enterprise (NHE) . The Corporation was established
in terms of Proclamation AG. 60 of 1978. It is a
statutory body of which the Government of Namibia is the
sole shareholder.
The Corporation had been under the supervision of
the Ministry of Finance until 1990 when the newly elected
Government created the Ministry of Local Government and
Housing to whom it is accountable today. The name was
changed into NHE, sign of the new image and identity in
post-independence time, and an institutional
reorganization started which was concluded by mid 1992.
Until the parliamentary proclamation of the new bill
of NHE which is expected for 1993, Proclamation AG. 60 of
1978 will remain the legal basis of the Corporation,
defining the objective as follows:
"The objects of the Corporation shall be the
financing of housing for inhabitants of the
territory and generally the providing for the
housing needs of such inhabitants."
By directives of MLGH of December 1991 NHE was
assigned "the main implementing agency of the National
Housing Policy where the private market fails. This
mandates the NHE to translate National Housing Policy
into action."
B. organization and management
With the institutional reform a new organizational
structure was introduced, shown in the attached chart.
NHE is led by a Managing Director and a General Manager.
The main operation functions are carried out by two
Departments under senior managers, one in charge of
financial planning and control, the other providing the
technical and social services. A third senior manager
takes care of the personnel and human resource
development department.
-52-
Senkrllllllll"
DEVB.OPMENT
COMPANY
Senlorllllllll"
FINANCEIAD-
MINISTRATION
1~:1 I I
I
Clonofli
Mot.
PROPOSED ORGANISATIONAL STRUCTURE:
NATIONAL HOUSING ENTERPRISE
APRIL 1992
WINDHOEK LOW-INCOME HOUSING PROGRAMME -INCEPTION REPORT-6
The two major changes in comparison to the previous
organizational structure of NBIC are the introduction of
regional offices and of task groups that operate on a
regional basis. During 1992 two regional offices have
been opened, one in Tsumeb (North), the other one in NHE
Keetmanshoop (South), each one run by one permanent
officer. The Katutura office hosts most of the collection
and some of the loan administration staff (approximately
3 0 persons) .
The task groups are preparing and assisting the
projects under community development aspects. A task
group is usually formed by a coordinator with a social or
technical professional background, a senior community
activator and a junior community assistant. There are
four task groups: North, South, Central and West. They
have special administrative support by two persons who
attend according to necessities. A slightly modified task
group model has been adopted as organizational structure
for the implementation of the Windhoek Low-Income Housing
Programme.
In November 1992 NHE's staff complement was 93: 41
in the finance department, 30 in the technical and social
services department, 12 in the personnel department, 4 in
the regional offices, 2 dealing with public relations, 2
top managers and 2 confidential secretaries.
As any other non-profit making parastatal NHE is
controlled by a Board of Directors appointed by
Government to represent the different public and private
bodies involved in housing. In 1992 the Board has ten
members: the Permanent Secretary of the MLGH (Chairman),
the Director of Housing of the MLGH, the Managing
Director of NHE, representatives of the Ministry of
Finance, the Ministry of Transport and of the
Municipality of Windhoek, representatives of a building
society, real estate agency, legal profession and NGO.
c. Financial status
NHE is a very solidly financed housing institution,
as shown in the attached balance sheet at the 30.06.92.
Own capital is more than sufficient to cover current
assets and liabilities. Debt equity ratio (shareholder's
funds to long-term liabilities) is 1: 12,7 and has
improved since the last financial year.
Over the years NBIC/NHE has continuously reduced
dependence from Government subsidies. When starting
op~rations in 1982, the entire budgetary requirements
were covered by Government; in the financial year 1988/89
-54-
NATIONAL BUILDING AND INVESTMENT CORPORATION
BALANCE SHEET
30 June 1992
Notes 1992 1991
R R
CAPITAL EMPLOYED
Share capital 5 68 512 248 60 389 348
Non-distributable reserve 6 37 854 753 29 400 382
TOTAL SHAREHOLDER'S FUNDS 106 367 001 89 789 730
DEFERRED INCOME 7 2 210 172 2 245 782
LONG-TERM LIABILITIES 8 8 412 351 12 076 so·;
116 989 524 104 112 019
EMPLOYMENT OF CAPITAL
FIXED ASSETS 9 3 964 717 3 773 527
SUBSIDIARY COMPANY 10 100 100
ADVANCES 11 87 628 685 82 258 269
CURRENT ASSETS
Sundry debtors 932 895 303 589
Funds at call and on deposit 27 636 583 16 610 155
Bank balances and cash 765 580 430 340
Short-term portion of advances 11 6 213 634 5 201 266
TOTAL CURRENT ASSETS 35 548 692 22 545 350
CURRENT LIABILITIES
Creditors 1 759 639 2 159 859
Short-term portion of long-term
liabilities 8 8 393 031 2 305 368
TOTAL CURRENT LIABILITIES 10 152 670 4 465 227
NET CURRENT ASSETS 25 396 022 18 080 123
116 989 524 104 112 019
WINDHOEK LOW-INCOME HOUSING PROGRAMME -INCEPTION REPORT-6
28 % of the revenues were Government funds, in the
financial 1991/92 only 15 %. Increasingly deposits and
mortgage repayments generate NHE's income and additional
funding requirements are raised on the national capital
market, particularly from the building societies.
The cost structure still suffers from the recent
political and institutional changes. Whereas before 1989
development costs were three times or more the value of
current expenditures (employment and administration
costs), this ratio has dropped dramatically in 1990 and
91 when employment and administration costs exceeded
development costs. In a similar way personnel
productivity has decreased since 1990 when per person
employed more than 8 housing solutions had been produced.
For 1992 not even 2 houses are expected per NHE employee.
When all projects which are in the pipeline are executed,
for the financial year 1992/93 a ratio of more than 6
houses per employee may be achieved. An analysis of the
cost structure for the past five budget years is
attached.
NHE has inherited a consequent full cost pricing and
recovery policy from NBIC. All house costs that can be
assigned to the beneficiary are capitalized and
incorporated into the selling price, including fees for
technical, financial and administrative services and
project identification. These overhead costs may total
from 15 % to 20 % of the selling price. An evaluation of
the criteria used by NHE for overhead calculation in the
case of low-income housing programmes is attached as
Annex 2/A. Other costs that cannot be attributed to the
beneficiary, like community development, a part of loan
administration costs, research and policy advise costs,
or should not be attributed, like interest subsidies, are
charged to the Government.
This market related pricing policy has definitely
the enormous advantage that selling prices are not
distorted and private developers are not kept away from
offering solutions in the same market segment. A relevant
critique however is that this market oriented house
production comes along with subsidized finance. NHE has
realized this problem and will try to apply market
interest rates for the first time in the envisaged
Programme.
Cost recovery was seriously affected by the
political and institutional changes since 1990, but has
significantly improved since January 1992 when the Board
of Directors decided to take legal action against
defaulters. From January till November 1992 approximately
300 served eviction notices were distributed and in 52
cases houses were repossessed. In October 1992 out of
5,600 loans approx. 1,350 (24 %) were in arrears with 3
-56-
NBIG COST STRUCTURE- R1 000
1992 1991 1990 1989 1988 1987
1. Capital Expenditure
Development Cost 5 779 5 438 12 499 14 087 15 853 9 953
2. Current Expenditure
Employment Cost 5 789 5 005 4 251 3 832 2 758 2 185
Salaries & Wages 3 427 3 116 2 707 2 525 884 503
Pension/Gratuities 527 495 551 511 400 344
Housing allo~ance 823 686 542 392 188 140
Hot or vehicle allo~ance 575 448 338 283 194 149
Other employment cost 437 259 123 121 92 50
3. Administrative costs 280 891 077 799 553 446
4. Financing Cost 2 053
5. Abnormal Cost 1 045 1 451 425
6. Total Current Expenditure 10 178 8 347 5 763 4 531 3 311 2 532
7. Time analpis of total Current
Expenditure
Public Relations 355 488 272 239 76 57
S~rvices to Government 74 334 342 147 150 160
Community Motivation 895 959 749 526 359 154
Development of systems 6 192 177 202 104 185
Socio-economic research 748 471 325 201 90 53
Loan administration 2 154 2 235 895 482 959 538
Technical Services 1 513 739 808 868 806 738
Marketing 63 218 473 668 570 467
Conveyancing 83 121 75 93 11 7 53
Total time value of current
expenditure 5 891 5 757 5 137 4 426 3 241 2 406
8. Staff Component 84 83 87 89 73 55
9. Value of outstanding
mortgages/loans 82 605 80 883 78 671 70 203 58 789 44 114
10. Number of outstanding loans 5 541 5 543 5 663 5 092 4 354 3 071
11. Number of houses produced 158 351 719 822 303 482
12. Financial ratios
{a) Technical Services Costs:
Development costs 0,26 0' 11 0,055 0,052 0,048 0,074
(b) Loan admin costs value of
loans 0,025 0,028 0,024 0,021 0,015 0,012
(c) loan admin costs per loan - R 389 403 335 291 220 175
(d) Marketing costs per unit
produced - R 399 521 558 813 437 959
13. Average salary per person - R 40 ?ga 37 542 31 115 28 370 25 808 23 123
14. Consumer Price Index (December) S3g,g 445,5(90) 401,7(89) 322,9(88) 275,8(87) 249,5(85)
15. Inflation Rate 21 '2% 10,9% 24,4% 17% 10,5%
Average 16,8%
WINDHOEK LOW-INCOME HOUSING PROGRAMME -INCEPTION REPORT-6
months or more. This represented an amount of
million, or 3,9 % of totally outstanding balances
million) . 97. 6 % of the envisaged payments
collected, compared to 63 % in December 1991.
R 3.3
(R 84
were
NHE has developed a simple and efficient way of
following up arrears and communicating sanctions with
letters of different color; a red letter is used to
announce eviction, providing the last chance to pay the
arrears or re-schedule the debt. Different possibilities
of re-scheduling debt exist, from short-term
acknowledgement to a totally new loan agreement after
reassessment of the property.
D. Relation to target groups
From the beginning the corporation had a clear
orientation to address the housing needs of the poor
usually defined as households with monthly incomes less
than three times PHSL. This limit is practically defined
by access criteria. Households with higher incomes have
access to private sector housing finance and housing
solutions offered in the market. Below the limit access
to home ownership of a market solution is very difficult;
banks and building societies are reluctant to lend to
this target group because of higher risks and
administration costs involved and private housing
developers are also not interested in poorer clients.
NHE, and previously NBIC, follows as strictly as
possible market principles of housing deli very, e.g. a
full cost approach of pricing, selection of beneficiaries
according to affordability, full cost recovery and
effective application of sanctions against defaulters.
Affordability criteria have excluded the poorest from
becoming project beneficiaries. 95 % of NBIC
beneficiaries have regular formal sector employment; 5 %
are self-employed and in a position to prove a certain
level and regularity of income, e.g. taxi drivers.
Informally employed households with irregular incomes are
usually rejected as borrowers.
From 1989 till 1992 altogether 1,593 housing
solutions have been produced and sold, all including the
costs of serviced land, with exception of the 299 toilets
at Ombili location in the lowest price category (R 2,000
per unit in 1991). The average selling price was R
35,000. Half of total housing solutions have been in the
price category between R 20,000 toR 40,000, accounting
for more than 46 % of total sales. The following table
p1ovides an overview of NHE construction and sales
activities since 1989:
-58-
WINDHOEK LOW=INCOME HOUSING PROGRAMME =INCEPTION REPORT-6
Selling prices of NHE housing solutions 1989 - 92
Unit selling price Total sales Av. selling
(R) No. (1,000 R) % price (R)
---------------------------------------------------------
up to 10,000 319 807 1.4 2,530
10,001 - 20,000 27 533 1.0 19,741
20,001 - 30,000 489 13,580 24.3 27,771
30,001 - 40,000 307 12,198 21.9 39,733
40,001 - 50,000 194 8,430 15.1 43,554
50,001 - 60,000 40 2,061 3.7 51,525
60,001 - 70,000 57 3,699 6.6 64,895
70,001 - 80,000 28 2,009 3.6 71,750
80,001 - 90,000 39 3,291 5.9 84,385
90,001 -100,000 65 6,171 11.1 94,938
over 100,000 28 2,995 5.4 106,964
---------------------------------------------------------
Total 1,593 55,774
Source: NHE Technical and Social Services Department
Note: The original prices have been adjusted assuming
an average inflation of 15 % per year.
100.0 35,012
Recent changes have been accompanied by a growing
awareness of the necessity of community development as an
integral part of low-income housing projects. Whereas
NBIC was very much oriented towards the provision of the
housing product, NHE is increasingly recognizing the
process character of low-income housing. The following
projects provided NHE with important experiences of self-
help and community development support:
3 "pole-and-roof" projects in Windhoek (29 units,
implemented in 1986), Gobabis (25) and Otjiwarongo (40):
The project provided a roof structure with a wet core and
foundations, at a selling price of between R 13, 000/R
28,000 including the serviced site; the beneficiaries
later on erected the walls with their own means in
Windhoek and the other towns with NHE support.
Site-and-services projects in Koes, Arob, Ariamsvlei
and Grlinau, rural locations in southern Namibia,
altogether 120 loans in the range of R 1,500/2,500 self-
administered by cooperatives, from 1988 till 1990.
j
The WAS (Windhoek Assisted Self-help) Project in
1991/92: 41 houses were built by local builders with
materials which the project provided in bulk; the
beneficiaries participated with their labour in
construction.
Hainyeko project in 1992: 907 units, originally
designed for male lodgers, were improved by the community
and converted into family houses, mainly by building
-59-
WINDHOEK LOW-INCOME HOUSING PROGRAMME =INCEPTION REPORT-6
separate toilets and
funds made available
boycott.
building additional rooms, with
by MLGH and NHE after a payment
A completely new experience with another target
group was the resettlement of more than 800 households
who squatted in front of the Single Quarters area in
Katutura. NHE, in accordance with the MLGH, bought the
land from the Municipality and organized a peaceful
resettlement process in only three months, from July to
September 1992, making intensive use of community
activators. It is this group of people who will be the
beneficiaries of the resettlement area upgrading
subprogramme.
E. Implementation capacity
NHE is a typical Third World housing institution as
far as it covers all functions of the housing process
which in industrialized countries with a fully developed
housing market are carried out by specialized agents:
buying developed land, planning of a housing scheme,
tendering and supervision of construction, selling
(traditional developer functions), financing (building
society function), resettlement, community development
and research (other functions). The normal NHE product is
a package of a contractor built low-income solution on a
plot which is developed by a municipality, linked to a
long-term loan with subsidized interest rates.
Concerning managerial and professional skills,
administrative efficiency, accountability and
institutional reliability NHE has achieved a high
standard, comparable to similar institutions in developed
countries. NHE will have the managerial and professional
skills for overall implementation of the Windhoek Low-
Income Housing Programme.
6.2 Programme's organization and management
NHE, as the executing agency for the Programme, will
have overall responsibility for all aspects of
implementation, including the coordination with other
participating agencies, the provision of sufficient and
adequate personnel and for the use of KfW funds. NHE' s
institutional resources will be made available to
facilitate the execution of Programme related tasks.
A. steering Committee
The implementation of the Programme will be
monitored and supervised by a Steering Committee. Chaired
by NHE's General Manager, the Committee will include
representatives of the Ministry of Local Government and
-60-
WINDHOEK LOW~INCOME HOUSING PROGRAMME ~INCEPTION REPORT-6
Housing, the Municipality,
the Beneficiaries and the
Advisor. NHE' s Programme
executive secretary.
the Financial Institutions,
Consultant's Chief Technical
Coordinator will act as
The Steering Committee shall meet at least
quarterly. Besides its monitoring and supervising
functions, it will coordinate actions between
participating agencies and will make final decisions
regarding selection of beneficiaries.
B. Special Task Group
NHE will create a Special Task Group to be in charge
of day to day implementation of the Programme. A senior
professional, reporting directly to the Senior Manager,
Technical and Social Services, will be the full-time
Programme Coordinator. He will organize and supervise the
execution of the upgrading and core-house sub-projects
and its supporting components. He will be assisted in his
task by a Field Coordinator provided on a permanent full-
time basis by the Consultant.
Three field teams, each one consisting of one
community development worker and one self-help
construction advisor will complement the task force. They
will establish a permanent presence in the project areas,
assisting with community development, selection of
beneficiaries, self-help improvements, building material
loans an related tasks.
Support from NHE's existing divisions will be
available to assist in specific tasks like preparing
technical designs for buildings and infrastructures,
tendering and contracting works, procurement of equipment
or materials, legal advise, loan administration,
financial control of the Programme, communications etc.
c. Management of the Loan Guarantee Fund
This sub-project will operate basically outside NHE,
which will have only controlling and supervising
functions. A Joint Committee presided by NHE and
including representatives of the Banks, Building
Societies and the Consultant will be established; it will
elaborate the rules and manual of operation for the Fund
and meet regularly to evaluate its performance.
NHE's Senior Manager of the Financial, Planning and
Control Division will be in charge of the day-to-day
supervision of the Fund. After participating in the
negotiations to establish the Fund, his tasks will
include to establish the Fund and monitor the account, to
receive and file copies of all guaranteed loan contracts
-61-
SPECIAL TASK GROUP
ORGANIZATIONAL CHART
NHE BOARD
MANAGING DIRECTOR
JOINT COMMITTEE
GENERAL MANAGER
STEERING
COMMITIEE
SENIOR MANAGER SENIOR MANAGER
FINANCIAL PLANNING TECHNICAL AND SOCIAL
AND CONTROL SERVICES
CONSULTANTS
PROGRAMME
COORDINATOR
I
I I
LOAN GUARANTEE FUND UPGRADING
BUILDING
CORE-HOUSE
PROJECT MATERIAL PROJECT LOANS
I I
3 FIELD TEAMS
COMMUNITY DEVELOPMENT WORKER
SELF-HELP CONSTRUCTION
WINDHOEK LOW-INCOME HOUSING PROGRAMME -INCEPTION REPORT-6
and evaluate claims. He will be assisted by NHE's staff
from his Division. No additional personnel will be
required. The attached chart shows the proposed
organization for Programme's implementation.
D. Consultancy support requirements
The Consultant's tasks for the implementation phase
can be classified into three categories:
related to the KFW supervision and
conditions (countersigning cheques,
and evaluation, progress reports, etc.).
be the responsibility of the Chief
Advisor, assisted by the Field
Advisor.
* Tasks
control
monitoring
They will
Technical
Coordinator
* Tasks related to skills that are not readily
available at NHE but necessary for successful
implementation (training experts, construction
advisors, community development workers, advisors
on building material loan scheme and on policy
issues, evaluation and programme revision, etc.) .
These tasks will be organized and performed by SUM
Consult's team of international advisors.
* Tasks related to skills that are basically
available at NHE but not for the Programme because
of personnel shortage (community workers and field
coordinator) . They will be performed on a permanent
basis by Kerry McNamara Architects personnel. NHE
has expressed interest in the possibility of
including the hiring of building technicians as an
extension of the consultant's contract.
With reference to the different activities
identified to carry out the Programme components the
following observations can be made:
IMPROVEMENT OF INFRASTRUCTURES AND SERVICES: As
these kind of activities are usually carried out by
municipalities, NHE does not have direct experience with
this component. Technical skills are however highly
developed at NHE. Some limited support may be necessary,
e.g. for the introduction of new low-cost sewerage
solutions.
CORE-HOUSE PROJECT: The Programme component where
NHE has most experiences and which fits best into
existing routines. Limited support may be useful to
develop appropriate standards.
LOAN GUARANTEE FUND: An innovative component with
little personnel requirements. The head of the finance
department who helped develop the proposal will assume
-63-
WINDHOEK LOW-INCOME HOUSING PROGRAMME -INCEPTION REPORT-6
the implementation responsibility himself. Support is
required to monitor performance and adjust the operation
procedures.
BUILDING MATERIALS LOAN SCHEME: Although there are
some precedents (WASP, Hainyeko), implementation capacity
for a large-scale building material loan scheme is
limited. Support is required to elaborate a detailed
manual of operations, train construction advisors and
introduce a monitoring system.
COMMUNITY DEVELOPMENT SUPPORT: Implementation
capacity for this component is limited; NHE has some
experiences in this field gained in small pilot projects.
Support is required to elaborate procedures and train
community development workers.
6.3 Other participating agencies
Besides NHE and the Consultants, implementation of
the Programme will involve the active participation of
the KfW, the Ministry of Local Government and Housing,
the Municipality, the beneficiaries, the private sector,
other public institutions and Non-Governmental
Organizations.
At the Participative Planning Workshop
contributions from these agents were defined
expected result (see Annex 1/A for details);
cover the following areas:
KfW: Donor of funds
specific
for each
they will
MLGH: Coordinate implementation of the National
Housing Policy; nominate a delegate for the
Steering Committee; provide community development
personnel (to be trained by the Programme); assist
in coordinating with the Municipality a revision of
development standards, in informing the community,
send customers for loans.
Municipality: Nominate delegate for Steering
Committee, provide personnel to be trained and
assist with training for special purposes; provide
land for community purposes; provide technical
information; make available collection points for
loan repayment, sell land for core-house projects
and try to modify cost recovery procedures to allow
for incremental developments.
Beneficiaries/community: Elect and nominate area
representative for Steering Committee; organize
labour, management and maintenance of community
centers; initial savings, loan repayment and
management of housing process; participate in
design of appropriate solutions and assist in
spreading of information.
-64-
WINDHOEK LOW~INCOME HOUSING PROGRAMME =INCEPTION REPORT-6
Private sector: Nominate representatives for Loan
Joint Committee, organize initial
grant guaranteed loans with own
Guarantee Fund
savings and
resources.
NGOs: Provide trainees, share and help disseminate
own experiences with Programme and others.
Efforts will be made to coordinate with the
Ministries of Health and Education the provision of
services under their responsibility.
6.4 Implementation schedule
After approval by
implementation of the
Programme is expected to
work program is attached.
KfW of the Inception Report,
Windhoek Low-Income Housing
start early in 1993. A general
6.5 Monitoring and evaluation
Appropriate monitoring procedures for each different
sub-project and component will be elaborated. Day-to-day
supervision and monitoring of implementation will be the
responsibility of the Programme Coordinator assisted by
the consultant.
An evaluation of the operation of the Building
Materials Loan Scheme is scheduled for July/93 to assess
the feasibility of extending its operation to other
areas.
An evaluation of the Loan Guarantee Fund is
scheduled after one year of operation. Details of its
purpose are given in Annex 5/D.
A Participatory Planning Workshop to evaluate
progress and propose adjustments if required is scheduled
for March 1994. At the end of the Consultant's assignment
a final evaluation will be prepared, and recommendations
for the continuation of the Windhoek Low-Income Housing
Programme included.
6.6 Contracting and procurement
All contracts for works and purchases of materials
will be performed in accordance with the conditions
established in the Financing Agreement and Separate
Agreement.
NHE current tendering and contractual procedures are
fully in accordance with internationally accepted
commercial practices. They are referred to the Standard
-65-
COMPONENT
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I 1 I I I I 1 I : I I I I 1 I I I 1 I
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1 ' I I I t I I I I I I 1 I ! I I I I
CMNTY. OEV. SPEC. 2
I I i I l ~
NHE-Kf'W
LOW INCOME WINDHOEK
HOUSING PROGRAMME
WORK PROGRAMME
FOR THE
IMPLEMENT AT ION PHASE
DEC.92
WINDHOEK LOW-INCOME HOUSING PROGRAMME -INCEPTION REPORT-6
Contractual Terms and Conditions developed by the South
African Association of Consulting Engineers.
6.7 Operation and maintenance
Operation and maintenance of all public
infrastructures: streets, water, sewerage and electricity
lines are the responsibility of the Municipality of
Windhoek, that also collects the garbage and, in future,
will undertake maintenance of the aqua-privies. To defray
the costs, monthly fees are charged as "Remunerative
Services".
The existing public toilets are been operated and
mantained by the families using them; it might be noted
that, despite an intensive use, they are extremely clean
and well kept. For the use of communal stand pipes a fee
to pay the Municipality's charge is collected by the
committees. A similar system will be used for future
extension of these services.
The community centers will be operated and mantained
by the communi ties, that will also collaborate in the
construction. This question is already under discussion
with committees' members in the resettlement areas with
the aim of reaching agreement on the modes before
beginning the construction.
As already stated, each head of household will be
responsible for managing hisjher house construction
process and for mantaining the dwelling.
-67-
WINDHOEK LOW~INCOME HOUSING PROGRAMME-INCEPTION REPORT-7
~ Costs, financing and related matters
7.1 Costs and sources of financing
The total cost of the Programme will be Rs.
34.904.300 equivalent to DM 19.391.300 (exchange rate
used for all calculations is 10M= Rs.1,8). Out of this
total, Rs. 17.280.000 (DM 9.600.000), 49,5% will be
financed by KfW grant contribution; Rs 5.096.000, 14,6%,
will be NHE counterpart contribution; Rs. 3.528.300,
10,1% will be the beneficiary's contribution in cash and
as sweat equity, and Rs. 9.000.000, 25,8% will be private
sector funds mobilized by the Programme.
SOURCES OF FINANCING
PRIVATE SECTOR (25,8"1.)
KfW (49,5'1.)
BENEFICIARIES (10,1"1.)
NHE (14,6"/.)
22,6% of total Programme funds will be used for the
upgrading project (25, 6% of KfW funds); 21,5% for the
core-house project (29, 7% of KfW funds); 33,8% for the
loan guarantee project (10,4% of KfW funds); 11,5% for
the building materials revolving fund (16,4% of KfW
funds). The remaining 10,6% (17,8% of KfW funds) will be
used for other purposes as detailed in the attached
Programme's budget.
Y. OF KFW FUNDS
Projects and components
CONSULTANTS (12,5'1.)
CTV.DVLPT.FUND (0,4'1.) UPGRADING (25,6"/.)
BLDG.MAT.LOANS ( 16,4'1.)
LN.GRNTEE FUND (10,4"/,)
CONTINGENCIES (5,0'1.)
CORE·HOUSES (29,7"/.)
-68-
WINDHOEK LOW-INCOME HOUSING PROGRAMME - GENERAL BUDGET
SUB-PROGRAMMES/ NR.OF HSG. UNIT TOTAL TOTAL SOURCE OF FINANCING 'l. OF 'l. OF
COMPONENTS SOLUTIONS COSTS RS COSTS RS COSTS DM KfW-DM KFW-RS NHE-RS BENEF-RS PRVTE.SECTOR TOTAL COST KfW FUNDS
1. UPGRADING RSTLT.AREAS 9b0 7.BB2,0 4.378,9 2.457,2 4.423,0 2.545,7 913,3 0,0 22,58 25,b0
Land & basic infrastr. 960 5,0 4.800,0 2.bbb,7 I.Obb, 7 1.920,0 2.400,0 480,0 XX
* lnfrastr.extension XX 832,0 832,0 462,2 430,5 774,9 45,1 12,0 XX
* Starter solutions bOO 3,0 1.800,0 1.000,0 739,6 1.331,2 77,5 391,3 XX
* Co11unity centers 3 150,0 450,0 250,0 220,5 396,9 23,1 30,0 XX
2. CORE-HOUSES 7.500,0 4.1bb, 7 2.849,7 5.129,5 1.630,5 740,0 XX 21 ,49 29,b8
Land & basic infrastr. 400 3,7 1.480,0 822,2 XX XX 1. 332' 0 148,0 XX
* Land development 400 2,8 1.120,0 622,2 529,2 952,b 55,4 112 ,o XX
* Core-house construct. 400 11,5 4.600,0 2.555,6 2.173,5 3.912,3 227' 7 4bO,O XX
* Community centers 2 150,0 300,0 1bb, 7 147,0 2b4,b 15,4 20,0 XX
3. CONTINGENCIES 110% of tl 908,5 504,7 477 ,o 858,5 50,0 0,0 o,o 2,b0 4,97
4. LOAN GUARANTEE FUND 11.800,0 b.555,b 1.000,0 1.800,0 o,o 1.000,0 9.000,0 33,81 10,42
LGF 1.800,0 1.000,0 1.000,0 1.800,0 XX XX XX
400 Lns/2yrs 25,0 10.000,0 5.555,6 XX XX XX 1.000,0 9.000,0
5. BLDG.MATERIAL LOANS 1000 4,0 4.025,0 2 .23b 1 I 1.57b,B 2.838,2 311,9 875,0 o,o 11,53 16,42
b. CTY. DEVELOPMENT FUND 80,0 44,4 40,0 72,1 7,9 XX XX 0,23 0,42
Production of 2 videos 20,0 11 '1 10,0 18,0 2,0 XX XX
Unassigned bO,O 33,3 30,0 54,1 5,9 XX XX
7. NHE PERSONNEL COSTS 550,0 305,6 o,o o,o 550,0 o,o o,o 1,58 XX
B. CONSULTANTS 2.158,8 1.199,3 1.199,3 2.158,8 o,o o,o o,o b, 18 12,49
Inception phase 519,8 288,8 288,8 519,8 XX XX XX
l1ple"entation phase 1.638,9 910,5 910,5 1.b38, 9 XX XX XX
9. TOTALS 34.904,3 19.391,3 9.bOO,O 17.280,0 5.09b,O 3.528,3 9.000,0 100,00 100,00
All figures x 1000
*
Costs considered for contingencies calculation
1DI1=1,B RS Estimated nu1ber of solutions: 2b00
Nu"bers rounded; they 1ight not add up exactly
WINDHOEK LOW~INCOME HOUSING PROGRAMME~INCEPTION REPORT~?
"!.OF TOTAL COSTS OF WLIHP
Projects and components
CONSULTANTS (6,2"1.)
NHE PEAS. COSTS ( 1 ,6"1.)
BLDG.MAT.LOANS (11,5"1.)
CTY.OVLPT.FUND (0,2"1.)
LN.GRNTEE FUND (33,8"1.)
UPGRADING (22,6"1.)
CORE-HOUSES (21,5"1.)
CONTINGENCIES (2,6'l.)
The following criteria have been used to impute the
different kind expenditures among the various sources of
funding:
KfW GRANT: Money from the KfW grant will be used to
pay for construction and contingency costs of
infrastructures, starter solutions, core houses and
community centers, to finance the building material loans
and the loan guarantee fund, the open end community fund
and consul tancy fees. As stated in Chapter 3, some of
these components will by subsidized. Costs have been
estimated at Sept.92 prices; details on calculations can
be found in chapter 3 and relevant annexes.
Note: It has been agreed that interest earned by KfW funds deposited
in Namibia will be applied by NHE to the financing of the Programme.
Till December 1/1992, the amount deposited by KfW in the Commercial
Bank of Namibia had produced Rs 186.253 in interests. Total amount
in the account was of Rs.3.913.931 at the same date.
NHE COUNTERPART CONTRIBUTION: NHE will finance the
purchase of land both for the upgrading project (already
disbursed) and the core house project. 340.000 m2 of
partially developed land were bought for the resettlement
of squatters at an average price or some 15m2. Cost of
this land is included in the Programme's budget on the
basis of the selling prices established by NHE: Rs. 4.600
for the 286 Goreangab plots (Rs.1.315.600) and Rs.5.160
for the 674 plots in Okuryangawa (Rs.3.477.840). Actual
amount paid to the Municipality is probably slightly
higher, but the total cost of the land is not yet
established as some issues affecting the price are still
under discussion. According to Municipal practices, the
amount includes costs of bulk services to the area plus
costs of planning, surveying and some land development.
Average price of block land to be purchased for the core-
house project is estimated at Rs.15/m2.
-70-
WINDHOEK LOW-INCOME HOUSING PROGRAMME-INCEPTION REPORT-7
As established in the financing agreement (paragraph
1.3), NHE will also have to assume the payment of the 11%
General Sales Tax in all Programme's purchases subject to
it. The following assumptions were made to estimate the
amount involved:
i) Regarding construction costs, GST is paid on the
purchase of building materials. As an average for
this kind of construction it was estimated that
building materials constitute 50% of the total
cost, and this percentage was used to calculate the
amount of GST.
ii) For the building material loans, it was assumed
that 90% of the funds would go for the purchase of
materials, and the remaining 10% would be used for
other purposes.
iii) For the purchase of equipment, the GST was
estimated over the total amount to be spent.
iv) When corresponding, the beneficiaries'
contribution (assumed to cover also the GST) was
deducted from the total amount prior to
calculation.
NHE will also assume as counterpart contribution the
costs of its personnel directly involved in the execution
of the Programme. An amount of Rs.550.000 was estimated
on the basis of the cost of 2 years of the Programme's
coordinator (a senior NHE's officer) plus part time work
of several other NHE's managers and employees.
BENEFICIARIES' CONTRIBUTION: To estimate the amount,
only direct contributions in cash or kind have been taken
into account. Although it is expected that once started
the Programme will mobilize many other resources, it
would not be possible to valuate them at this stage.
Direct contributions will be of three sorts:
i) Initial savings: 10% of the amount of the
selected housing solution;
ii) Sweat equity: For infrastructure extensions and
construction of community centers it is estimated
at Rs. 70.000. Value of self-help labour added to
loan amounts in starter solutions and building
material credits has been estimated at 15% of the
loans.
iii) Loan repayments: Amounts received by NHE as
repayment of loans are not included as an initial
source of finance but will constitute a source of
financement for future programmes addressed to low-
income target groups.
-71-
WINDHOEK LOW~INCOME HOUSING PROGRAMME~INCEPTION REPORT~?
PRIVATE SECTOR CONTRIBUTION: It has been estimated
assuming that in the first two years of execution the
participating financial institutions will adjudicate 400
guaranteed loans of and average amount of Rs.25.000.
Administration costs incurred will be be included in the
benefits produced by loan returns.
The combination of all the ressources that will be
mobilized by KfW' s grant with an innovative approach to
low-income housing is expected to permit the Programme to
assist over 2000 families in improving their present
housing situation.
7.2 Subsidies and loan conditions
The following costs will not be recovered and may be
considered as indirect subsidies:
i) Community centers
ii) Community development fund
iii)NHE personnel
iv) Consultancy costs
Rs. 750.000
Rs. 8 0. 00 0
Rs. 550.000
Rs. 1.190.130
Rs. 2.570.130
equivalent tO 7% of the total cost of the Programme. The
justification fo these subsidies is that the Programme
involves substantial institutional strengthening,
proposing the implementation of new instruments that will
permit NHE to reach lower income groups than it has done
till now.
The question of direct subsidies to the households
is not yet solved. A National Housing Policy goal is "to
phase out the current practice of subsidising loan
interest rates and applying the necessary subsidies in
the form of a one time, up-front subsidy for the
acquisition of serviced building plots".
Up-front subsidies were proposed for the original
Otjomuise Project. NHE and the Consultant strongly
support this policy goal as up-front subsidies, besides
being financially healthier for the Government in the
medium-term, tend to favor the lowest income groups.
However, at the time of preparation of this Inception
Report no decision regarding a shift from interest-rate
to up-front subsidies was taken. NHE will promote and try
to obtain from the Government a decision on this crucial
issue before the WLIHP implementation phase begins.
As this question affects the affordability of the
proposed solutions in the upgrading and core-house
Projects, the two possibilities will be analyzed. Loans
given by financial institutions participating in the Loan
-72-
WINDHOEK LOW~INCOME HOUSING PROGRAMME-INCEPTION REPORT-7
Guarantee Fund Project will be at market rates. The usual
term is 20 years. It is noted that market interest rates
have been recently (Nov I 9 2) reduced by 0, 5 to 1
percentage point. They stand now between 17,5 and 18%.
NHE has decided to adopt 15 years as maximum term of
loans granted within the Programme; longer terms increase
interest repayment without substantially reducing monthly
installments for a given capital. Building material loans
will be for shorter terms ( 6 months to 5 years) and at
market interest rates.
All beneficiaries will be required an initial saving
of 10% of the cost of their housing solution, either in
cash or as contract saving over a period of time to be
established.
7.3 Affordability and cost recovery
The Programme offers a wide range of options, the
possibility to each individual beneficiary to actively
participate in tailoring a housing solution according to
his/her situation and to further develop it at their own
pace. It is therefore expected that most families within
the selected target groups will be able to find a
solution they can afford.
Monthly repayment capacity of each household should
be assessed by the social workers while discussing its
particular request; loan contracts should not be
formalized before the 10% initial saving is integrated.
As a general rule, the financial burden arising from loan
repayment plus fees and monthly municipal charges should
not exceed 25% of the total household income. However, it
is estimated that this percentage could be too high for
households with monthly incomes below Rs. 1000/1100. The
following table indicates the percentages of total income
that households in different income brackets may be able
to afford, and the percentage of households in each
bracket for the different target groups investigated in
the socio-economic survey.
MTHLY. INC. SHARE OF INC. % OF HHLDS. % HHLDS AFFORDB.
IN RS. FOR HSG. RSTTL.AREAS NHE LIST INSTALT.
< 200 10,0% 13,0% < 20
201- 400 10,0% 21,6% 3,2% < 40
401- 600 10-12,5% 23,6% 2,0% 40- 75
601- 800 12,5-17,5% 17,8% 8,4% 75-140
8')1-1000 17,5-23,0% 11,5% 18,9% 140-230
1001-1200 23,0-25,0% 4,3% 15,8% 230-300
1201-1600 25,0% 3,4% 27,5% 300-400
> -1601 25,0% 4,8% 24,2% >-400
-73-
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NHE-KfW
WINDHOEK
HOUSING
LOW INCOME
PROGRAMME
AFFORDABILITY
OF PROPOSED HOUSING
SOLUTIONS
WITH UP-FRONT
SUBSIDIES
LEGEND:
PHS L R. 829 91pm ±SEPT. 92
A: PLOT ONLY: R. 5 000 00
B: PLOT AND FOUNDATIONS
FOR ONE ROOM: R. 5 100.00
C: PLOT AND ONE ROOM:
R. 8 00000
D: PLOT AND TWO ROOMS:
R. 9 000.00
E: PLOT AND ONE ROOM CORE:
R. 14 853 00
F: PLOT AND TWO ROOM CORE:
R 19 889.00
DEC.92
WINDHOEK LOW~INCOME HOUSING PROGRAMME-INCEPTION REPORT~?
The subsidy scheme finally adopted for the Programme
will obviously affect the kind of solution that these
amounts may pay for. Monthly repayments in the upgrading
and core-house projects ahve been calculated for both
possible subsidy situations based on the following
criteria:
UP- FRONT SUBSIDIES: For the upgrading project Rs.
2000 and for the core-house project Rs.1500 have been
applied as up-front subsidies for plot purchase, the
justification being that this subsidies will partially
finance costs of infrastructures included in the price of
the land. The balance of the loan will be repaid over 15
years wih a 17% interest rate. Monthly municipal and NHE
charges of Rs. 3 2 in the upgrading areas, Rs. 8 5 in the
core-house project and Rs. 115 in the loan guarantee fund
solutions are included in the calculations.
INTEREST-RATE SUBSIDIES: NHE's current policy
charges a 9% interest rate on loans up to Rs.13.000; and
gradually increases rates according to loan amounts: from
Rs.13/14.000-10%; Rs.14/15.000-10,5%; Rs.15/16.000-11%;
Rs.16/17.000-11,5%; Rs.17/18.000-12%; 18/19.000-12,5%;
Rs.19/20.000-13%; Rs.20/21.000-13,5%; Rs.21/22.000-14%;
22/30.000-14,5%; over 30.000-18%. The same amounts of
municipal and NHE charges has been considered.
The two tables in the next page explore what a
household can afford with the income available for
housing in the envisaged subsidy situations. The attached
charts attempt to visualize the whole affordability
analysis.
Loan recovery will be managed directly by NHE, who
has personnel, experience and adequate procedures to
handle the task. Existing site offices in Katutura and
Khomasdal and the future community centers may be used
for this purpose. Amounts recovered will be accounted for
separately and used for future low-income housing
programmes.
Despite all efforts to provide solutions to every
income level within the target groups, it is evident that
households in the resettlement areas earning less than
Rs. 2/300 per month will not be capable to repay even
for the plot and municipal services. No easy solution
exist for these cases short of outright giveaways. In the
implementation phase the social workers will evaluate
these situations. Alternatives like leasing rather than
selling the land may be explored. Some of them could be
assisted to organize themselves in saving groups and
envisage a slower rhythm of housing development.
-74-
AFFORDABILITY ANALYSIS WITH UP-FRONT SUBSIDIES
TYPE OF SOLUTION AVERAGE UP-FRONT 10/.INIT. LOAN MTHLY.REPYMUNICIPAL/ TOTAL MIN.REQD.
COST SUBSIDY SAVING AMOUNT 15 Y-171. OTHER CHGSMTHLY.REP.HH.INCOME
UPGRADING
A. Land purchase 5000 2000 500 2500 38,5 32 70,5 580
Land+strtr.solutn.
B. +foundations bOO 2000 bO 3040 46,8 32 78,8 b30
C. +toilet enclos. 750 2000 75 3175 48,9 32 80,9 650
D. +12m2 room 3000 2000 300 5200 80,0 32 112,0 750
E. +2 bsc.rooms 6000 2000 600 7900 121 '6 32 153,6 850
CORE-HOUSES
Cost of land 6.500,0
F. Land+l8m2 core 14.853,0 1.500,0 1.485,3 11.867,7 182,6 85 267,6 1.071
6. Land+29;2 core 19.889,0 1.500,0 1. 988,9 16.400,1 252,4 85 337,4 1.350
CONV.HOUSES!LGFl 20 Y-181.
H. Loan of 20000 XX 2000 18000 277' 7 115 392,7 I. 571
I. Loan of 25000 XX 2500 22500 347,2 115 462,2 1.849
J. Loan of 30000 XX 3000 27000 416,6 115 531,6 2.126
K. Loan of 35000 XX 3500 31500 486,0 115 601 ,o 2.404
Connection costs:
Electricity Rs.l200
Water Rs. 675
AFFORDABILITY ANALYSIS WITH INTEREST-RATE SUBSIDIES
TYPE OF SOLUTION AVERAGE 107.INIT. LOAN MTHLY.REPYMUNICIPAL/ TOTAL MIN.REQD.
COST SAVING AMOUNT 15 Y-97. OTHER CHGSMTHLY.REP.HH.INCOME
UPGRADING
A. Land purchase 5000 500 4500 45,6 32 77,6 620
land+starter solutn.
B. +foundations 600 60 5040 51, I 32 83, I 650
C. +toilet enclos. 750 75 5175 52,5 32 84,5 650
D. +12m2 roo11 3000 300 7200 73,0 32 105,0 700
E. + 2 bsc. fOOlS 6000 600 9900 100,4 32 132,4 780
CORE-HOUSES 15 Y-11 151.
Cost of land 6.500,0
F. land+18 12 core 14.853,0 1.485,3 13367,7 156,4 85 241,4 966
IS Y-147.
G. land+29a2 core 19.889,0 I. 988,9 17900, I 238,1 85 323, I 1.292
CONV.HOUSES!l6Fl 20 Y-187.
H. loan of 20000 2000 18000 277,7 liS 392,7 1.571
I. loan of 25000 2500 22500 347,2 115 462,2 1.849
J. loan of 30000 3000 27000 416,6 liS 531,6 2.126
K. loan of 35000 3500 31500 486,0 liS 601 ,o 2.404
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TOTAL MONTHLY
MONTHLY INCOMES RANDS
REPAYMENT: R.
REPAYMENT: R. 105.00
REPAYMENT: R 83.10
REPAYMENT: R. 77.60
NHE-KfW
WINDHOEK
HOUSING
LOW INCOME
PROGRAMME
AFFORDABILITY
OF PROPOSED HOUSING
SOLUTIONS
WITH INTEREST RATE
SUBSIDIES
LEGEND:
PHSL R. 82991pm SEPT. 92
A: PLOT ONLY: R. 5 000 00
B: PLOT AND FOUNDATIONS
FOR ONE ROOM: R. 5 600 00
C: PLOT AND ONE ROOM:
R. 8 000.00
D: PLOT AND TWO ROOMS:
R. II 000.00
E: PLOT AND ONE ROOM CORE:
R. 14 853 00
F: PLOT AND TWO ROOM CORE:
R. 19 889.00
DEC.92
QUARTERLY DISBURSEMENT SCHEDULE FOR KfW FUNDS IAll figures DM x 10001
DISBURSEMENTS DH/ 1992 """""""""""""""""" 1993 """"""""""""""" . ..".".."...".... . 1994 ....."."."......
COMPONENTS lst.Dtr, 2nd.Otr. 3rd.Dtr. 4th.IHr. 5th.Dtr. 6th.Dtr. 7th.Otr. 8th.Otr. TOTALS
UP6RADIN6 RSTLT.AREAS
land & basic infrastr. 1.066, 7 1.066, 7
lnfrastr.extension 30,5 250,0 150,0 430,5
Starter solutions 39,6 200,0 300,0 150,0 50 739,6
Cottunity centers 120,5 8o,o 20,0 220,5
CORE-HOUSES
land developtent 89,2 170,0 170,0 100,0 529,2
Core-house construct. 350,0 700,0 700,0 350,0 73,5 2.173,5
Coaaunity centers 40,0 33,5 40,0 33,5 147,0
CONTINGENCIES 400,0 77 ,o 477 ,o
LOAN GUARANTEE FUND 1.000,0 1.000,0
BLDS.MATERIAL LOANS 276,8 8oo,o 500,0 1.576,8
CTV. DEVELOPMENT FUND 15,0 15,0 10,0 40,0
CONSULTANTS
Inception phase 288,8 288,8
lmpleaentation phase 200,0 100,0 100,0 100,0 100,0 100,0 100,0 110,5 910,5
TOTALS 288,8 2.472,3 1.346,0 1.495,0 I. 953,5 1.050,0 783,9 100,0 110,5 9.600,0
7.4 DISBURSEMENT SCHEDULE
WINDHOEK LOW-INCOME HOUSING PROGRAMME-INCEPTION REPORT-7
7.5 Programme's cash-flow
Two versions have been prepared, one for each
possible subsidy scheme. The main difference lies in loan
recovery. The following assumptions were made:
INTEREST AND UPFRONT SUBSIDY
For the interest-rate subsidy system, repayment was
calculated as follows:
Repayment period of 15 years for core houses and
starter shelters, 3 years average for building
material loans.
Interest rates of 9% for starter shelters and 11,5%
or 14% (depending on amount of loan) for core
houses.
For the up-front subsidy system, repayments were
calculated as follows:
Repayment period of 15 years for core houses and
starter shelters, 3 years average for building
material loans.
Interest rate: 17%
VOLUME OF EACH SHELTER TYPE:
Starter Shelters: 960 split as
Up front Interest
Subsidy
600 X Dm 1680 Dm 2800
360 X Dm 2800 Dm 3640
Core Houses
Up front Interest
Subsidy
200 X Dm 8330 Dm 9170
200 X Dm 11350 Dm 12200
AMOUNT OF UP-FRONT SUBSIDY
Starter Shelters
Core Houses
REPAYMENT PERCENTAGE
Dm 1120
Dm 840
follows:
The payment percentage was estimated at 90% in both
situations.
-79-
WINDHOEK LOW-INCOME HOUSING PROGRAMME-INCEPTION REPORT-7
SAVINGS
It was assumed that the savings required in the
budget would be achieved.
LOAN TAKE UP
A gradual take up and completion of the core houses
was used with a completion date of the first houses in
the fourth quarter of 1993. The starter shelters would
begin repayment in the second quarter of 1993 and the
material loans repayment starting in the third quarter of
1993.
LOAN GUARANTEE FUND
Since the loan guarantee fund operates with the
private sector the cash flow Is shown separately. The
following assumption on volumes and loan amounts was
used:
Year Loan Amount Units per Quarter
1993 Dm 14 ooo 50
1994 Dm 14 000 50
1995 Dm 16 800 70
1996 Dm 16 800 80
1997 Dm 19 600 90
The claims experience would start with claims of Dm
10 000 per quarter and increase to Dm 18 000 per quarter
increasing to Dm 10 000 per quarter by 1997.
The percentage cover on loans by the loan guarantee
funds would decrease to 7% at the end of 1997. Therefore
one could expect that the fund could not repay the amount
to NHE for re-investment into housing loans.
7.6 Financial control
Separate account will be kept by NHE of all
Programme's funds; quarterly reports, controlled by the
Consultant will be submitted to KfW along with the
Progress Reports.
Disbursement of KfW funds will be governed by the
"Guidelines for the Disbursement of Funds of German
Financial Cooperation with Developing Countries by
Kreditanstalt fur Wiederausbau". They will be approved by
the Consultant's Chief Technical Advisor.
If an urgent need for funds arises during a period
when the CTA is not present in Windhoek, NHE will advance
the funds till the CTA's next visit.
-80-
CUARfERLY CASH FLOW SfAfEHENf FOR KFW WINDHOEK LOW INCOME HOUSING PROJECT
Clnt~r&st Rat~ Subsidy)
fij~~6~~~f--------------------~---I~~~------------i~~§-----------------r-------------------I~~~-------------------i~§~---------------~---------i~§~---------------r---------i~~~---------------:-----------
2 ~· _, "1 : 3 "1 : 2 "1 : "1 : .-, .::. 2 3
------------------------------------------------------------------------------------·------------------------------------------------------------------------------------------------------------------------A. 1 E:-:p,.ndi t.uro;o t~FW FUtmS ; : ; : : : :
1. F-:.;.s.;.tUo?Ho?nt
Land R Infrastruct
Infr·astr·JJ":t ~xl9ntior1
Star·t~r· 3C"ltJtiOtl
Co~Hur,ity 1:Qr1tr~s
2. Cor-.;. Hous.;.s
L~r1d O~v~lop~~r1·t
l:")r-~ h")IJS~ C1)r1struct
CoMMUrl~ty CQtltr~s
3. Corlting~r,ci~s
"1. Loan Guaranta~ Fund
5. Building Hatarial Loans
6, CTY. o~~ Fund
7, Consultants
I nc.;op+_i r:"n
I "plo;.H~nt.~t.i on
28'3
"10
121
1,001)
15
200
251)
200
80
~i50
277
100
150
300
20
170
700
'10
15
100
150
170
700
3"1
800
100
50
100
350
"10
"100
10
100
77
500
100 100 111
1, Ot·i'
"131
7"'10
221
523
2, 17"1
Hi'
-177
1,000
1, 577
"10
0
28'3
'311
§:-f;i~r-;~i-ir;~-~~~-~Q~5~-- ----~§~---~:~~~---I;~~~---i:~~§---i:~~~- --i;o§o-----~~~-----i6o _____ jii- _____ 6 ______ 6 ______ 6 ______ 6_· _____ 6 ______ 6 ______ 6 ______ 6 ______ 6 ______ 6 ______ 6 ______ 6_: ____ §:~66-
A.2 Exp~ndit.uro? NHE FUNDS
1. F-:~so;ot t_l o?H~nt
Land R Infrast.ruct
Infrast.ruct. o;oxtant.ion
Star·t~r solution
CoHHUr)ity Centr~s
2. Co..-.:- H~:n.Js~-~==-
Land and infrastruct
Land Do?vo?lopHant.
Core housQ construct
CoH~unit4 c~t)trQs
3. Conti~g9nci~s
"1. Building Heto;orial Loans
5. Car111uniiy Dev Fund
G. P~rsonn9i Costs
7·%
A.3 Expanditur8 of Individua:s Funds
1. Sa vi r .. ~s
2
2
2
G8
278
7
5
20
30
2E.7
17
" _,
10
"11
2
2
232
'3
10
"11
2
8:3
3"1
"108
~· _,
20
2
23
1
3"1
77
2
55
(I
":"..,
.J I
(I 0 0 0 0 0 I) 0 0 I) 0 (I 0
o
0
0
1,3'1"1
"'13
12
0
7%
::; 1
12F..
9
28
173
"1
308
0
0 :
1,.,28 :
r~i~i-Appii~~ii;~-~;-~~~d;---:--2;37~---2:e2~---i:73E. ___ i:e~~---2:s15-:--1:2i~---I:o~8-----i3~-----I~s-: _____ 6 ______ 6 _______ o ______ o_: _____ o ______ 6 ______ o ______ o ______ o ______ o ______ o ______ o_: ___ i3;s~~-
o
E:. IHCOHE 0 :
1. Savinqs
1. 1 Llp·~rading
1. 2 Cot· a Ho"Jsas
1.3 Material Loans
2. R~payr1ant Cr8dits
2.1 Starter Solutions
2.2 Hatarial Loans
2 .. 3 Cor.;, H")U:sos
3. KF~ Disburser1ents
"1. NHE Disburser1.;.nt
5. Intarest. Earned on
Inv~stM.:ont
F.,, Tot.~l It·,flo)~
(278)
0 0
0 0
0 0
(28'3) (2. "172)
(2. 090) (73)
(87)
(117)
(E.5)
(85)
(f.)
0
0
(10"1)
(128)
0
(9)
(10)
0
Cl, 3"'16) (1, "195)
(123) (119)
(33):
(128):
(2"17):
(12):
( 10):
C12)!
(1,951):
(183):
( 11)
(E,F_.)
0
(lEo)
C3EO
(12)
(1,050)
('31))
(11)
(15'1)
(19)
c:;8)
(2"1)
C78'1)
(9'3)
(2, "lE.S) C2, 82"1) C 1, 7"'13) C 1, 8F..F..) C2, 579) : C 1, 283) ( 1, 12'3) . '
I)
(22)
(55)
(2"1)
(100)
(3"1)
C23E.)
0
(25)!
(56)!
C3b)!
(111):
(37):
(28)
C5E.)
C3E.)
0
0
(31)
(51;)
("18)
0
0
(31)
(SE,)
("18)
0
0
(31):
(5E.):
C-'18):
0
0
(31)
CSF.,)
("18)
0
0
C3D
(56)
(-==18)
0
0
(31)
(%)
("18)
0
0
(31):
("'F..):
("18)!
0
0
C2E.5) : < 120) ( 135) < 135) C 135) : C 135) ( 135) ( 126) C 12E.):
(31)
(18)
('18)
(I
0
(97)
(31) ---(31)
(18)
('18) ("18)
0 0
0 0
(97)
(31)-!-
C"l:D:
0
(I
0 :
(5"13):
(399):
("186):
0 :
("181):
(E.E.8):
(E,7'3):
('3. 600) :
C2,8"1'D:
(87)!
(80) : ( 15. 732) :
c:-~~t-c;;h-~i~~-------------·----ce75 ______ o ______ c65 ____ ci~5----c3~5;----ce.e.5----cei5 ___ cio25 ___ c1I~5:--ci2o5--ci3s5--ci355--ci3s5:--(i355--ci3s5~-ci2E.5--ci265: ___ <~~5---c9~5---cao5 ___ cao5: ___ ci;3I~5:
=============================:========================================!================================:============================:============================:============================:==========:
0:-c~~~-G~~~~~t~~-F~~d-------:---------------------------------------- --------------------------------:---------------------------- ----------------------------:----------------------------:----------
1. In"ta::.lHo?n+. 1,000 1,028 1,05? 1,0'35 1,133 1,173 1,213 1,252 1,292 1,~;33 1,::;75 1,"116 1,158 1,"1% 1,535 1,573 1,E.ll 1,F.."l5 1,678 1,712 27,076
2. Intar"st Earned 28 28 28 28 25 25 25 25 23 23 23 23 23 23 23 23 23 23 23 23 "193
3. Clair1s 0 0 10 10 15 15 15 15 18 18 18 18 15 15 15 15 10 10 10 10 252
"1. Ho?+. Valua of F"Jnd 1,028 1,05? 1,095 1,133 1,173 1,213 1,252 1,292 1,333 1,375 1,"116 1,"158 1,"1'3E. 1,535 1,573 1,Gll 1,E."'5 1,E.7i3 1,712 1,7"15 27,1322
5. Invo?~lH~nt Created 0 700 700 700 700 700 700 700 1,17E. 1,17E. 1,17E.i 1,176 1,31<1 1,311 1,31"1 1,3"1"1 1,76"1 1,7E."' 1,7E."' 1,761 22,03E.
(Private Sector)
E.. Total Loan~ Priv Sector
0
DYe to lo~ % cover given no
0 700
2
1,100
1
2,100
1
2,900
0
3,500
(I
"1,200
I)
-1,900
0
6,07E.
0
7,252
0
8,"128
0
'3,E.O"' : 10,'3"18 12,292 13,E.3F.. 1"1,980 : 1&,71"1 18,508 20,272 22,036
0 0 0 0 0 0 0 0 0
flo~ back in first five years:
==========================================================================================================================================================================================================
QUARTERLY CASH FLO~ STATEMENT FOP KF4 ~INOHOEK LO~ INCOHE HOUSING PROJECT
(AssuMption ~Upfronl Subsidy)
2 3 -1 : ., : 1 2 ., : 2 '1 : 1 "i : T colal
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------1'1. 1 E:-:po;.ndi +.un;. t::F~ FIJtlDS : : : : : : :
1. F:o:;oso;.t. +.1 o?Mo?nt.
Land & Infrast.ruct
Infrastruct. o;.xto;.nt.ion
Starto;.r solution
COHHUnity C~tllr~s
2. Cor·.;. Hous~:.::
Land Oo;.vo;.lopMo?nt
t:("r~ h·~USQ cor,slruct
(:("HHUtlil'~ cgr1tr·es
~i. Cor1tinq~t1ciQS
~. l.oar, 131~at·anl~~ Fund
~i. Buil3i-~g Halerial Loans
S. CTY. Do;.~ Fund
7. Consul t_,::Jnt::.
I nc~ .. p+.i c"n
I Mpl <;oMo?ntat.i o)n
A.2 E~po;.ndituro;. HHE FUNDS
1. Ro:;oso;.t t.l <?Mo;.nt.
Land G Infrastruct.
Infraslruct. o;.xt.o;;ontion
st~rl~r solution
CoHHunit.~ Co:;onlr~s
2. Cor~? ~lou:s~?s
Land and infrast.ruct.
Land D&v8lOpM8nt.
Cor~ hous~ construct
Co~Hunily centres
3. Conlingo;.ncio;;os
"1. Building Hato;;orial Loans
s. CoMMUnity o~v Fund
6. P~rsonn~l Costs
1,3'1-1
A.3 Expendituro:;o of Individuals :unds
1. Savin9:::
E:. I HCOHE
1. s.:l'/ings
1. 1 llp9...-adi ng
1 .. 2 Cor.;. HoiJSI?:S
1.3 Building Mato;;orial loans
2. Ro:;opayMo;;ont. ~r~dits
2.1 siart.o;;or Solutions
2.2 Hat~rial Loans
2.3 Cor~ Housa:as
3. t::F~ Disburso;;oHo;.nls
"'i. HHE Oisburs~Ho;;ont
5. Int.o;;oro;.st. Earno;;od on
I nvo;;os+.Ho;.nt
0
0
0
(28'3)
(2 ,0'30)
(87)
1, OEo 7
31
"'iO
121
1, 000
15
200
2
2
2
E-8
278
(278)
0
0
0
(2,"'172)
(73)
250
200
80
8':t
350
277
100
15
12
7
5
20
30
2&7
(117)
CG5)
(85)
(b)
0
0
<1,3%)
(123)
150
300
20
170
700
"'iO
15
100
'3
17
2
232
(10"1)
C12E:)
0
(1(1)
(11)
0
( 1' "'1'35)
ClEO
151)
170
700
~H
E:OO
100
03
10
-11
··o
0::.
-10:::
C::i:3) :
(128):
(247):
(13):
(11);
(1"1):
(1,'35"1):
(183):
50
100
350
'10
"100
10
100
3
E.
20
2
23
1
3-'i
77
(11)
(Eo b)
0
(lE,)
("13)
Cl"'i)
(1' 050)
C'30)
500
100
<I
2 .,
55
1E.5
(11)
(15"1)
(1'3)
("'i3)
(27)
(78-'i)
('3'3)
100
0
0
(23)
CG2)
(27)
(100)
o·n
111
37
0
0
(2Eo):
CG2):
C"'lD:
(111):
C37):
I)
(2'3)
CE-2)
(-11)
(I
(I
(I
(32)
(Eo2)
(55)
0
(I
(I
(32)
(b2)
. (55)
(I
(I
(I
(32):
(E,2):
(55):
0
0
0
(32)
CE.2)
(55)
0
0
0
(32)
CE-2)
(55)
0
0
0
(32)
(51)
(55)
0
0
0
C32):
(51):
(55):
0
0
0 0 0
0
(32)
(21))
(55)
(I
(I
I)
C32)
(20)
(55)
(I
0
(I
(32)
(55) . a·--
o
0
(:32):
(55):
0
0
1,057
"131
7'10
221
0
52'3
2,17-1
1'17
'177
1,000
1,577
0
2:?.'3
0
(I
I)
1,3'1-1
25
'13
12
0
7~E.
31
12Eo .,
173 .,
31)g
I)
0 :
1!1-128 :
(I
0 :
0 :
(5"'13):
(30303):
("'i8Eo):
0 :
(500):
(7"'1°3) :
GE.-1);
C'3, GOO) :
(2, 84'3) :
(87):
0 :
E.~-r~t~1-r;.rr~~-----------------:-cz:~&55-cz:az~5-<1:7135-<1:aE.75-<z:ssz5:-ci:z3o5-<I:13s5 ___ c21&5 ___ c2775:--ci335--ci135--<1~95--ci195: ___ <1~95 ___ c1195 ___ ci3a5 ___ ci3a5: ___ <1o75 ___ cio75 ____ <a75 ____ <875:-c1s:9775:
' 0
c~-H~t-c~;h-Fi~~----------------o ____ ca7) ______ o ______ cE.5 ____ c215 ____ c385;----c735 ____ ce95 ___ ci125 ___ ci295:--ci335--c1~95--ci195--c1~95: ___ ci135 ___ <1~35 ___ ci385 ___ ci3a5: ___ cio75 ___ cio75 ____ ca75 ____ <875:--<2:1oo5:
================================:========================================:================================:============================:================================:================================:=========: 0 0 0
0~-L~~~-G~~~~~t;~-F~~d----------·----------------------------------------·--------------------------------:---------------------------- --------------------------------:--------------------------------:---------
1. I nvo;.:=d.Ho?n+.
2. Into?ro;.sl Earn,..d
~;. Cl-aiMs
"io H~t Value of Fund
5. InvestMo;;ont. Cre~to;;od
(Pri Vo!!+.o;;o S ... ct.or)
E.. Tot~l Lo~ns Priv S9ct.or
V~lu,;o of fund/lo~ns Grant~d X
OuQ to lo~ X COVQr giv9n
1,000
28
0
1,028
0
0
1,028
28
0
1,057
700
700
2
1,05?
28
10
1, 0°35
70(1
1,"'100
1
1, 0°35
28
10
1~133
700
2,100
1
na:r flo~ back in first fi VG' y.;..:.r·s: : '
1,133
25
15
1,173
700
2,800
(I
1,173
25
15
1,213
700
3,500
0
1,213
25
15
1,252
700
<1,200
0
1,252
25
15
1,2'32
700
"1,'300
0
1 '2°32
18
1,333
1,17Eo
G. 07Eo
(I
1, 33~;
23
18
1,375
1,176
?,252
(I
1,375
18
1,., 16
1' 17Eo
8,"'128
0
1,-'ilE.
18
1,"158
1,17&
'3,E.O<I
0
1,"158
2~i
15
1>'l'3Eo
1 '~i"l"'i
1,"1%
23
15
1,535
1,3-'i"'i
12,2'32
0
1,535
23
15
1,573
1,3-'i"l
13,Eo3G
0
1,573
23
15
1,Eo11
1, 3-'i"'i
1<1,'380
.0
1,&11
23
10
· 1,G"'i5
1,7Eo<l
1G, 7"l"'i
0
1,Eo"'i5
23
10
1,E.78
1,7Eo<l
18,508
0
1,G78
23
10
1' 712
1,7&"'1
20,272
0
1' 712
23
10
1,7"'15
1,7E."l
22,03&
0
27,07Eo
"'1'33
252
27,822
22,03E.
===~=~=====================================================~========================================================================================================================================================
WINDHOEK LOW-INCOME HOUSING PROGRAMME =INCEPTION REPORT=8
~ Effects, assumptions and risks
8.1 Social effects
The Programme will produce strong social effects, on
the levels of the individual household, the settlement
communities and the urban society of Windhoek.
By the end of implementation after two years, at
least 1,200 families will have obtained house ownership
and improved significantly their housing situation
compared to what they had at the beginning. Thus the
Programme will provide a strong push to family
consolidation. Self-reliance will be stimulated, as the
individual household will bear full responsibility over
its housing process.
In many cases, especially in the resettlement areas,
overcrowding will be alleviated; more privacy will allow
for more peace among the members of the household and
between neighbors. A better housing quality and access to
better services will reduce illness of adults and
children and the work load of women. Women and children
who are normally more affected by poor housing conditions
than adult males will, in particular, benefit from the
Programme.
Some stress during construction and moving to the
new plot is unavoidable, as the beneficiaries themselves
will have the main management responsibility. In the
resettlement areas they also will suffer from dust and
noise during construction. As the construction process
absorbs more than what they usually spend on housing,
they may even face temporary difficulties in meeting
their other basic needs like food, transportation,
participation in social life and entertainment. However,
considering the lasting positive effects, these temporary
inconveniences may be tolerated.
The Programme will definitely have a strong impact
on community life. As a matter of fact, community bonds
that rarely exist today will be defined and developed
during implementation. They hopefully will translate into
legitimate leadership, internal information and decision
making mechanisms and a growing capacity to negotiate
with public institutions and private organizations.
Well organized communities will advance more under
the Programme than less organized ones. To what extent
infrastructure and services will be improved and
community facilities constructed, will depend on the
commitment of the different communities, their
contributions, management and maintenance capacity.
Obviously the Programme cannot enforce involvement, but
it will certainly reward those who actively participate.
-83-
WINDHOEK LOW-INCOME HOUSING PROGRAMME -INCEPTION REPORT-S
Although the Programme does not aim at the creation
of permanent employment, except for those associated with
the implementation team, the amount of required
construction jobs will at least temporarily help relieve
the pressure on the labour market, both in the formal and
informal sectors.
Here, employment generation may be quantified If
all construction activities were perfectly distributed
during implementation and with an estimated share of
self-help construction of 25 %, it is estimated that the
Programme would provide direct employment for
approximately 4 75 construction workers over a two year
period, as well as provide indirect benefits for the
suppliers of building materials.
This assumption has been based upon project
construction costs of R 22,9 million, of which 40% - viz
R 9,16 m, is the cost of labour, and an average monthly
construction worker's wage of R 650.00. This calculates
out at 14,092 wage months. An amount of 10,500 man-months
is created if an allowance of 25% is made for self-help.
The above assumed calculation results in the creation of
employment opportunities for approximately 475 workers.
The Programme allows a more intensive use of urban
land, through provisions for densification in the
resettlement areas and in the case of the core house
project(s) by introducing a residential use on land
unused so far. The growth effect for the urban economy is
evident: the Programme will increase consumption of
municipal services and the number of payers of municipal
charges.
As the German financial contribution is a grant, for
NHE the Programme is a lucrative investment. It will pay
back not only in the borrowers' instalments over years,
but also in terms of institutional experience and
improved image. The prerequisite is that the Programme is
carried out by well qualified and highly experienced
personnel.
8.3 Environmental effects
Through the improvement of infrastructure and
services, such as sewer lines, public toilets and refuse
collection, and by supporting community control over land
use, the Programme will improve the environmental quality
of the resettlement areas. Within the community
development support component, environmental upgrading
such as tree planting and the use of waste water for
garden cultivation, will be encouraged.
The construction advisors will inform the builders
on environmental aspects of construction, e.g. the
-85-
WINDHOEK LOW-INCOME HOUSING PROGRAMME ~INCEPTION REPORT-S
importance of cross ventilation, dust prevention measures
and thermal properties of building materials. The
Programme will strictly ensure that asbestos cement
products are not used, either in the resettlement areas
or in the core house projects; the application of this
rule will not be difficult, as asbestos cement products
are generally not used in low-income houses in Windhoek.
The reduction of standards and costs to make housing
solutions affordable will necessarily lead to
environmental compromises, as in the case of road
surfaces. Tarred roads would increase infrastructure
costs prohibitively; gravel roads are much cheaper but
less comfortable, especially because of dust. Even if
roads were tarred, dust would still be stirred because
the scarce natural vegetation only binds a little of the
ground surface.
Another example is the elimination of waste water;
it cannot be guaranteed that all beneficiary households
will be connected to the main sewerage disposal system
and waste water thus be treated at Gammams Sewerage
Works, one of the most advanced treatment plants in
developing countries. Aqua privies provide an acceptable
alternative, due to the logistical difficulties of
connecting the resettlement area (Greenwell Matongo in
particular) to the Gammams Sewerage Works, which also
currently does not have the capacity to accommodate an
increased inflow. For a description of the functioning of
aqua privies, see Annex 5\\A
Land consumption, as envisaged with the core house
projects and encouraged with the loan guarantee fund, may
be considered ecologically negative. However, in order to
minimize virgin land consumption the Programme will
promote densification, not only in the resettlement
areas, but also in the core house project(s) by reducing
plot sizes significantly in comparison to conventional
land development, and by stimulating subdivision of large
plots and the construction of an aciditional house with
private sector loans.
According to the information of the Municipality of
Windhoek, the increased need of water will be entirely
covered by existing sources and networks of distribution.
The Municipality has offered personnel to instruct
communities about how to use water economically, not only
because of the drought the country is currently
suffering, but also as water is rather expensive and
payment effectively enforced.
8.4 Institutional and political effects
NHE will have to carry the implementation burden of
the Programme, partially relieved by the Consultant's
-86-
WINDHOEK LOW-INCOME HOUSING PROGRAMME -INCEPTION REPORT-S
support. NHE will gain valuable experience with various
innovations, like the building material loan scheme,
community development support, alternative development of
land and the loan guarantee fund. The Programme will
allow NHE to effectively address the housing needs of
post-independence and translate reorganization into
projects and housing solutions.
The Programme is one of the first large-scale
efforts to implement the National Housing Policy. It will
provide an example that illustrates that it is possible
to address the housing needs of more people, with less
capital requirements and subsidies per housing solution.
It will be a political success for the MLGH, eager to
reach as many families as possible, in that the number of
beneficiaries will, at least, have doubled in relation to
the original Otjomuise proposal of 600 core houses, and
that important private resources will have been mobilized
by beneficiaries and financial institutions.
The Programme is designed to produce sustainable and
replicable results. The sustainability of the building
materials loan scheme will result in good repayment
performance, applications for follow-up as well as new
loans in the Programme areas, by people who could not
afford loans earlier. The core house project(s) will be
sustainable when house owners take the initiative to
improve and extend their houses, the loan guarantee fund
when losses will be at least partially covered by
beneficiaries' premium. Once sustainability is proved,
the National Housing Policy will have a vested interest
in replicating the experience in other locations.
One of the most relevant political effects will be
created by the principle of participation and consensus
building that is underlying the Programme. As the
Programme was prepared with the active participation of
the MLGH, Municipality, NGOs, community representatives
and the private sector, a Steering Committee formed by
representatives of the different actors in the housing
process will follow up implementation. The political
message is that housing is not the responsibility of one
institution, but the result of coordinated action between
different actors, whose interests have to be carefully
balanced out.
The Programme will not only provide a forum for
exercising the rules of democracy at an institutional
level. Even more important is that participation in
decision making is facilitated in the communities. With
Programme support the communities will develop
accountable organizations with legitimate leaders to
articulate their needs and take action. Accountable
community organizations will be much more effective in
-87-
WINDHOEK LOW-INCOME HOUSING PROGRAMME -INCEPTION REPORT-S
exercising pressure on defaulters
institutions or a parastatal, like NHE.
than public
A certain demonstration effect on donors may be
produced by the Programme. If the ambitious objectives
and expected results of the Programme are really achieved
according to the implementation schedule, not only
Germany but also other donors will win confidence and be
readier to invest in the future of the country.
8.5 Assumptions and risks
Assumptions, that are beyond the direct control of
Programme management, are necessary conditions of
Programme success, but may seriously affect the
achievement of objectives and expected results. Most of
the following general assumptions have been formulated
during the participatory planning workshop:
The economic situation in Namibia will not seriously
deteriorate.
Inflation will not increase dramatically.
Borrowers will not suffer a substantial decrease of
their real income which would affect their ability to
repay the loans.
The supply of building materials will not experience
shortages, due to excessive demand by other big projects
or supply limitations in South Africa.
Peace and democracy will remain and no political
complications to community participation arise.
The Government will not tak·e any action that may
jeopardize the implementation of the Programme, e.g.
announcements of writing off housing debts.
Coherent financial and cost recovery criteria will
be applied for all low-income housing programmes and
projects in Namibia.
The Municipality of Windhoek will accept lower
service levels.
Community leaders will not interfere politically in
a way which would adversely affect the acceptance of the
Programme.
Community development will keep pace with the
evolution of the Programme so that no major delays occur.
There will be no massive payment boycotts.
The core house projects cannot be initiated unless
the Municipality makes affordably priced land, which is
acceptably located, available. Construction can only be
started soon, if the Municipality short circuits the
usual approval procedure.
With reference to the success of the loan guarantee
fund the following assumption has been made:
The private sector financial institutions will
accept the loan guarantee fund and approve the respective
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WINDHOEK LOW-INCOME HOUSING PROGRAMME -INCEPTION REPORT-S
changes in their lending policies towards low-income
groups.
The major risks of the Programme can be summarized
as follows:
Economic depression or significant increase of
inflation will affect the target group's capacity to pay
back loans.
Institutions will
Other programmes
affordability and cost
Community leaders
Programme.
not coordinate efficiently.
operate with lax criteria of
recovery.
introduce party politics into the
Private sector will remain reluctant in providing
housing loans to low-income families.
The Programme management will permanently monitor
assumptions and risks and develop appropriate
counteraction if the achievement of objectives and
expected results is in danger.
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WINDHOEK LOW-INCOME HOUSING PROGRAMME INCEPTION REPORT
TABLE OF CONTENTS
covering letter
Summary
1. Introduction
2. Problem analysis
2.1 Central problem
2.2 Increasing housing problems
A. Problems identified in the workshop
B. Comments
2.3 Land development policies
A. Problems identified in the workshop
B. Comments
2.4 High costs
A. Problems identified in the workshop
B. Comments
2.5 Inappropriate solutions
A. Problems identified in the workshop
B. Comments
2.6 Low incomes
A. Problems identified in the workshop
B. Comments
2.7 Institutional problems
A. Problems identified in the workshop
B. Comments
2.8 Non-participation of private sector
A. Problems identified in the workshop
B. Comments
3. Target population
3.1 NHE Priorities
3.2 The socio-economic survey
A. Demographic characteristics
B. Migration and urban-rural linkages
c. Aspirations and priorities
D. Employment
E. Income and expenditures
F. savings
G. Affordability
H. Present housing conditions
I. Community organization and participation
J. Self-help potential
4. Objectives, concept and justification of the
Programme
4.1 Objectives
4.2 Programme outline
A. Basic hypothesis
B. Sub-projects and supporting components
C. Participation concept
D. Appropriate solutions
E. Affordability and subsidies
WINDHOEK LOW-INCOME HOUSING PROGRAMME
F. Replicability and cost recovery
G. Financing
H. Selection of beneficiaries
I. Institutional development
4.3 Justification
INCEPTION REPORT
4.4 Other related low-income housing projects
A. Some recent NHE's projects
B. Cooperation with the People's Republic of China
C. The Ombili Project
D. The Build Together Programme
E. Conclusion
s. Sub-projects and components
5.1 The upgrading Project
A. Specific target group
B. Background
C. General description of project
D. Activities
E. Components and costs
F. Selection of beneficiaries
5.2 The core-house Project
A. Specific target group
B. Background
C. General description of project
D. Activities
E. Components and costs
F. Selection of beneficiaries
5.3 The Loan-Guarantee Fund Project
A. Specific target group
B. Background
C. General description of project
D. Activities
E. Components and costs
F. Selection of beneficiaries
5.4 The Building Materials Revolving Fund
A. Target groups
B. Owner-builder improvement process in Katutura
c. Operation of the scheme
- Purpose
- Type of loans
- Procedures
- Repayment
- Personnel requirements
D. Activities
E. Costs
5.5 Community Development
6. Implementation
6.1 Executing agency
A. Legal base
B. organization and management
c. Financial status
D. Relation to target groups
E. Implementation capacity
WINDHOEK LOW-INCOME HOUSING PROGRAMME INCEPTION REPORT
6.2 Programme's organization and management
A. Steering Committee
B. Special Task Group
c. Management of the Loan Guarantee Fund
D. Consultant's assistance
6.3 Other participating agencies
6.4 Implementation schedule
6.5 Monitoring and evaluation
6.6 Contracting and procurement
6.7 Operation and maintenance
7. Costs, financing and related matters
7.1 Costs and sources of financing
7.2 Subsidies and loan conditions
7.3 Affordability and cost recovery
7.4 Disbursement schedule for KfW funds
7.5 Programme's cash flow
7.6 Financial control
a. Effects, assumptions and risks
8.1 Social effects
8.2 Economic effects
8.3 Environmental effects
8.4 Institutional and political effects
8.5 Assumptions and risks
ANNEXURES
1/A Participatory planning workshop results
2/A Comments on costs included in NHE loans
fB Comments on the implementation of the National
Housing Policy
3/A The socio-economic survey
/B Case studies-life histories
4/A Housing survey
/B Cost comparison of three housing processes
fC Alternative construction technologies
5/A Level of services in resettlement areas
/B Information campaign and video outline
/C Cost of upgrading services in resettlement areas
/D Loan Guarantee Fund proposal
/E Letter from SWABOU
fF Job descriptions for cty.& technical assts.
/G Report on establishment and functions of committees
in resettlement areas