Expanding Adequate and Affordable Housing Through Localized Land and Housing Policy Implementation in Hawassa

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Amount Raised

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Total Investors

Project Overview

This project will be the big part of the implementation process of the structural plan of Hawassa city and tests the applicability of the recommendations listed in the document. As a growing economic hub, Hawassa’s population is expected to double in the next ten years. Currently more than half of the population lives in crowded, and poor-quality informal dwellings. The city has not been able to meet the housing needs of its citizens, particularly for the low and middle-income inhabitants, due to inefficient policies, lack of finance and shortage of proper land within the planning boundaries of the city. These challenges are further exacerbated by the lack of financial and institutional/ technical capacity of the municipality. Projections of housing demand which very high show that the city of Hawassa needs an integrated approach for mass and diversified housing development. This involves innovative and comprehensive strategies to mobilize housing finance, increase access to land, and enhanced capacity in policy formulation and implementation.

Sectors

  • Affordable Housing
  • Informal Settlements Upgrading
  • Urban Infill & Public Space
US$30,000,000
Funding Goal
Ethiopia
Country
Africa
Region

Objectives

The overall goal of this project is to initiate the implementation of the structural plan of Hawassa. Focus will be given to strengthening the policy framework on land value capture to contribute towards developing affordable housing and to the overall urban development of Hawassa city and its environs. The creation of a stronger and innovative city administration is critical to achieving the housing production goals and targets.

The specific objective is to create institutional arrangements responsible for enacting land value capture regulations and their enforcements fully. Modelling development, redevelopment or land readjustment project based on the land value capture tools and the application of cross subsidization in the production of affordable and sustainable housing models. Preparation of localized laws, regulations and manuals for the full application of the tools. Piloting one redevelopment project to test the limitations and potentials of the proposed models. An initial project on inner-city neighborhood redevelopment has been prepared as part of the structural plan.

Progress Tracker

Phases

  • Phase 1

    Modelling development, redevelopment or land readjustment project based on the land value capture tools and the application of cross subsidization in the production of affordable housing production.

    The project will have three phases which is blended with a capacity development activities to strengthening the local policy framework on land value capture together with institutional arrangement or rearrangement. The first two activities are expected to create the favorable condition for the third action to take place and taste the success and limitations of the works done in the first two phases.

    The structural plan of Hawassa has laid out the framework for the different tools and strategies on how to expand affordable housing in the city through the land value capture mechanism. This also include possible institutional setups, guidelines and laws to apply land value capture tools. In addition, as part of expected deliveries of a structural plan in the Ethiopian context, two local developments plans were prepared. One of these plans will be part of the proposed project to be implemented as pilot. However, the proposal is subject to modification upon actual implementation. Overall it is possible to say that initial documentations and proposals are available for the proposed project to start with in the first phases of the the project activities.

  • Phase 2

    Preparation of localized laws, regulations and manuals for the full application of the tools.

  • Phase 3

    Piloting one redevelopment project to test the limitations and potentials of the proposed models.

    The third phase involves piloting a redevelopment project through construction of housing and infrastructure which itself will be implemented on different phases. Since the project is still in conceptual stage it is expected to have seven stages of implementation which is also subject to amendment later on upon the outputs of the first two activities and changing circumstances. The pilot project on inner-city neighborhood redevelopment will have the following seven phases of implementation as envisaged at this point:
    1. Pre-operation-Formation of technical coordination committee; public participation platforms to create awareness and negotiation with community about the importance of the upgrading and redevelopment of the area; revision of the socio-economic study to understand the preference of households in the rehousing process according to the strategies suggested to fit to different existing tenures and people’s choices, willingness and ability to afford new housing; preparation of public rental units for temporary or permanent housing option for relocated people. This is done through assessing available vacant houses or expropriating households which possess public houses in illegal way
    2. Temporary or permanent relocation of existing dwellers- depending on choices made by residents partial temporary or permanent relocation will be organized to give way for the development of few of the new housing and infrastructure upgrading works
    3. Construction of the social Housing - construction of social housing on the cleared area and upgrading the infrastructure.
    4. Allocation of the newly constructed houses - allocation of rental units for relocated and onsite residents who chose rental houses; selling of units to to those who applied for it; selling of other units of housing and commercial units on competitive market price
    5. Leasing out of plots along the main street for commercial development - application of additional land value capture tools to increase the revenue generated from the land value change as well as in expanding housing.
    6. Development of the social services and public space - proposed social services will be developed or upgraded
    7. Redevelopment of the rest of the area

Current Stage

Concept Stage

Timeline

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Project Milestones

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ESG Impact

The rapid urbanization puts a high demand on infrastructure and housing in many Ethiopian cities. As a growing economic hub, Hawassa’s population is expected to double in the next ten years. Currently more than half of the population lives in crowded, and poor-quality informal dwellings. The city has not been able to meet the housing needs of its citizens, particularly for the low and middle-income inhabitants, due to inefficient policies, lack of finance and shortage of proper land within the planning boundaries of the city. These challenges are further exacerbated by the lack of financial and institutional/ technical capacity of the municipality. Projections of housing demand show that the city of Hawassa needs an integrated approach for mass housing development. This involves innovative and comprehensive strategies to mobilize housing finance, increase access to land, and enhanced capacity in policy formulation and implementation.

In addition, the policies and strategies must be inclusive and take into consideration the needs of low-income earners. The proposed project will try to contribute to efforts to overcome the above mentioned challenge inside a local capacity. Economic constraints will be resolved by creation of enabling environment for cities to expand their revenue base so that they can fund key infrastructure developments to provide basic services to the population. Effective application of the land value capture tool and creating conducive setup for innovation and experimentation of new ideas will widen revenue sources to the city. This is taking advantage of current policy directions which are being shifted from a top-down centralized thinking to allowing cities to become innovative and manage their urban development challenges at all levels. The proposed pilot will be a redevelopment project located in an old and aging neighborhood where land values are very high. People in the area are living in conditions where houses are poorly constructed, services are shared and deteriorated and where open spaces are completely absent. The project is expected to change the living and the housing condition of those people living in the area and additional people from the city looking for affordable and adequate housing. People will be able to benefit from the new housing development though affordable rent or purchase based on their ability to pay. Investors will take part in the process developing the areas allocated for economic development and share costs for housing and infrastructure development. Mixed development will create job opportunities for the dwellers, contribute to the creation of compact city and reduced CO2 emissions.

Beneficiaries

1. Existing dwellers- who are living in poor condition government owned houses will be rehoused in the same location with adequate and affordable housing through rent and purchase
2. Existing dwellers- who own a house in the site will be given options to build mixed use building on the same site or elsewhere based on preferences.
3. Other city dwellers – as the redevelopment will allow more houses to be built, residents of the city looking for housing will benefit from the project through rent or purchase
4. Investors – will get a valuable land to invest on a business
5. Job seekers – as the development will bring more places of economic activities which are indoor and outdoor, people looking for employment or starting business in the area will be benefited
6. All the rest of the city inhabitants- as the project intends to create a walkable, vibrant, mixed and a livable neighborhood, people will find it to be a better place to spend time and go to. The revenue generated from the development will also help to increase the cities revenue and replicate similar projects.

The total number of population which are going to be directly affected by the redevelopment will be 7290. This are existing dwellers of Adare locality.

SDG Goals

SDG 1: No PovertySDG 2: Zero HungerSDG 3: Good Health and Well-beingSDG 4: Quality EducationSDG 5: Gender EqualitySDG 6: Clean Water and SanitationSDG 7: Affordable and Clean EnergySDG 8: Decent Work and Economic GrowthSDG 9: Industry, Innovation and InfrastructureSDG 10: Reduced InequalitySDG 11: Sustainable Cities and CommunitiesSDG 12: Responsible Consumption and ProductionSDG 13: Climate ActionSDG 14: Life Below WaterSDG 15: Life on LandSDG 16: Peace and Justice Strong InstitutionsSDG 17: Partnerships to achieve the Goals

Rationale

UN-Habitat’s technical support to the revision of Hawassa city structural plan gave high consideration to the alignment of the plan to contribute to the SDGs especially to SDG 11 and the New Urban Agenda which explicitly addressed cities and human settlements. Thematic area studies has identified different problems in the city in which the goals and targets to overcome the problems were tried to align with national and global frameworks of SDG11 and the new urban agenda. This is done with UN-Habitat’s recognition that local governments as key actors for sustainable development, and to enable them to provide better policy and development frameworks. This specific project is aligned with the specific target under SDG11 which is 11.1 which states “By 2030, ensure access for all to adequate, safe and affordable housing and basic services and upgrade slums.” It is understandable that the success in achievement of one of the goals in SDG will have interlinked effect and contribute to the achievement of the other goals. For instance people leaving in an adequate and affordable housing are lift up out of poverty, contribute to zero hunger and quality education as household incomes are fairly proportioned between housing payment, food and other expenditures including education.

The performance of the city will be measured by the following key indicators identified in the document:
1. Proportion of urban population in slums and informal settlements /Proportion of population
living in households with access to basic services
2. Proportion of urban population living in inadequate housing
3. Proportion of housing units purchased through mortgages, loans and other micro-credit and credit schemes / default rate in home loan/mortgage

Risks and Limitations

What are the key risks, constraints and dependencies related to the project?

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Risk mitigation and continuity

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Financing

Funding Goal

US$30,000,000

Subject to revision.

Type of Investment

Concessional loan

Financing Structure

Public Private Partnership

Secured Investment

There is no investments made up to now other than the initial local development studies made as part of the structural plan preparation of the city.

Committed Government Funding

N/A

Committed Private Funding

N/A

Support

Technical Support Required

Expected outputs under each EAs

Under EA1:
• New institutional structure is developed
• Board is created to assure accountability and transparency through public participation
• Dedicated agency for policy implementation and housing development is created
• Human and logistical resource are mobilized

Under EA2:
• Capacity is built through trainings and experience sharing of other countries
• Capacity is built in the development of manuals and regulatory frameworks for housing development based
on land value capture tools
• New manuals, laws and regulatory frameworks are designed

Under EA3:
• Data and information is updated for the NDP prepared
• Designs are revised
• Cost and implementation strategies are revised, and details are prepared
• Contractors and implementing partners are selected.
• The pilot redevelopment, land readjustment model is implemented

Stakeholders

Governmental Buy-in

Ministry of Urban Development and Construction
Ministry of Finance and Economic Development
Sidama Regional State
Sidama Regional State Urban Planning Institute
Hawassa City administration

Other Forms of Governmental Support

N/A

National Ministries Involved

National level - Ministry of Urban Development and Construction
Ministry of Finance and Economic Development

SubNational Ministries Involved

Sidama Regional State
Sidama Regional State Urban Planning Institute
Hawassa City Administration

Other Entities Involved

Ethiopia Industrial Parks Development Corporation
Commercial Bank Of Ethiopia

Licenses and Permits


N/A

Updates

Supporting Documents

No supporting documents included.

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