CHAPTER TWO

LITERATURE REVIEW

Introduction

The researcher on this chapter will be looking at the contribution of other scholars on the

subject under study. This chapter will give an account of what have been published on this

topic by accredited scholars and researchers. Many scholars have written different articles

and come up with different opinions and views on the effectiveness of housing cooperatives

specifically in Harare. This chapter will reveal the related literature to the study with the view

to provide an analytic insight into the research problem. The research done so far among

others which will be the major points of this chapter will include.

Conceptual Framework

Conceptual definition of modes of housing provision

Systems or modes of housing provision can be defined by the processes through which such

provision is achieved. A useful analytical tool for identifying and examining these processes

is the concept of structures of provision which is based on the identification of social

relations and interactions of agents involved in all aspects of housing provision. The key to

understanding the processes involved in land and property development, including housing, is

identified as the relationship between the interests, strategies and actions of agents involved

in land development and the socioeconomic and political framework including values

regarding land, property, buildings and the environment which governs or structures their

decisions. There is, therefore, a need to understand the `relation between structure, in terms of

what drives the development process and produces distinctive patterns in particular periods,

and agency, in terms of the way individual agents develop and pursue their strategies' (Healey
and Barret, 1990:90). The former relates to the framework created by the economic and

political organisation of the country, interventions of the state at the macro and micro

economic levels and the social and economic values of the society regarding the built

environment. The latter, on the other hand, relates to land owners, investors, developers,

consultants, public sector planning officers, politicians, community groups and any other

agents involved in land development (Keivani and Werna 2001:69). The buying of land from

the original owner at minimum possible prices and, secondly, the successful development of

land for housing at the right time and right place maximises the development value of the

site. Therefore, housing production by firms is entirely reliant on the overall speculative

strategy of the firm and not the housing shortage in the country.

Developments in the Zimbabwean Real Estate Land Development Industry

In Zimbabwe, Section 22 of the Regional, Town and Country Planning (RTCP) Act (Chapter

29:12) of 1996 succinctly asserts that the real estate development is the altering of the

character of the use of any land or building, whether fixed, movable or collapsible

(Government of Zimbabwe, 1996). Players in the real estate development in Zimbabwe can

be broadly viewed as public agencies and private sector agencies. Public agencies include the

Environmental Management Agency (EMA), Department of Physical Planning (DPP), the

Deeds Registry Office, and the Department of Surveyor General’s Office. The private sector

has been much involved in the development process as developers, financiers, and entities on

property valuation and management. As the real estate development is considered a lucrative

business local individuals are engaging themselves with the sector, and thus making it a

competitive terrain. In addition, there are service providers (for example, the Zimbabwe

Electricity Supply Authority), financial institutions (these include commercial banks,

building societies, insurance and pension funds companies), and landowners, building
contractors as well a number of professionals such as spatial planners, architects, and

engineers. “There is a lack by the service provision agencies to increase supply and be able to

meet the existing high demand for infrastructure facilities” Real estate development plays a

pivotal role in the growth of macro economies worldwide. Although numerous public

housing programs were undertaken in Zimbabwe, the housing deficit in the country has never

been significantly reduced (Rahimian, Goulding, Akintoye & Kolo, 2017). Real estate

development is widely regarded as a creative process focused on value added (Mustorpha et

al., 2019; Olsson et al., 2015) and it occurs when land utilization is changed from one type to

another (Mustorpha et al., 2019).

National Housing Policy of Zimbabwe

From 1980, Zimbabwe has removed the majority of structural factors constraining access to

decent and affordable housing. The country’s cumulative experience in terms of enacting

laws, establishing institutions and implementing different programs has created the basis for

an inclusive national housing policy. The 2011 National Housing Policy is deemed “The

Housing Stakeholders’ Policy” because it culminates from an intensive consultative process

that commenced with meetings with stakeholders from February 2009 to May 2009 and the

housing symposium held at the end of May 2009 to map up critical areas of need and draw up

a plan of action for the National Housing Convention which was held in October 2009 to

formulate a National plan of action on housing development NHP of Zimbabwe (2011). This

policy has encompassed quiet a number of actors and interest groups which includes building

societies, pensions and provident funds, private land developers and employers have an

important and indispensable role to play in the proposed housing dispensation. Its main

agenda being provide safe and sane housing for Zimbabwe families proper decent housing is

a human right (second generation/progressive rights) that every citizen should enjoy i.e. ‘the

right to shelter’ according to United Nations Human Rights Commission (UNHCR). The
problems addressed by the policy mainly are as follows; Lack of policy coherence regarding

rural-urban integration, Inadequate investment by both the public and private sector in the

housing sector, Lack of policies to enable effective participation of other actors in housing

development, Lack of institutional capacity at all levels to implement housing projects,

Unreliable supply of affordable building materials, and Bottlenecks in the land delivery

process. The ministry of Housing and Social amenities is the one in change of monitoring the

policy Simmons (2003).

Housing Situation in Zimbabwe

Zimbabwe stands as one of the Sub-Saharan African countries with highest property prices. A

report by Cardinal Corporation (2018) reveals that development costs, construction costs and

government taxes and fees are contributors to exorbitant property prices in Zimbabwe.

Nevertheless, it has been reported that demand for properties continue to rise as individuals

and companies seek to hedge their investments against spiralling inflation (Tome, 2020).

Tome (2020) observes that as inflation reached 500% in Zimbabwe as of early 2020,

individuals with huge sums of money have been compelled to invest it in property so as to

safeguard the value of their money. Nevertheless, it has been reported that demand for

properties continue to rise as individuals and companies seek to hedge their investments

against spiraling inflation (Tome, 2020). This has created a mismatch between supply and

demand of properties. This mismatch is partly exacerbated by poor performance of real estate

development finance. This include the non-availability of funds and bureaucratic bottlenecks

in many of the financial institutions which obstruct in their quest for funds (Chirisa et al.,

2019). With the current cash crunch in the country, it is difficult to get cash from the banks

for development and as such giving bottlenecks on the developers’ intended projects (Chirisa

et al., 2019). The liquidity crisis in Zimbabwe since 2008 has starved many property
development projects from investment and left various opportunities in this sector untapped

(Maphosa et al., 2019).

Challenges to Public Housing Delivery in Zimbabwe

Most real estate developers find it difficult to raise the capital needed to initiate and complete

any residential development, and so must borrow from banks and other financial institutions

(Owusu-Ansah, Soyeh and Asabere 2019). Government and professional associations have

made significant progress in reducing the housing deficit in Zimbabwe. Adequate financing is

deemed crucial in the delivery of housing projects. Being that one of the responsibilities of

the government is to provide acceptable housing for its citizens, adequately catering for this

within the budget is necessary. However, findings of this study show that the allocations

made available in the budget for providing housing infrastructure for citizens are inadequate.

This inadequacy can be attributed to the unstable nature of the Zimbabwe economy with

inflation rate getting to above 14% and the budget deficit 12% of gross domestic product

(Hawkins and Piling, 2017). Investors and lenders prefer an economy that is stable for

investment and decisions can be taken without too much uncertainty. This is not the case with

Zimbabwe as the uncertainty in the country’s economy makes it difficult for investors and

lenders to invest. Findings of this study are in tandem with the submission of Taruvinga and

Mooya (2016) which revealed that the main reason for the shortfall in provision of low-

income housing by the government in most developing countries is due to large economic

constrictions and also unrealistic budgets that cannot be maintained.

Perspectives on Project Success in Real Estate Development

According to Udechukwu and Olusola (2016), real estate can be defined as the earth’s surface

which extends downward to the center of the earth and upward to infinity, they include those

things that are permanently attached by nature or by people. A real estate project is
considered successful when it passes four success test criteria; when it is completed within

specified time, cost, quality specified standards and client’s satisfaction met (Ifediora et al

2019:75). Nzekwe, et al, (2015) however posed at pertinent question which is; can a project

which conformed to time and cost projections be adjudged as successful even when it has

been poorly received by the client? Whichever way we see real estate project success, our

concern should be to ensure that projects succeed, this must be done by identifying the factors

that constraints its implementation success and also find out the extent they affect success in

a bid to making sure subsequent or anticipated failures is brought to barest minimum.

Globalization has resulted in corporate real estate management becoming a source of

competition both locally and internationally. However, such exposure comes with a price.

Role of Real Estate Developers in Housing

The job of the real estate developers is to acquire land, develop it and then sell them or put

them on lease/rent. The Real Estate Developers are also responsible for marketing of

properties and lease and re lease of buildings and land as stands. The Real Estate Developers

need to get public approval for all the jobs they do. They mostly coordinate with engineers,

city planners, contractors, architects and surveyors to ensure perfect planning and execution

of a property development project. the role of private real estate development companies who

build for profit has become increasingly important in Zimbabwe’s housing supply. Before

any housing development can take place in a market economy, real estate developers must

consider a broad range of factors, both market and institutional. Among the market factors are

construction costs, cost and availability of financing, current and future house prices and the

level of market demand on completion, which is determined by time on the market, interest

rate, GDP per capita, unemployment rate and inflation rate (Hutchison and Disberry, 2015;

Owusu-Ansah, 2014). Within each context real estate development is concerned with

innovations, such as introducing new forms of development finance, setting up new types of
development partnerships, or incorporating sustainable solutions within development

processes.

Theoretical framework

Neoliberalism theory

Neoliberalism is an ideology and policy model that emphasizes the value of free market

competition. Although there is considerable debate as to the defining features of neoliberal

thought and practice, it is most commonly associated with laissez-faire economics. Globally,

the rolling out of neoliberal policies has led to a plethora of harmful socioeconomic

consequences, including increased poverty, unemployment, and deterioration of income

distribution (Rotarou and Sakellariou 2017Collins et al. 2015). Therefore this provides

justification for private sector intervention in the economy by playing a part in the provision

of housing. In land development there has been monopoly of government over land

ownership and it has failed to develop it distribute it to citizens so that everyone has

affordable housing. Using the ideas of neoliberalism private sector can operate in a free

market economy and has come in place using their privately owned land to redistribute it

through subdivisions thereby covering the housing gap in the country.

Hartmann (2016:2145) states that “neoliberalism typically refers to minimal government

intervention, laissez-faire market policies, and individualism over collectivism which has

been adopted by and pressed upon the majority of national governments and global

development institution; However, (Garnham (2017) argues that decreasing public spending

and government involvement in the welfare of people through the rhetoric of choice and

freedom has a harmful impact on people’s wellbeing. The biggest conceptual challenge is that

neoliberal ideology adopts the language of freedom and choice, increased foreign

investments, and open markets and trade to progress policies that lead to privatisation of
basic needs such as education, healthcare, water, electricity and housing. The rich can often

afford these services and can compete fairly in the free market, but the poor unable to afford

health care, education or decent housing are left marginalized.

Empirical Review

Real estate land development in Zambia

Currently like any other urbanizing country, the Zambian housing sector is experiencing

challenges of shortages in decent and affordable housing and the growth of unplanned

settlements. These shortages are mostly attributed to inefficiencies of the housing market to

meet the housing demand, lack of sustainable housing finance and population increase.

According to a study conducted by Zambia Institute of Policy Analysis and Research

(ZIPAR) in 2014, Zambia has a housing stock of 2,500,000 units and an annual housing

production of 73,000 units which is below the expected annual production of 222,000 units

per year. The current housing production has lead to a housing deficit of 1,539,000 as at 2014

and failure to increase housing production might lead into a deficit of 3,328,904 units by

2030. This housing shortage especially in urban areas over the years has been worsened due

to the post-independence rural-urban migration. According to the Central Statistics Office,

Zambia's population in urban areas has over the recent years increased drastically from

3.4million people in 2000 to 6.7milion in 2016. This growth shows a 41% increase in the

urban population. In urban areas the hindering factors to housing development include,

limited capacity of sustainable public-private partnerships to deliver affordable housing,

prohibitive land prices and lack of financing mechanisms. These challenges are more

pronounced among the low income urban households, con-straining them from formal

ownership of decent housing (Nyemba, E,N and Deka, B 2018:8). The housing development

policy environment in Zambia is still in its infancy stage with most of its legislation under

review or recently implemented. Zambia has over the years developed policies and Acts to
foster the development and supply of low cost affordable housing for its population

especially in urban areas but these policies have yielded little results due to high land prices

and costly building materials. The following are among legislation that supports the housing

sector in Zambia; Housing Policy, Urban and Regional Planning Act, Legislation on Land, as

well as the establishment of National Housing Authority (NHA). According to Nyemba E, S

and Deka, B (2018:11) in 2015, the review of the policy began with expectations that the new

policy would be a better blue print for housing development and responsive to challenges of

access to land, housing finance, social services and technological options that have for a long

time been hindering the housing sector from functioning effectively. Secondly, the reviewed

policy would further enhance the creation of an environment that is suitable for the

participation of both the public and private sector in the provision of affordable housing. The

emergence of real estate agents in the Zambian property market has led to distortions in the

markets such as lack of general organisation in the sector. These distortions have been

worsened by the withdrawal of local authorities’ role in the determination of rentals ever

since the government sold all the state-owned houses to sitting tenants and the lack of

inclusive financial instruments such as mortgages for purchasing properties such as housing

and land. Nyemba, E,N and Deka, B (2018:15) noted that the existing free market policies in

the country has led to property buyers lacking some form of protection against exploitation

from both sellers and agents in the real estate market. With such distortions, there is need for

regulations in the fledging market.

Real Estate Land Development in South Africa

The post-apartheid government has made strides in promoting social development, having

started with promulgating the Reconstruction and Development Programme (RDP), which is

aimed at promoting economic growth and eradicating poverty, exclusion and inequality

(Noyoo 2005; Patel 1991; 2005). Despite the RDP housing initiative, it is argued that the
human rights prospects of the homeless and the informal settlements dwellers have not been

adequately met in line with expectations (Rust, Tanya, and Napier 2009). In its endeavor to

redress the housing shortage and socio-economic rights deficits for the poor citizens (Rust,

Tanya, and Napier 2009), the government initiated the RDP programme to roll out subsidised

housing to the largely black majority citizens. As already alluded to, this housing program

was informed by the Constitution and the RDP policy. The housing backlog reportedly

stands at 2.3 million houses and is growing by around 178 000 houses a year. Neither the

public nor the formal private sector appears to be able to close this gap. Municipalities ensure

that, within the framework of national and provincial legislation and policy constituents

within their jurisdictional areas have access to adequate housing. They initiate, plan, co-

ordinate and facilitate appropriate housing development within their boundaries, either by

promoting developers to undertake projects or by playing the role of developer. In South

Africa agricultural land cannot be subdivided into residential stands thus real estate

developers in South Africa have to acquire land through municipalities or other private land

that is not intended for agriculture. Despite this proven demand for housing township

developers often struggle to obtain finance for their developments. The building plan

approval process can be lengthy, and they often borrow money from family and friends to

finish their developments. Most take out a personal loan from a bank at some point, but as

first instalments are usually due after 30 days and it can take up to three months before

tenants are able to move in this is not an ideal solution. Noyoo and Sobantu (2017) argue that

housing delivery hugely contributes towards social development hence it should always be

viewed from the rights-based perspective in order to promote equality, social justice, human

rights and dignity.

Some scholars failed to recognize that most real estate land developers and local authorities

are no longer playing their roles of providing affordable housing to the citizens because of the

challenges that they are encountering during the process such as slow approval of subdivision

permits and too much beauractratic procedures in the land development process. Almost all

local authorities in Zimbabwe in the present day are failing to provide serviced land and

housing for their citizens and this has been a challenge that many scholars who have failed to

recognize it. Real estate land developers in Zimbabwe are facing internal problems like

corruption, abuse of funds and fraud as there have been many cases of land barons robbing of

citizens their hard earned money which has made citizens fear engaging them. This study

complements other studies and it focuses on key on housing issues in which most scholars are

interested in this modern world.

Chapter Summary

The researcher on this chapter was assessing other scholarly views on the role being played

by real estate land developers in provision of housing. From this chapter the researcher can

note some of the gaps that had been left by other researchers. This chapter provided the

theoretical framework supporting the variable under study and the neoliberalism theory was

used. It also gave a look into the situation of Zambia and South Africa on the housing issue in

relation to real estate land developers. This chapter therefore managed to discover the

literature gap.