This is how undeveloped land, buildings shape smart city development in Africa

Most of the development land in cities throughout the world is controlled by the state. States often work in silos and it is often up to communities and real estate professionals to convince the regulators to release that land.

But in the world where real estate is often treated as a commodity, urban communities and the few welfare states that Africa has should get creative and convince property investors that buildings create a sense of place, not just monetary dividends.

So it’s most of the times down to solid multi-actor partnerships if smart cities were to develop across Africa. And don’t forget about the farmers as they lose agricultural land due to urban growth but may stand to earn a lot more if urbanization is done right.

Africa is the world’s second-largest and second-most populous continent with the surface of 30.2 million sq km (20.4% of the total global land area).

Sub-Saharan Africa has a slum population of 199.5 million

When it comes to land use in emerging urban environments, Africa requires around 4 million housing units per year, with over 60% of the demand required to accommodate urban residents. Rwanda’ s demand for housing (especially affordable) is estimated to be at least 560,000 units by 2020. In Nigeria it’s 17 million by the same year. Reputed for being the best run local authority in Zimbabwe, Bulawayo, home to some 650,000 people in the south of that country, now has 100,000 residents on the waiting list for housing stands.

Mauritius, the most densely populated country on the continent with 639 people per sq km should definitely be mindful of its land policies and building codes. But how innovative should city authorities and local communities be in the island nation compared to — let’s say — Namibia, the least densely populated one, with three people per sq km? Mauritius could certainly learn from Singapore whose city planners are not only aware of the Asian country’s limitations — especially space — but also faced a housing crisis after the city-state’s independence in 1965.

It is generally believed that going more vertical in densifying urban environments is closer to getting your city to become resilient and sustainable. Urban planners are aware of the fact that local communities do not react similarly to urban high-rise. In Asia high-rise is regarded as a premium category but in places like Europe it is treated  as low quality housing.

Affordable housing and role of residents’ aspirations in urban design

Developers believe they can get 20%+ returns on housing projects in Africa 

At the same time they cite high borrowing costs for property developers as well as low levels of infrastructure development within city suburbs as challenges in rolling out more affordable housing units.

Rwanda Housing Authority supports introduction of Real Estates Investment Trusts (REITs) and urges real estate developers to raise funds on the stock market.

Kigali could face a housing deficit of 344,000 homes in 2020. 31,000 housing units need to be built annually, with only 800-1,000 hitting the market in the capital of Rwanda. But most of them are not affordable housing.

The government in Rwanda has set up a fund where mortgage rates will be lower than those of banks: 10 %. Rwandan banks charge 16-18 % interest rate, while in Kenya the interest on mortgages is about 27 %. Some houses  in Rwandan cities now cost between Rwf10 million and Rwf20 million (starting at ca USD13,000). Rwandans earning Rwf100,000 or Rwf300,000 monthly can hardly afford even that.

Use this Mortgage and Housing Affordability Calculator availed in March 2016 by Centre for Affordable Housing Finance in Africa and see what it would cost to service a mortgage loan for a US$10,000 house in each African country.

When policy and regulation become counter-productive

Policy inconsistency is often a challenge on African projects. Take a case of a Saudi client that commissioned Singapore’s Surbana to plan a 640 ha site in Algeria. Though the financing and plans were in place, the project never got off the ground. The Algerian government rescinded the land titles for the site.

Surbana has created master plans for the city of Kigali, Rwanda and redevelopment master plans for three zones in the Angolan capital Luanda.

Another barrier to investment in urban housing markets is lack of access to reliable, prompt and local market information.

Despite efforts to create GIS maps and e-approval systems for development permits in some African countries, real estate markets in others are still considered to be opaque. “The data sharing culture with the shared goal of transparency and inclusive growth is still at odds with many stakeholders.”

Content on sites like Estateintel.com in Nigeria — created by real estate professionals — is a way to bring in more transparency into the real estate and land markets in Africa.

Real estate transparency in Sub-Saharan Africa
Real estate transparency in Sub-Saharan Africa

Land markets

A large percentage of land in urban environments is used for roads and utilities. As populations densify more of the utilities go underground. And more public spaces take their place above the ground.With driverless cars, parking lots and garages will not be as necessary as such vehicles will not need to be waiting for you in the CBD. As the garages underneath buildings get removed, the front entrance to the building gets rid of the elevator that was put their initially to get you to the parking garage. At this stage, the access to the front door needs to be changed since all the cars delivering the employees in the morning queue up in front of the building.

Another feature of smart cities — delivery drones — shape the conversation about the location of industrial warehouses in African cities.

However technology is often taking backstage in the discussions of land rights.
Take for example Brazil:

Following the adoption of the 1988 Constitution, which included a chapteron urban policy, a ground-breaking law called the Statute of the City was introduced in 2001 to promote equity and access to urban land. It gave municipalities various instruments to institutionalize the right to the city.

First, it sought to ensure that city management was more democratic by making land use planning mandatory throughout each city and subjecting development decisions to social control and participation (previously planning was essentially an elitist activity and only selected parts of each city were subject to investment and service delivery by the municipalities).

Second, it sought to ensure that the social function of urban land and buildings was put before their commercial value by removing part of the land from the market (previously public authorities had very little scope to intervene in the property sector through planning and urban management initiatives because of the long-held tradition of private property rights).

Across Africa, a clash between statutory and customary land laws often undermines property market development and makes getting legal title a challenge.

USD800-1,000 per hectare in DR Congo can go all the way up to the exorbitant USD100,000 per hectare in well-serviced residential areas of Kinshasa.

For urban planning to be seen as a collaborative process of shared decision-making (as opposed to a top-down, technocratic activity undertaken by government experts, private developers or commercial investors) African societies have a lot of e-governance solutions available. And ‘right to the city’ policies like the ones adopted in Brazil.

One just has to pick and adopt them back at home.

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