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Ready-Made Shacks: Learning from the Informal Sector to Meet Housing Needs in South Africa

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Ready-Made Shacks: Learning from the Informal Sector to Meet Housing Needs in South Africa 2068 CIB World Building Congress 2007 CIB2007-087 Ready-made shacks: Learning from the informal sector to meet housing needs in South Africa Gonzalo Lizarralde ([email protected]) Dave Root ([email protected]) ABSTRACT The informal construction sector has been the only industry capable of providing affordable housing solutions for the urban poor in developing countries. While South African housing policies rely on the formal construction sector for attaining the ambitious targets of subsidized housing delivery, townships keep growing with the support of informal processes. The strategies and outputs of both sectors are dramatically different; while the formal industry relies on standardization, repetition, and the use of new materials and a single technology, the informal sector takes full advantage of variety, multiplicity, recycling and combination of technologies. Surprisingly, this does not prevent the informal sector from looking for specialization and innovation. In South Africa, one of these remarkable innovations is the market of pre-fabricated shacks. By using a modular design, a simplified process and an efficient service and delivery, informal enterprises display competitive advantages to adapt to the hostile conditions of the low-cost housing market. The formal housing sector has much to learn from the informal strategies, logic and processes of the informal sector. This is rather an unusual technology transfer, but it is one that has the potential to reduce the ever-growing gap between demand and formal housing delivery in South Africa. Keywords: Informal Sector; Low-cost Housing; Prefabrication, Technology Transfer, Innovation. CIB World Building Congress 2007 2069 1. INTRODUCTION Since John Turner’s call for a better understanding of spontaneous settlements (in Housing as a verb, 1972) a number of authors have emphasized the role of the informal sector in the provision of housing for the urban poor. In doing so, authors like Kellett and Tipple (2000) or Bhatt and Rybczynski (2003) have highlighted the importance of a better understanding of the needs of the poorest sectors of the society and their own responses to them. Keivani and Werna (2001) and many others have developed the useful distinction between the conventional (formal) and the unconventional (informal) provision of shelter. According to Bhatt and Rybczynski (2003), the informal sector, which maximizes self-help and mutual aid building, has been virtually the only group that has had any success in providing appropriate, low cost solutions to the shelter problems of the urban poor. Estimates are that half of the population of developing countries is housed via informal processes of construction (Bhatt and Rybczynski, 2003). However, very little is still known about the way in which the informal housing sector operates in terms of its product and processes. Little is known -for example- about the way in which materials are sourced, delivered and transferred, about the real costs of construction or about the processes of building. It the effort to respond to the ever growing demand of urban housing, post-apartheid housing programs in South Africa have been largely dominated by a subsidized housing scheme. The current government policies contemplate two main possibilities for housing delivery: (i) subsidies that support self help construction such as that encouraged by the People Housing Process (PHP Policy Working Group, 2006); and (ii) project-linked subsidies where houses are built by a contractor formally employed by the provincial government or the municipality (Department of Housing, 2006). In reality, many PHP projects end up being built by formal contractors and despite the ‘soft’ advantages of PHP projects in capacity building, empowerment and community participation (PHP Policy Working Group, 2006), the second option remains the core of housing delivery in South Africa as is evidenced by projects such as the N2 Gateway in Cape Town. According to Napier (2005), “of the 1,6 million [post-apartheid] houses delivered by March 2004, some 72% were delivered through the project linked subsidy and another 10% through the consolidation subsidy”. The problem is that the policy requires contractors to: 1. Be registered in the National Home Builders Registration Council – NHBRC an organization that provides warranty protection to consumers (NHBRC, 2006) 2070 CIB World Building Congress 2007 2. Be registered in the Construction Industry Development Board – CIDB, an organization that registers contractors working for public projects (CIDB, 2004) 3. Follow the standards and specifications of performance defined by the Department of housing (2003). In specifying these criteria, informal contractors are largely excluded from the delivery of subsidized housing other than through the provision of labour as sub-contractors. However, the informal sector already plays a major role in the construction industry. It is difficult to estimate the number of informal construction enterprises in the country - some figures range from 2,500 to 40,000 (Merrifield, 2000). However, very little is known about how this informal housing stock is produced, delivered and marketed. This research seeks to provide a better understanding of the way in which the informal sector brings housing to the bottom poor in the South African city of Cape Town. 2. RESEARCH METHODS In order to understand the logic, processes and strategies of the informal sector, empirical research complemented by the review of literature in the field was undertaken. Informal housing solutions were studied in the following settlements of the Cape Town metropolitan area: a. Mitchell’s Plain b. Mfuleni c. Guguletu d. Wallacedene e. Khayelitsha Mitchell’s Plain, Mfuleni and Wallacedene are informal settlements that started as squatter camps in the periphery of the Cape Town urban area and that have recently benefited from infrastructure upgrading as part of the government-subsidized housing projects. These projects correspond to site-and-service schemes in with informal constructions have been built on serviced plots. Guguletu and Khayelitsha are well established and semi- consolidated areas of the first ring of townships in Cape Town. All of the settlements are located in historically marginalized areas that were designated as non-white areas during the apartheid regime. Interviews were held with residents and aerial photos, reports, drawings, pictures and articles about these settlements were analyzed. The patterns found in the informal solutions (in these five settlements) were then compared with formal subsidized housing projects conducted by NGOs in the Western Cape. These projects were used as a control group CIB World Building Congress 2007 2071 in order to identify the patterns that characterize (by contrast with the formal sector) the informal industry. The formal projects studied were: f. Netreg in Bonteheuwel: 192 subsidized units developed as a PHP project in 2006 by the Irish NGO The Niall Mellon Foundation, in partnership with the local NGO Development Action Group (DAG). Formal contractors were hired for the construction of the houses. g. Freedom Park in Mitchell’s Plain: under construction in 2006, this 488 unit project of subsidized housing is being conducted by the Niall Mellon Foundation and DAG. h. Mfuleni: more than 200 subsidized units developed as a PHP project. Under construction by the Niall Mellon Foundation and DAG, this project hires formal contractors for the construction of the houses. i. Wallacedene: More than 15 units built by Habitat International. A mix of sweat equity, contractors, hired construction workers and volunteers is used for the construction. j. Guguletu: More than 10 units under construction by Habitat International. A mix of sweat equity, contractors, hired construction workers and volunteers is used for the construction. Officers of the construction companies involved, the Niall Mellon Foundation, Habitat International and DAG were interviewed and, when appropriate - official reports were collected and analyzed. Plans of the houses and the settlements, aerial photos, press releases and pictures were also collected and analyzed. The research on informal settlements permitted the identification of an emerging - yet largely ignored in literature - industry of low-cost shelters. Discovering the importance of this industry in Cape Town showed also that it represents very well several of the competitive advantages that have been discovered in the informal sector. This study was then enlarged to examine it as a primary case study. Owners of two informal construction enterprises established in the townships of Khayelitsha and Mfuleni were interviewed; the authors studied their products and visited their “selling points”. This paper will refer to these two informal enterprises as “Khayelitsha Shacks” and “Township Shacks”. Finally, and following the case-study research method proposed by Robert Yin (1984), this study compared the patterns found in our studies with patterns found in previous research in order to obtain ‘analytical generalizations’. 3. RESEARCH RESULTS The level of affordability obtained by the informal and the formal sectors is different. Building the minimum product offered by the formal sector costs in the region of R40,000 which corresponds to the development of the site plus the subsidy for a top structure in 2006 (this excludes additional 2072 CIB World Building Congress 2007 administrative fees required for PHP projects). A study conducted by the
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