Editor's Comment

Let’s make housing investment affordable

HOUSES for members of staff at Kalabo Trades Training Institute.

FORMER United States of America President Jimmy Carter once said decent housing is not just a wish, it is a human right.
The United Nations, on the other hand, has designated the first Monday of October of every year as World Habitat Day to reflect on the state of towns and cities, and on the basic right of all to adequate shelter.
The day is also intended to remind the world that all the people have the power and the responsibility to shape the future of our cities and towns.
Therefore, that Zambia has a housing deficit of 1.5 million which may double to three million if no urgent interventions are made by 2030 is alarming.
The country has found itself in this situation because prior to the house empowerment scheme which was initiated by late President Frederick Chiluba, most Zambians were comfortable not to invest in housing because the government provided free accommodation.
Local authorities and institutions such as National Housing Authority rented out houses cheaply.
People would either “go back to the land” after retirement or buy a house.
Had it not been for the housing empowerment scheme which saw Government, local authorities and several companies sell houses to sitting tenants, the country could not have seen the unprecedented levels of investment in the housing sector and the housing deficit would have been a lot worse than it is now.
Therefore, Zambians should actually be grateful to late President Chiluba for the housing empowerment scheme because it was after that scheme that Zambians woke up from slumber and saw the importance of investing in housing.
In Lusaka, that is how several townships such as Chalala, Kamwala and Libala South, including several housing schemes such as Meanwood and Nkwashi, among others, came about.
Despite such initiatives, the country is still faced with a huge deficit – thanks to the increase in population.
Vice-President Inonge Wina said yesterday that the current deficit stands at 1.5 million, and if no urgent intervention measures are taken, it may swell to three million in 2030.
The Government ought to find innovative ways of building cheaper houses and selling them at affordable prices and friendly payment terms, especially to civil servants, so that they are empowered.
If the government built houses en masse, it could enjoy economies of scale and pass on the benefits to its employees. Giving its employees an extended period of time to pay for mortgages will ensure that even the least paid employees will be in a position to own a house. The risk of default is also reduced as the government can recover its money through the payroll.
For non-civil servants, the government should try to make mortgage finance affordable by giving some tax rebates, removing property transfer tax for bare land meant for residential developments.
Attracting investment to reduce the housing deficit is unattractive because of the expensive lending rates, and the payback period for real estates is quite long.
Look at institutions like NAPSA and National Housing Authority, and the story about how they struggled to sell their units even after going into agreements with banks for mortgages is a sad one.
One of the biggest challenges that we have is access to affordable mortgage finance.
The government remains the biggest employer and a majority of workers in the Government do not get decent salaries that are capable of taking care of their daily needs, plus servicing mortgages, which are pegged at 18 percent and above.
What Zambia needs is affordable finance for housing and also innovative and affordable housing solutions that will be able to cater for the Zambian market, which is predominantly a mass market.

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