Confronting Affordable Housing Shortage: Stakeholders’ Analysis of Affordability in Dar es Salaam, Tanzania

Sophia Kongela

AfRES from African Real Estate Society (AfRES)

Abstract: The availability of affordable housing has been the most significant long-term challenge for Tanzania's housing sector. There have been many initiatives in the public and private sectors to provide the same. Still, there has been limited success because in most cases, the provision of affordable housing is the function of developers' desired profit margin and household income. Using the case of Dar es Salaam, Tanzania, this study first determines stakeholders' understanding of affordable housing; secondly, it analyses developers' initiatives in providing affordable housing; third, it assesses affordability levels of different stakeholders; and finally, it explores hurdles in providing affordable housing. Using Kobotool box, the study targeted 240 stakeholders, however, 236 filled in a questionnaire, making 98% response rate. The preliminary findings indicate that providing affordable housing challenges both parties. Apart from institutional investors and a few private developers, most developers do not provide affordable housing. One of the reasons is the low affordability level of the majority of households. Other factors that contributed to their decision to avoid offering affordable housing included the high construction cost and the low profit margin. Households have varying interpretations of what constitute affordable housing. The majority appeared to be low-income earners who anticipated being offered affordable housing based on criteria that were not economically viable. Developers also identified a lack of incentives/subsidies as a barrier to providing affordable housing. The study suggests that, while addressing affordability may be difficult, all stakeholders should investigate effective solutions for tackling affordability and affordable housing. This study adds to the ongoing debate on affordable housing, particularly in urban areas with high urbanisation rates and an acute shortage of houses. It is also significant to policymakers who may create an enabling environment for providing affordable housing in Tanzania.

Keywords: Affordability; Affordable Housing; Housing Shortage; Tanzania (search for similar items in EconPapers)
JEL-codes: R3 (search for similar items in EconPapers)
Date: 2024-01-01
New Economics Papers: this item is included in nep-ure
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