The culprits in Botswana�s land shortage

Greg Kelebonye | Tuesday December 2, 2014 14:44

 

Most land seekers as these pictured recently in Oodi, are young people who cannot afford to buy land or get a mortgage

Last week tens of thousands of people besieged Oodi Land board premises, each one of them hoping to get one of about 400 available plots in the areas of Dikwididi, Oodi and Modipane.

It is easy to understand why so many people would stampede as they did over so few plots. The plots are given gratis. On the other hand, to buy such a freely given plot, say in Modipane, you would have to part with no less than P200,000. This is more than 10 times the annual income of most people.

The price of land in Gaborone has gone up nearly 14 times in the last 10 years largely thanks to an influx of foreigners especially those of Asian origin, whose voracious purchasing power pushed land prices up and created much speculation. As land prices went up and most moderate to low-income people could not afford to buy a piece of land or a house, rent also went up.

Young people especially are finding it increasingly difficult to get on the land allocation ladder– which is why over two thirds of land seekers are young people. Many are forced to live at home with their parents with no hope of ever getting a plot of their own. This is the nightmare that the country finds itself having to deal with. Who is to blame?

The government

Bad planning by government, red tape and endless negotiations with field owners, who rightfully refuse to give their land to the government for a pittance are the hallmark of government’s failure. From the time it took power in 1966, the government should have realised that at some point, the little township called Gaborone would be the country’s major city. Proper zoning and planning would have ensured thousands of Batswana who need a plot in the city or its environs get it at an affordable price. But then, there has never really been anything remarkable about government’s land planning. It was this failure to properly zone, plan and service land that led to squatting problems especially in Mogoditshane.

Then came another monster: uncontrolled buying of land, where the moneyed could buy as much land as they wanted. With the influx, especially of Asians, the price of land and other property went up. This was because being foreigners, the visitors urgently wanted land, to set up their thriving businesses and to house their workers who they would have brought along.

And so began the scramble for land, as speculators realised the value in undeveloped or semi developed plots.  With no regulation to keep land pricing in check, Estate Agents had carte blanche to call whatever price came to mind. In the process the poor were left out. Many of them still stay with their parents. Their children are old enough to have their own homes, but without anywhere to go, they also have to stay with their grandparents.

There is no doubt government has painted itself into a corner. The monster it created has become too big to tame and it must find a solution  - and quick. Government needs to come up with a raft of new laws that will make it easier for the ordinary person to acquire and develop land.

 

 Foreigners

A surge in immigration in the last two decades has forced the existing population to compete with newcomers for land. The foreigners have money and do not often care to negotiate down.

While it is true that wealthy foreigners especially from Asia, have been buying up property in Gaborone, Tlokweng and Mogoditshane pushing up prices in these areas, there is little evidence they also influenced prices in other areas.

 

Buy-to-sell/rent landlords

These are normally middle to upper class on the economic rung. They easily qualify for bank loans to develop plots, and then rent out the houses or sell for profit. Younger and low-income earners, who merely need a plot to live in, simply cannot compete with them when it comes to buying plots from private owners. 

The landlords insatiable demand for more land will ensure privately sold land remains too expensive for the low-income group.

While some have complained about those who buy, develop and sell or rent out property, the reality is that our capitalist set-up allows for anybody to buy as much property as they can afford. The landlords are merely using the opportunity to make an extra buck. If anything they are helping to provide homes to (other) middle class income earners by selling and renting to them.

 

Farm owners

Farming communities in areas proximate to the city continue to refuse with their farms as the government tries to buy the land to zone for housing. Most argue the government should provide them with land elsewhere, in addition to paying removal fee of between P25 and P40 per square metre depending on whether the land is developed or not.

Now, there is a political dimension to this problem as politicians have to tread carefully so they do not upset farm owners, some of whom may be of great influence in their communities. The government also has to contend with the criticism that it only wants to repossess only poor people’s farms while leaving the rich .

 

 Botswana Housing Corporation

Often decrying land shortage, BHC only builds very few houses, which it then overprices.  Being the housing monopoly means the corporation also sets the standard for house prices in the country. BHC will talk about having to match the competitions’ prices, but what competition really?

Also, what is the extent to which it has tried to secure land in less affluent places around the city  to build affordable houses for even the low-income earner, as it did in Metsimotlhabe?

 

The banks

It is easier for a Botswana bank to loan a young person a million Pula to buy an expensive car, than to lend the same person the same amount to buy land and build. The excessively risk conscious lenders have placed difficult requirements – starting with very high deposits which often discourage young people from applying for a mortgage loan. Add that to high interest rates and you will understand why many young people who still live with their parents drive vehicles that are more than the value of the parents’ houses. The 30,000 or so young people who besieged Oodi Land board offices are proof of the demand. They are also proof of how difficult it is to get finance to buy land or a house.

Unfortunately, banks are in the business of making money and will eschew anything that suggests they may not be able to recover their money after loaning it to someone.  They are right to be wary about lending to young people who often overstretch their finances and could have trouble making their payments. However, it is time they relaxed their many, often-steep requirements.

 

Land Boards

Firstly Land Boards are too strict when it comes to change of land use, which would allow families who own land in the proximity of cities like Gaborone to use it for housing. Secondly, the amount offered by Land Boards to farm owners is really a pittance and serves as no motivation for owners to cede their land. 

A housing authority like BHC could build a lot more houses –if it had the inclination – in many of the farms around Mogoditshane, Gabane, Mmopane etc. if the Land Boards would do away with heaps of red tape that they place as conditions for such development to take place. Get rid of this process and see more homes being built, not just by the BHC, but also by ordinary citizens who get loans to build and sell.

Sadly Land Boards do not appear to be very much development oriented. Many Land Boards members are influenced by political and tribal considerations and this tends to stand in the way of development.

 

Suggested solutions:

 Government should sell landto those who can afford

Government should start advertising and selling land at market related prices in areas proximate to the city. In doing so, government would need to ensure that only people in a given economic grouping are considered for land in a given area. 

That means the upper middle class would not compete with the lowly paid lower middle class, nor would those compete with the working poor and the poor. This would cut the number of people who compete for land in a specific location, as the qualification criteria would ensure that happens.

The case of BHC house sales is a good example. However government would still need to demarcate and either subsidise or freely allocate land to the working poor and the poor.  It must then ensure the middle class and the rich are disqualified from owning land in areas demarcated for the poor.  This is by no means an argument for a caste system, but for a way out of the mess. Ever heard of a stampede whenever BHC is selling?This is because those who can’t afford simply stay away.

 

Stop speculators

Speculators often hoard land, leave it undeveloped for years and then sell it at high value. Government should step in to guarantee the public good by ensuring those who get land use it or lose it. A reasonable time frame – say two years - should be given for the individual to develop the plot, after which government can repossess and sell it to another person. To avoid legal (and moral) complications suchconfiscations would be done after allocatees are given the right to state why they are not developing the land, as there may be legitimate reasons for their failure to do so.

 

Relax land board regulations for change of use of land

The laws are too restrictive and should be redrawn to allow for development. Supply would as a result increase and prices go down. However  government would need to set standards for buildings and ensure adherence to such laws.