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NewsDay

AMH is an independent media house free from political ties or outside influence. We have four newspapers: The Zimbabwe Independent, a business weekly published every Friday, The Standard, a weekly published every Sunday, and Southern and NewsDay, our daily newspapers. Each has an online edition.

Stop co-operatives from further destroying housing market

Columnists
A STRONG housing market usually denotes a growing economy and a weak one the opposite. Governments try to keep it growing modestly, but not to fast as to cause a property bubble, or too slowly as to curtail investment.

A STRONG housing market usually denotes a growing economy and a weak one the opposite. Governments try to keep it growing modestly, but not to fast as to cause a property bubble, or too slowly as to curtail investment.

Zimbabwe’s housing market, despite the need being high as opposed to the depressed demand, is in doldrums.

An imploding American housing market due to sub-prime mortgage by an over-exuberant financial sector ushered in the World’s Great Recession in 2008.

In Zimbabwe, unplanned development, outside the law, and led by so-called land barons and housing co-operatives, has succeeded in doing more damage than what the sub-prime mortgages did in the United States.

These co-operatives that invade peri-urban land for a small bribe to dubious property developers, have destroyed the once vibrant housing market in the low income category, dealing the already reeling economy a severe self-inflicted blow.

Early in 2015 the media reported that CABS, the country’s biggest building society, was having problems finding buyers for its recently constructed two-roomed core houses meant for the low-income groups seeking their first home.

The society defines low income as a monthly wage of at least $750 which is way above what most workers in industry and commerce, let alone in government service, take home.

While its laudable to prioritise first-time buyers, the reality is the economy is no longer creating new decent jobs, and even those that have been in formal employment for a decade or two, if not three, can no longer afford these most basic of houses.

CABS said afterwards the Harare City Council list of those needing houses had proved useless, as when invited to take up its products, the applicants had often proven to be unbankable, with hardly an income and no means ever to pay back any housing loan.

A due diligence exercise by the Ministry of Local Government and National Housing would have led to the list being shredded and new a one compiled, possibly under the aegis of building societies.

The vast majority of building co-operatives that had taken over the task of city councils, government and building societies have failed their members.

The money in their accounts needs to be deposited into building societies who would then manage housing construction projects as CABS is doing.

The market, however, needs to be of those who can afford to pay for the houses and rent them out, which is now the case when common sense eventually prevailed.

But this has not stopped the Ministry of Local Government and National Housing from parroting its desire to construct 300 000 houses that a lot of families need but cannot afford. Indeed the ministry also wants to build a new capital, without justification, given Treasury’s constraints.

With people unable to afford houses, building well-planned suburbs, with houses and flats for renting out, would have been a more viable solution. To avoid self-inflicted economic injury, a keen eye should have been kept at the housing market in the high-density suburbs.

That the bankrupt policy of using unbankable co-operatives as drivers of housing stock construction may now be all but dead offers an opportunity to the new minster to craft a sustainable housing policy. It is a formidable challenge given the deficit of jobs in the country’s cities.

But it may have to begin by reducing councils’ salaries to revenue ratios to 30% to free resources for goods, services and capital projects such as houses and supporting infrastructure.

The sustainable solution, though, to urban housing, is creation of jobs first. Job creation in a global village requires the deployment of a three-pronged strategy: (good quality) education, migration and redistribution.

While there is universal acceptance of the role of education, the other two suffer from political interference. Zimbabwe could do well to cleanse that.

Migration, for example, which can help and has helped significantly, suffers from constraints imposed by the Registrar-General.

Even though the country’s Constitution allows dual citizenship, the Registrar-General holds out for an “enabling law”, possibly secretly hoping an amendment of the supreme law to bar dual or multiple citizenships altogether would be better.

He needs to be more fleet-footed and allow dual or triple citizenships. If not, the Vice-President in charge of policy co-ordination needs to knock some sense into his head.

In the short term as well, the Ministry of Local Government and National Housing, or a techno-savvy entrepreneur / company, may need to compile an online data base of rooms or houses for rental, as opposed to expanding the physical area Harare or Bulawayo occupy, which area makes servicing the city with amenities, as well as delivery of social goods and services, expensive — beyond the cities’ ability to fund.

 Tapiwa Nyandoro can be contacted on [email protected] or [email protected]