Sunday, February 15, 2009


This paper is going to discuss about issues concerning affordable shelter. The paper will consist four parts; the introduction part which include the historical background, the policy review part, the empirical review part and the conclusion.

More than one billion of the world’s city residents live in inadequate housing, mostly in the sparkling slum and squatter settlements in developing countries. Such areas are regarded as one of the most visible expressions of human poverty. The lack of adequate housing is the pressing problems of the 21st century, and the cost of providing adequate shelter for all is immense. Yet the cost of doing nothing may be even greater, for the new urban slums are potential breeding places for social and political unrest. The global data on housing adequacy is rather limited, however, and what is considered adequate in one part of the world-or at one point of time may not regarded so elsewhere.

The global housing stock in cities amount from 700 to 720 million units of all types. It is estimated that 20 to 40 million urban households are homeless. Some developing countries achieved an improvement in urban housing conditions, though many were unable to cope even with current needs. The situation may become even worse, as households sizes decrease in most countries, and the number of households groups considerably faster than urban populations. In the cities of developing countries, housing delivery systems need to cope with an annual additional demand of some 18 million units, amounting to an annual increase in housing stock of nearly 5 percent.

Formal construction in the cities of developing countries principally serves moderate to upper income groups; leaving lower income populations to address their housing needs through informal means. Wide spread unauthorized housing disregards building regulations.

There are number of policies and pieces of legislation that relate to and affect unplanned/informal settlements. A critical land policy is the 1995 National Land Policy which effectively prohibited the removal of informal settlement and committed the government to upgrading them instead. The local government urban councils act of 1982 and subsequent legislation effectively restored local government as an institution, restoring to it the responsibility for service provision.

The government’s ongoing urban sector policy reform is designed to create an institutional environment more conducive to the sustainable development and delivery of urban infrastructure and services. Through the world supported Urban Sector Engineering Project(USRP) began in 1995 contained the governments letter of sector policy that addressed land management and human settlement development issues, the role of the private sector and community participation. The government have recognized the importance of the urban sector in national social economic development and conducted a human settlements review and prepared a strategy which aims at “creating sustainable development in urban centers for improving living conditions in informal settlements, alleviating poverty, stimulating economic growth and employment and improving the urban environment”.

In order to guide the implementation of the strategy, the government prepared a national Program Document consisting of the following four closely interrelated elements:
· Improve the capacity of the public sector institutions to implement the sustainable human settlements program through human resources development.
· Improve the management of urban land, access to affordable urban services, and the living environment.
· Improve the quality and increase the quantity of affordable shelter
· Stimulate economic growth and employment

In order to implement the program the government sought assistance from, among others, the World Bank, The United Nations Development Program (UNDP) and Centre for Human Settlements (UNCHS) through the USEP and SDP respectively.

The USEP redefined the roles of the central and city governments and established the basis and financial management within the city. The consultation process in the SDP identified upgrading unserviced settlements as the second most pressing priority issue to be addressed by the project. In an attempt to build upon these initiatives, and to coordinate strengthen such intervention, all interested stakeholders adopted a two Point Strategy of Action. This was:
I. To encourage community groups to form associations and define their priority needs; mobilize local human and financial resources; seek technical advice and decide on affordable levels and standards of service provision; participate in infrastructure construction and accept management responsibilities for operations and maintenance.
II. To encourage city and central government departments to provide the institutional framework to respond to such community participation. This should include the provision of technical and professional staff to design and supervise infrastructure construction, coordinate and fund trunk infrastructure provision, and facilitate equitable cost recovery mechanisms.

As per Human Settlement Policy in Tanzania, became of the absence of formal affordable housing, the majority of the urban population has resolved to accommodate themselves in overcrowded and substandard dwellings.

Urban housing problems in Tanzania appear to be two folds: -

a) Inadequate housing stock in most urban areas

b) Poor housing conditions in rural areas.

Tanzania is a large country with an area of approximately 945,100 sq. km. and a population of approximately 31 million. Population density is thus approximately 32 persons per square kilometer. It is among the developing countries with GDP per capital of approximately US$220(1997).

Of the total population, 25 percent live in urban areas but the urban population is growing rapidly at over 6 percent per annum, around twice the national rate of population growth. The country is divided into 20 regions for political and administrative reasons. There are ten major towns with populations of 150,000 with the major city and port, Dar es salaam, having a population of approximately three million.

Despite government emphasis in the past on improving living conditions in the rural areas, rapid urbanization has continued. Investment in the public and private sector have not kept pace with population growth in urban areas Low level of urban management capacity and inappropriate institutional arrangements have hampered the development of the urban sector. Demand for infrastructure and urban services have not been met, worsening the nature and incidence of urban poverty, as well as constraining national economic growth and productivity.

Tanzania’s rural to urban migration is the result of the decline of the international primary commodity prices (mainly from coffee and sisal) in the 1970 1980’s and other disincentives to national farmers that helped push rural producers to the town in the search of employment. Potential income streams, education and other subsidized or free public goods and services led many rural dwellers to Tanzanian largest city, Dar es salaam, and other secondary cities.

In Tanzania, increasing levels of poverty, population growth and the lack of sustainable housing policy mean that urban growth is often absorbed into informal settlements. These areas are characterized by a lack of basic infrastructure and the ever increasing poverty of their resident’s mean that many do not have the ability to pay for the services. Many urban residents cannot afford housing, and authorities themselves have few resources with which to improve or maintain infrastructure and services. Consequently the housing , health and environmental conditions in the growing informal settlements of Tanzanian’s cities are extremely poor.

Dar es salaam is growing at the rate of approximately eight percent per annum and suffers most from these endemic problems. With 70 percent of the urban population accommodated in informal housing, the ability of the city government to cope with timely delivery of infrastructure services is severely constrained. Informal settlements continue to expand and it have been estimated that 50 percent of informal settlement population lives on an average income of about US$1 per day, well below the poverty line.
In the 1960’s, the approach to dealing with the growth of informal settlements in Tanzania, and in particular Dar es salaam, was the common approach of slum clearance. The objective of slum clearance was to rid the city of the eyesores of squatter housing. To improve housing for the poor the government implemented its slum clearance and redevelopment policy by developing high standard building on the cleared sites. The policy was implemented through the National Housing Cooperation but proved unsustainable. By the end of the 1960’s, it was abandoned due to high economic and social costs. The net addition to the housing stock was negligible.

In 1972 the government adopted a softer approach to dealing with squatters. Through until the late 1980’s sites and services and squatter upgrading projects formed the national strategy for managing the growth of unplanned, informal settlements. The world Bank initially supported these projects, which aimed to provide basic infrastructure and services, together with community facilities.

The world Bank ceased support after its second project because of poor performance. After withdrawal of the World Bank, the Government alone could not finance additional projects and subsequently there were only isolated projects in Dar es salaam with negligible improvements in unplanned settlements. The decade of 1980-1990 was characterized by expansion, consolidation and emergency of new unplanned settlements at the same time as the infrastructure installed under the early projects began to deteriorate due to lack of maintenance.

The problem in many developing and even in some developed countries is not that housing is too expensive but that incomes are too low. It is clear that an efficient housing finance system is a necessary but not a sufficient condition for the development of sustainable urban shelter and that improving the access of poor households to adequate shelter has two further requirements; reducing housing production and delivery costs and increasing income levels. The focus of attention should therefore be on both the costs of housing and the level of payment received by workers. This demand side focus is in line with current trends in subsidies and concentrates attention on the systemic problem of poverty, which is the underlying source of poor shelter conditions.

In processing housing loans, lenders should take into account future income generated, directly and indirectly, from house improvement. There is a well documented link between finance for income generation and improvements in housing. Many home owners operate one or more home-based enterprises from the structure on which they housing finance. The same goes for rental income.

The cost of urban housing can be reduced by the adoption of more appropriate standards. In many countries, the cost of urban housing is increased significantly by high standards to which it must comply. The introducing of lower standards that are more appropriate to the local context could potentially make housing more affordable to a far greater proportion of the urban population. Lower standards would still, however, have to safeguard the heath and safety of the occupants and protects the public interest.

Most national shelter, some of them supported by official development assistance, are based on the provision of independently serviced, single house hold dwellings, owned by their occupants. However, this is by no means the main form of occupation by households living in poverty. Instead, large numbers of households live in buildings occupied by many house holds.

Small scale landlords in informal settlements are a major source of affordable housing for a growing majority of households living in poverty in the towns and cities of developing countries, but there are few initiatives to assist them. It is imperative, therefore, to understand how best to assist the informal rental sector within informal settlement and slum upgrading programmes, and at the same time preserve affordability so as to preclude gentrification.

Finance to provide health liquidity among small scale contractors and single artisans is an essential prerequisite to effective housing supply to scale. In the spirit of the Habitat Agenda, and if the current massive housing backlog is to be cleared at all, it is vital that all actors in the housing process are involved in the role in which they are most efficient. The most important supplier dwellings for urban low-income communities, and their ancillary services, are the millions of small scale building contractors, the single artisans or small groups of skilled people and the labourers who service their needs.

It is also important that developing countries maintain as much of the investment and savings arising from local economic activities within their borders, or benefit from net inflows from investments overseas.

Shelter Microfinance
The majority of urban poor households can only afford to build incrementally in stages as financial resources become available. It is therefore imperative that national and international institutions recognize that low-income people build incrementally and provide microfinance suitable for that process. This may also call for reform of building regulations that often do not allow incremental for formally recognized dwellings.

Community base shelter funds
Another significant trend in the last decade has been increasing interest in the shelter community funds group loans. Community-based financing of housing and services has been used for both settlement upgrading and for building on green field sites and in a context where small loans are evidently successful and where there is an increase in poverty; it has many advantages for low-income and otherwise disempowered households.

Different studies show that there is an increase in population in cities like Dar es Salaam, Mwanza and Arusha, and this results or causes a big gap between the demand and supplied.

Conclusively, Housing is part of macro economy of Tanzania. By increasing housing quantity and sustainable good environment from community levels we invest more in expanding tax base and increase the tax revenue of the country.

Increasing housing quantity and sustainable environment will generate employment in communities. By creating employment many people will generate income, serve more and finally improve their living standards.

Communities are going to accelerate economic performance since these houses can be used as mortgage to increase their wealth. That is one way of reducing poverty.


1. United Nations Human Settlements Programme, Financing Urban Shelter (2005); A global Report on Human Settlement, EARTHSCAN London.

2. National Human Settlements Development Policy, Te United Republic of Tanzania.


4. Peramiho Home Makers League Tanzania










TOPIC: Issues concerning affordable shelter for the urban poor



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