Cost Shares and Factor-Cost Ratios in Owner-Built Incremental Housing in Dar Es Salaam, Tanzania

Abstract

Abstract:The adoption of incremental owner-built techniques in housing construction relies on the associated lower cost compared to developer-built approaches. The mechanism that lowers cost is however, not obvious. This study is based on survey data that were collected using questionnaires which were distributed to 200 respondents in Dar es Salaam, Tanzania with response rate of 22.5%. The analysis results, based on descriptive statistics and regression analysis indicate that an incremental house-builder targeting an additional bedroom incrementally spends 28% lower annual construction cost and each additional square meter built, is associated with 0.4% lower cost. However, such lower cost comes at a 5%-10% longer completion time. These observations suggest that spreading costs over time reduces construction cost through multiple cost-saving channels opened up by time itself and factor intensity. The intensity of incremental housing construction favours increasing expenditure on labour than capital yielding a 5% reduction in annual cost but the greatest cost reduction benefit of up to 26% is realised through increasing expenditure on "capital" with fixed spending on materials during construction.

Constraints Facing Incremental Housing Construction in Dar es Salaam, Tanzania

“…This makes incremental construction economically expensive but cost flexible to user because overall construction cost is spread over time. Many incremental housing construction projects are completed between 6-20 years (Magigi and Majani, 2006;Greene and Rojas, 2008;Bangdome-Dery, Eghan and Afram, 2014;Alagbe and Opoko, 2013;Alananga and Lucian, 2016), something that may trigger cost-push factors. The findings from Alananga, Lucian and Kusiluka (2015) established that peripheral incremental builders spend more per annum on construction cost compared to those constructed in inner-city formal areas.…”

“…The above noted dynamics culminated to a major shift away from government supplied rental housing towards owner-built incremental housing (Komu, 2013;Alananga and Lucian, 2016). This paved a way for the rapid growth of informal settlements within or in the proximity of major cities across the globe.…”

“…These authors found that incremental housing strategy was also used by middle and high income building both single and multi-storey residential and commercial buildings. In the context of Tanzania, a number of researchers have examined the nature of incremental housing approaches such as Nguluma (2003) who analysed incremental housing transformation, Sheuya (2007) who analysed financing mechanism for incremental housing, Alananga, Lucian and Kusiluka (2015) who examined cost-push factors in incremental housing and Alananga and Lucian (2016) who analysed factor proportion and its impact on incremental housing cost. Contrary to the rest of the world, studies on Tanzanian cities unanimously coincide that incremental owner built housing is not directly related to low income and low quality environment.…”

Making Room for Renters: Understanding and Supporting Rental Markets in the Global South — Evidence from Dar es Salaam, Tanzania

“…Peppercorn and Taffin 2013). It is not straightforward to estimate the costs of incremental building -even property owners find it difficult to estimate because the building often occurs over a long time period (Sanga and Lucian 2016;Precht 2005).…”

Meanings of Self-Building: Incrementality, Emplacement, and Erasure in Dar es Salaam’s Traditional Swahili Neighborhoods

“…These territories are always in the making, as "people inhabit spaces that are clearly precarious and unfinished, but with the expectation, frequently realized, that the spaces will improve and one day look like wealthier parts of the city" (Caldeira, 2017, p. 5). In the African context, self-built housing is prevalent (Groenewald et al, 2013) and unfolds primarily on unsurveyed land through processes of settlement planning and development that residents and/or local organizations run, outside of state support and/or without access to financial capital (Sanga & Lucian, 2016).…”