the wrongs with decent housing rights in kampala
KATUREEBE SHANON and EDDY KYAZE
Decent housing is a right, but what happens when a significant proportion of the population cannot enjoy that right? Nairobi is home to the largest slum in East Africa—Kibera. Kampala too is home to ever growing slums.
The growth of slums cannot be attributed to the personal choices of their inhabitants, but rather the glaring effects of real estate capitalism propelled by the wheels of grand scale moral decay: greed, corruption, theft, cheating.
Neoliberalism has become the dominant ideology globally. In most of the East African countries, the pro-market economic reforms that front this ideology of extreme capitalism were carried out in the early nineteen eighties, claiming to foster growth and efficiency. These included privatization, deregulation, and labor and financial reforms. These neoliberal reforms have not only targeted the reshaping of the economy but also of the society and culture. The reforms aimed at the emergence and consolidation of ‘market society’ (free-market, capitalist social relations), with a corresponding set of moral norms of behaving and relating to each other (self-interest, individualism, utility-maximizing behavior, transaction-based relations, money).
There has been claim of neoliberalism bringing more growth. We must resist this claim. During the bad old days of Keynesian policy, per capita GDP growth rates in the OECD averaged 3.5% per year. By contrast, the neoliberal reforms that were imposed beginning in the 1980s slashed growth rates down to 2% per year. The shift was even more dramatic across the Global South. During the 1960s and 70s, Global South governments used tariffs, subsidies, price controls, capital controls, and land reforms to brilliant effect, growing GDP per capita by 3.2% per year. This came crashing to an end during the 1980s and 90s, as free-market principles were forcibly imposed by the IMF and World Bank. Growth rates collapsed to 0.7% during the neoliberal period. Sub-Saharan Africa was hit particularly hard, and its average real income is only now recovering to the 1970s levels. This historical record is clear: neoliberalism has been bad for growth while accelerating the wealth of the rich.
photo by Lauren Parnell Marino
Before 1986 there were malpractices in the economy, but they were kept in check by state regulations, by a specific set of social values and moral norms (and related sanctions), and by the quality-control practices of the cooperatives that were a central part of commercial agriculture. Cooperatives were destroyed as part of the reforms and their economic function was performed, instead, by traders, many of whom were agents for larger corporations. New evidence now seems to suggest that neoliberal policies have instead perpetuated inequality, crippled trade unions, and entrenched the power of the political and economic elite. Cultural dimensions of rapid neoliberal reforms have negatively affected the relationships and trade practices between traders in markets, as characterized by high levels of malpractice. These malpractices include deception, intimidation, theft, collusion, corruption, and various manipulations regarding price, quality, and quantity of products and services.
The first crack in Uganda’s Public Housing industry started during the Idi Amin regime (1972-1979) when Asians were expelled from Uganda. Many real estate developers fled the nation, leading to negative growth in the industry. The second crack with far-reaching negative consequences followed thereafter. This was largely due to the neoliberal reforms embraced in the early 1980s. These were characterized by the withdrawal of support and commitment from the highest level of the current government to support the institutions mandated with providing affordable decent housing to the citizenry. These institutions include National Housing and Construction Company, Housing Finance Company, and National Insurance Corporation. The institutions were crippled by capitalization as others were sold off to private investors. This was the beginning of neglect of the government’s social responsibility to provide decent and affordable housing to its citizens. Consequently, the low quality of housing in the country today mirrors lack of critical state support in the housing industry. This has over the years given birth to slums in areas like Kisenyi, Katwe, and Kalerwe, among others in Kampala city. Today, over 60% of Kampala’s population—mainly the urban poor—lives in rental houses in slums.
State intervention in the housing industry can be traced to National Housing and Construction Company, Housing Finance Company, National Insurance Corporation, and National Social Security Fund. The policy and legal framework embedded therein to provide affordable decent housing to citizens paints a very beautiful picture.
However, this beautiful picture ends up meaningless beneath the interests of commercial banks and real estate capitalists who ride on theneoliberal ideological spirit of the present government. Commercial banks lend money to real estate developers at exorbitant interest rates, consequently inflating the costs of construction. To service the bank loan, real estate developers put the burden on tenants, thereby charging very high rent or very high prices for those purchasing property.
It should be noted there is a very high appetite for rental housing as opposed to home ownership over the last 10 years. A recent report by the National Housing and Construction Company indicates the number of Ugandans renting houses in urban areas has increased by more than 40% in a span of just five years. This and several other factors have provided a strong impetus for commercial banks to enter the housing finance sector. Commercial banks’ mortgage lending has since 2002 grown at about 45% annually. Such interests of capital have strategically squeezed out any meaningful state intervention in providing affordable decent housing to the general population of Uganda. Those who cannot afford decent housing have taken up dwelling in the under-developed parts of urban centers, hence creating informal settlements.
Informal settlements are rapidly developing due to an increasing population, largely dominated by low income earners. One prominent example of the informal settlements are the tenements (mizigo) which consist of either a one stand-alone room, or as connected building extensions of many commercial premises with an occupancy of up to 7 adults.
The current government’s failure to deliver affordable housing to citizens is a deliberate attempt to block public sector investment in the housing industry. This is because the government is in possession of all minimum requirements such as ownership of prime residential land in the city center and suburbs, an enabling legal and policy framework, as well as two sound financiers: National Social Security Fund and Housing Finance Company.
In these unequal times, the younger generations are turning away from capitalism in their millions across the world, eager to build a fairer, more just system that has a better chance of seeing us through the 21st century. The real issue with capitalism is its short-termism at the expense of more important things: workers’ welfare, public health, etc. Uganda, with one of the youngest and fastest growing populations, requires urgent state intervention to make decent housing affordable. Clearly, the answer is not leaving the housing needs of the future generation to real estate capitalists with their predatory tools: mortgages, leases, unreasonable property costs. What people need is a fairer economy—one not captured by elite interests.
Article photo by Graham Hobster
