Presentation to AUHF AGM, Abuja, Nigeria

Affordable Housing Case Study

15th September 2016By

Simon Gusah MPIA, ANIAVisiting Researcher CSIS ABU Zaria

Ahmadu Bello UniversityCentre for Spatial Information Sciences

CSISDEVELOPMENT BANK

Presentation Content FRUGS KATSINA City-level Study

F I N A N C I N G F O R R E S I L IE NT & G R E E N U R B A N G L O B A L S O L U T I O N SDEVELOPMENT BANK

CONTENTS1. Background & Client Brief

2. Nigeria: Context & Problem-Opportunities

3. Methodological Approach

4. Katsina City: Study Area

5. Case Study: Kwado District Housing

6. Case Analysis: Proposed Innovations

7. Prototype Resilient Affordable Housing

8. Lessons Learned & Next Steps

Background & BriefFRUGS KATSINA City-level Study

OBJECTIVE: To identify investment needs for affordable housing and corresponding infrastructure and urban services, addressing low carbon and climate resilient development and recommend approaches and instruments for financing.

APPROACH:>> Investigate the financing needs & status for

housing and basic infrastructure.>> Review financial instruments and their

features for urban development.>> Assess the impacts of financial instruments

on a financial system level, particularly on the sustainability & resilience of the financial system.

>> Describe and explore new financial instruments and sources of funding and examine greater private sector participation in the financing and delivery of green and climate resilient urban development.

“the build-out of cities, particularly housing and urban

services, is increasingly

dependent on private developers

and private financing”

DEVELOPMENT BANK

CLIENT BRIEF:

Nigeria: Context & Problem-OpportunitiesFRUGS KATSINA City-level Study1. Demographic + Urban Expansion

Nigeria’s Population Doubles Approx. Every 25 Years, becomes more Urban, & relatively less Rural.

2. Global + Climate EconomicsCities must cope with challenges beyond their control, they must adapt to and embrace inevitable change.

Data Source: UN Department of Economic & Social Affairs, Population Division http://www.un.org/

Nigeria: Context & Problem-OpportunitiesFRUGS KATSINA City-level Study

Problematizing ‘Sustainable’ Development: New Model(s) NeededThe Global ‘North’ and ‘South’ both need a shift, to converge towards sustainable growth & consumption.SSA needs new models to drive transformative change towards the end goal of Sustainable Development.

GLOBAL ‘NORTH’‘Developed World’

GLOBAL ‘SOUTH’‘Developing World’

OVER-DEVELOPEDExcess Consumption

UNDER-DEVELOPEDLack of Basic Services

Reduce Global InequalityHow? “3L”* Growth?

“Steady-State” Economy?“Enough for everyone, forever”**

What?

Models

* 3L Principle: “Long-life, Loose-fit, Low Energy”. Alexander Gordon, 1972** Bension Varon, 1975

Methodological ApproachFRUGS KATSINA City-level Study

1. Observational• Not prescriptive – Jane Jacobsian Approach• JJ transformed urban planning, as a non

professional, by observing people’s use and behaviours in the city, “sidewalk ballet”

• Nigerians are very capable at producing afford-able housing (however poorly built)

Problems: Qualitative, not Quantitative Source: http://www.nesta.org.uk/

2. Inclusive• Informality per se is not a barrier• Multi-national corporations business

ecosystems span the entire economic spectrum from the capital markets to street-level traders & ‘informals’ (N100 recharge card sellers etc.)

• Commercial ecosystems and value chains embrace & integrate all participants profitably

Success = Inclusivity & Diversity Source: http://www.mtn-investor.com/

Methodological ApproachFRUGS KATSINA City-level Study

3. Pragmatic• Working within existing frames of reference/laws etc.

(i.e. Land Use Act, LG Act, Finance Frameworks)• Explore/exploit the current provisions and limitations,

build on existing platforms• Going with the grain of political-economic realities

Land Use Act (1978) is Cantankerous, but Useful

“Resilience is the capacity of a social-ecological system (SES) to absorb or

withstand perturbations and other stressors such that the system remains within the same regime, essentially maintaining its structure and functions. It describes the degree to which the system is capable of self-organization, learning and

adaptation.” Source: http://www.resalliance.org/index.php/resilience

4. Resilient• A Resilience Approach Embraces Challenges as

Change Opportunities• Economic, Climatic and Political Challenges can

Drive Reform Programmes & Innovation• In Nigeria the business-as-usual (BAU) model is

broken. The recession and economic challenges represent an opportunity to drive change.

Resilience: Change, Adapt, Diversify

Katsina City-Study ContextKATSINA State, Nigeria

N

Katsina State

KATSINA STATE: north-west region of Nigeria, lies in the Sub-Saharan, Sahel Savannah region of West Africa, with 90-100 Days of Growing Period (DGP) per annum (UN FAO).

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910

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0 0.5 1 2 3 5Km N

GabasArewa

KuduYamma

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1978 urban footprint – 958 Ha(Pop. Est +100,000, Max Lock, 1978)

2005 urban footprint – 2,897 Ha(Pop. Est +300,000, Census, 2006)

2015 urban footprint – 4,959 Ha(Pop. Est. +500,000, Projected)

~400% Growth Urban Footprint & Pop. in 40 yrs.

LEGEND1. Emir’s Palace2. Kofar Sabuwa City Gate3. Kofar Yandoka City Gate4. Kofar Guga City Gate5. Kofar Waziri City Gate6. Kofar Sauri City Gate7. Kofar Durbi City Gate8. Kofar Marusa City Gate9. Kofar Kaura City Gate10. Kofar Kwaya City Gate11. Katsina Airport12. New Government House13. GRA (Govt Reserved Area)14. Katsina State Secretariat

Old City Ward Boundaries;Arewa – North, Kudu – South, Gabas – East, Yamma – West

Katsina City: Study ContextKatsina City: Initial SWOT Analysis (I)

STRENGTHSS1: Excellent Basic City Road Network

Katsina City has unusually well developed roads S2: Manageable Katsina State Debt Burden

State history of fiscal prudence, living within meansS3: Cohesiveness, High Social Capital

Emirate, Traditional & Social Structure is strong

WEAKNESSESW1: Slow Local Economy (Micro Trading)

Few formal/industrial jobs, many small-scale/MSME*W2: Poor Power & Energy (Cooking) Supply

Chronic power shortages, fuel-wood dependenceW3: Unplanned, Informal Sprawl

Urban investment not keeping pace with population[*MSME – Micro, Small & Medium Enterprises]

OPPORTUNITIESOp1: 1 No. Prime Local Government for City

City has 1 Main LGA + 4 in Secondary/metro areaOp2: 5-Year Development Plan in Place

Katsina State has a 5-Year MTEF* (2016-2020)Op3: Active Informal Property Market

Local builders can deliver homes affordably

[*MTEF – Medium-Term Expenditure Framework, a 5-year budget, the ‘Katsina Restoration Development Plan’]

Opportunity-Strength Strategies(Use Strengths to take advantage of Opportunities)

S1-Op1: Joint Maintenance & PlanningState & LGA can form Joint City Planning Forum

S2-Op2: Investment PlatformFiscal prudence attractive to potential investors

S3-Op3: Engagement/Innovation in LED*Community Engagement & Mobilization possible

[*LED – Local Economic Development]

Opportunity-Weakness Strategies(Use Opportunities to off-set Weaknesses)

Op1-W1: LG Market Management PlanLGs can support State on markets and SWM*

Op2-W2: Power/Energy Sector Strategy‘Village’ Solar Off-grid Investment Plan

Op3-W3: Formalisation/RegularizationUpscale activities of informal developers

[*Markets & SWM are LG responsibility but done by State]

THREATST1: Population Growth & Ecological Stress

Pressure on local forests and ecosystems resourcesT2: Sewage Infrastructure Gap

Very poor sewage & waste water management services. No city sewage treatment plant.

T3: Long-term Unemployment/JobsChronic unemployment situation. Intergenerationalfamily poverty & cross-border migration from Niger..

Threat-Strength Strategies(Use Strengths to avoid Threats)

T1-S1: Urban Boundary/Control Sprawl Impact Use Outer Ring-Road as an Urban Boundary

T2-S2: WAT-SAN PPP/InvestmentAjiwa Dam upgrade needs Sewage equivalent

T3-S3: Labour-intensive Job StrategyUse local and family networks for labour-intensive local projects to ‘mop up’ unemployed

Threat-Weakness Strategies(Minimize Weaknesses & avoid Threats)

T1-W3: Contain Sprawl, Intensify DevelopmentIncrease urban planning & monitoring capacity

T2-W2: Sustainable Sewage Treatment PlanDesign low-power, low-water sewage strategy

T3-W1: Skills/Education StrategyUp-skilling and training programme, introduce basic technology, improved business systems

Katsina City: Study ContextKatsina City: Initial SWOT Analysis (II)SWOT Notes & Photos from Scoping Visit 21st-24th June, 2016:

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Photo Notes1. An informally built, affordable

housing layout in Kwado area.2. Formally built, traditional-style.3. Houses built on a flood-plain.

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Katsina City: Study ContextKatsina City: Initial SWOT Analysis (III)SWOT Notes & Photos from Scoping Visit 21st-24th June, 2016:

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Photo Notes4. Friday Market, Emir’s palace.5. Low-income households depend

on scarce firewood for cooking. 5

Affordable Housing in KatsinaLand Market Survey Initial FindingsA Sampling1 of Katsina Land Sales Data b/w 2008-2016:

1. Based on sales data provided by Local Land Dealers (‘Dillalai’), Members of the trade association of Land Dealers, for four areas of Katsina city; i) Modoji, ii) Modoji/Shinkafi, iii) Sabon Gida, and iv) Kwado in the city-level study.*Sales prices adjusted using Purchasing Price Parity Data http://data.worldbank.org/

Affordable Housing in KatsinaCase Study: Kwado (Informal) District2BR Unit in Kwado District, KatsinaKwado is part of the spontaneous urban expansion of Katsina, but it is not insurmountably problematic. Urban & Regional Planning Board (URPB) has already reached out to the drivers of the local housing market; Land Dealers (Dillalai) & Local Housebuilders.Even in the midst of the informality, there is evidence of refreshing innovations and signs of progress being made.Kwado (unplanned) District Typical Housing Unit CostsLand: 40’ x 22’ (12m x 6.6m) – N400, 000 ($1,100)Construction Cost: (approx.) – N900, 000 ($2,500) .

TOTAL – N1, 300, 000 ($3,600)Sales Price (No borehole) - N1, 700, 000 ($4,700)Gross Profit Margin (30%) - N400, 000 ($1,100)Sales Price (+ borehole) - N1, 850, 000 ($5,300)Construction Timeline: 1 month

[US Dollar:naira Xchange Rate $1:N350]

Narrow Street Layout

Vertical‘SepticTank’

TiledFloor Finish

&PVC

Ceiling

Security &Privacy –CulturallyDesirable

Compact Street LayoutGood use of Scarce

Resource - Land

KitchenNo

Window

Kwado ‘Traffic Light’ CritiqueRed Light Issues (High –ve Impact)

1. Unplanned Street Layout; too narrow2. Lack of household electricity & cooking

fuel (Power & Energy)3. Lack of adequate sewage/sanitation &

SWM servicesYellow Light (Med –ve Impact)

1. Poor cooling & cross-ventilation in units2. No formal tenure (de facto ‘paper’ only)3. Poor Water Supply; vendors only4. No road/drainage infrastructure5. Poor building standards/regulations6. No mixed-use planning

Green Light Issues (Neutral or +ve Impacts)1. Local, market-based housing (no State subsidy) 2. Compact, space-saving designs3. A potentially ‘bankable’ business model4. Appropriate tech for local skill-base5. Scope for improvement/upgrading to

Green/Resilient affordable housing6. Scope to turn all –ves into +ves7. Designs reflect local cultural values (privacy)Kwado represents ordinary people’s efforts to resolve affordable housing challenges. The solutions aren’t ‘perfect’ but provide a starting point to seek resilient, sustainable innovations.

Design motifs reflect Local architecturalAnd urban heritage

Affordable Housing in KatsinaCase Study: Kwado (Informal) District

Case Study: Local Business Model• SMALL SCALE

Individual, local, small-scale (artisanal) builders, handling small volumes (<5 units at a time)

• NON-DOCUMENTED (‘Informal’)No formal planning, design, financing or marketing. All arrangements thru personal relationships and contacts.

• NO SUBSIDY, MARKET-DRIVENBuilders do both speculative and bespoke units for clients, based on prevailing demand/market.

• SHARED-RISK/REWARDBuilders take short-term loans from money-lenders, based loosely on Islamic banking model, where borrower and lender enter a shared-risk/shared-equity arrangement. After sale of the unit(s) the lender and builder share the profit in a pre-agreed formula.

Affordable Housing in KatsinaCase Study: Kwado (Informal) District

Case Study: Local Land Tenure Model• SELF-REGULATED & LEGITIMIZED

System of land tenure and management of land and property market operates is out of sight of the State.

• FIRST SALE: CHIEF MEDIATEDFirst sale by the original owner (usually a farmer) is mediated, authorized by a Mai Unguwa, or Ward Head.

• RE-SALE: LOCALLY WITNESSEDSubsequent re-sale is between buyer and seller in the presence of a witness and the original Mai Unguwa endorsed ‘paper’ is passed to the new owner.

• STATE ROLE: VERY LIMITEDThe government’s only role in these processes (if any) is to issue building permits, based on the Sales Agreement.

• SPONTANEOUSLY PLANNEDInformal layouts not surveyed or set out - problematic; narrow streets, no set backs for infrastructure or services and lacking effective development control.

“In order for an Islamic bank to earn a return on money lent, it is necessary to obtain an equity, or ownership, interest in a non-monetary asset. This requires the lender to also participate in the sharing of risk”.

Source: http://www.islamic-banking.com/prohibition_of_interest.aspx

“Land tenure should primarily be viewed as a social relation involving a complex set of rules that affects the way that land is owned and used”.

Source: Payne. Durand-Lasserve. 2008

Case Study Analysis (I)Proposed Climate-Resilience Innovations

‘Affordable’ Cost : Target sales price of the units is $10,000, with financing, over 20 years.

Solar PV Home System, for day + night lighting, cooling and socialising. Off-Grid Power :

Household Energy (Fuel) : Sustainably-sourced firewood, from farmed forests.

Space-saving Vertical Septic Tanks system: faecal sludge treatment (FST). Sewage Treatment :

Small Footprint/Land Take : 2BR Units on 90m2 plots, minimizing cost, compact designs.

Compact, mutually shaded layout, with vehicle circulation. Compact, Shaded Layout :

Insulated Roofing & Walls: Foam-insulated roofing sheets, mud-filled cement block walls

Courtyard, dormer window, solar chimneys, roof vents. Passive Vent, Solar Chimneys :

High-quality Design & Spec: Improve standards of engineering & urban design/planning.

Local materials, methods, craftsmen & cultural values. Local & Appropriate Tech :

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Sitting Room

WC/Shower

VisitorsWC

Bedroom 1

MainEntryGate

FootEntryGate

Bedroom 2

WC/Shower

OpenReception

Area

Fam

ilyCo

urty

ard

(voi

d ov

er)

Drive-inCourtyard(void over)

Floor Layout Roof Profile

Utility/Storage

Area

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6m 6m

6m

30m

15m

2BR Prototype Units on 6m x 15m Plots[90m2 plots, 5 Nos. per Standard 15m x 30m, 450m2 plot area]

Kwado 2BR Unit Comparison [80m2 Plot]

15m x 30m Equivalent Standard Plot Size

Kitc

hen

Prototype Design: Climate Resilient Affordable Housing

An Example of Prime, ‘Narrow-Plot’ Housing: South Melbourne, Australia

Prototype Design: Climate Resilient Affordable Housing

Source: http://www.realestate.com.au/

0 1 2 3 5m8m

18m

Area Median 3Br Property Value: $1.4m (AUD)

MainEntryGate

FootEntryGate

Sitting Room2.85x3.1

WC/Shower

1.35x1.8

VisitorsWC

0.8x1.8

Bedroom 12.4x4.1

Bedroom 22.85x3.1

WC/Shower1x2.3

OpenReception

Area2.35x1.8

FamilyCourtyard(void over)

Drive-inCourtyard(void over)

6m

2BR Prototype Unit SOLAR POWERED FITTINGS

Kitchen2.85x1.3

Unit abuts neighbouring units on 3 sides

Utility/Storage

Area

Fr

TV

15m

Electrical (solar-powered) fittings13A plug socket (6 Nos)Light Bulb (10 Nos)

Ceiling Fan (4 Nos)

0 1 2 3 5m

Fr Fridge (1 Nos)

TV TV+DSTV (1 Nos)

Solar Power-load EstimateAppliance Nos Rating Hours Load (Wh/Day)1. LED Light 10 8W 6 4802. Ext LED Light 3 6W 10 1803. Fridge 1 80W 12 9604. TV + DSTV 1 200W 4 8005. Ceiling Fan 2 75W 10 1,5006. Ph. Charger 2 20W 2 80 .

TOTAL: 4.0 kWh/DayPeak Power: 568 W

Solar PV + Components ListAutonomy (battery only): 8 hoursInverter Size: 1,000WBattery Depth of Charge: 40%Battery Voltage: 24VBattery Bank size: 1 x 139A.hTotal Batteries Required: 2 x 12V/180A.hSolar Panels: 250W x 3 NosMPPT Regulator: 1 No. of 70A+Fixtures and InstallationsAPPROX Cost: $3,000 (incl. labour)

External Light (3 Nos)

Source: http://www.solarpanel.co.za/solar-calculator.html (Thanks to Dr Gawie Van Der Merwe!)

Prototype Design: Climate Resilient Affordable Housing

2BR Prototype Unit: AIR CIRCULATION, NATURAL LIGHT & PASSIVE VENTILATION Plan

0 1 2 3 5m

Dormer Window: Brings in natural light,and exhausts hot air.

Wall exhaust vent to solar chimney

Solar chimney exhaust

Open inner courtyard draws in cool air& natural light around circulation space

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Section A-A

Air Circulation/Ventilation Space

Air Circulation, Natural Light & VentilationNatural lighting and passive ventilation in the small, restricted spaces of the units promoted using a number of devices, including;A. Inner Open Courtyard/Family SpaceB. Dormer WindowsC. Solar ChimneysD. Foam-insulated Roofing SheetsE. Mud-filled Block walls (thermal mass)F. Earth-coupled FlooringG. Internal vents, high & low-level louvered openingsElectro-Mechanical systems (solar powered fans), but the unit is not dependent on active cooling & ventilation.

COOL AIRIN

HOT AIROUT

Courtyard &Passage

Bedroom 2(Off Parlour)

Floor Plan

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B

C

D

E

F

G

Prototype Design: Climate Resilient Affordable Housing

0 1 2 3 5m

0 1 2 3 5m

6m

15m

ROOF PLAN/ Solar Panel Array & Other Climate Resilience Features

Unit abuts neighbouring units on 3 sides

DormerWindow/Roof Light

& Vent

Solar PV Array

Vertical Septic Tank Natural Light & Passive Ventilation

Small Footprint, Compact Layout

Insulated RoofMud-Filled Cement Block Walls

Rainwater Harvesting

DormerWindow/Roof Light

& Vent

Vents/Solar Chimneys

Prototype Design: Climate Resilient Affordable Housing

Prototype Design: Climate Resilient Affordable Housing

2BR Unit Cost Profiles; ‘Case’, ‘Base’ & ‘Plus’2BR Kwado Affordable Housing Units2BR Unit Costs: i) Kwado-Case Unit ii) Kwado-Base Unit iii) Kwado-Plus Unit

i) Land: (80m2) N 400k ($1,100) (90m2) N 450k ($1,280) N 450k ($1,280)

ii) Construction: N 900k ($2,500) N1,050k ($3,000) N1, 800k ($5,000)

iii) ‘Formalization’*: -NIL- N 150k ($430) N 150k ($430) iv) Solar Fitout etc: -NIL- -NIL- N1, 050 ($3,000) TOTAL Cost (000’s): N1, 300k ($3,600) N1,650k ($4,700) N3, 450k ($9,860) Sales Price: N1, 700k ($4,700) N2,145k ($6,130) N4, 485k ($12,814)

Gross Profit (30%): N 400k ($1,100) N 495k ($1,330) N1, 035k ($3,104)

Delivery Timeline: 1 month 2 months 3 months

[US Dollar:naira Xchange Rate $1:N350]*’Formalization’ includes: Surveying, CofO, Land Registration & other costs.

CASEUNIT

BASEUNIT

PLUSUNIT

Lessons & Next StepsResilient Finance: Change Adapt Diversify

Source: http://www.123rf.com/4x4

AFRICA HOUSING FINANCE BRICOLAGECreativity, Resourcefulness & Using the available Tools, Resources, Frameworks. i.e. NOT waiting for ‘Perfect Conditions’.

AN AFRICAN 4x4 MORTGAGE MODELDon’t expect or try to build a sleek, high-performance ‘Porsche’ mortgage model. Build a rugged, African 4x4 housing finance framework.

NO SUBSIDIES PLEASE, WE’RE AFRICANAfrica can take the lead on the drive towards sustainable development, but only if we live within our means. We must learn to DO MORE, WITH LESS.

1) The 4P Model: Public, Private, People, Partnerships

Lessons & Next StepsResilient Finance: Change Adapt Diversify2) Making Nigerian ‘Land Use Act Lemonade’ (when life gives you lemons…)

A GOVERNOR-CENTRIC MODELThe LUA vest all powers over land in the hands of State Governors. The upside is that they have the power to create a bankable housing model at State-level.

TRANSFERABLE ‘CofO’sLUA requires Governor sign-off on all land transactions and transfers. This can be built in to the Grant of Title, by the creation of so-called ‘Transferable CofO’

‘APOA’: Advanced Power of Attorney (Nohn & Bhatt, 2014 (http://wiego.org). By signing off on an APOA as part of the lending process, the absence of an effective foreclosure law is by-passed.

Lessons & Next StepsResilient Finance: Change Adapt Diversify

DURABLE:MATERIALS & TECHNOLOGIESCement block based house building materials and methods remain the most accessible and readily available materials and technologies.

SALABLE: DEMAND-DRIVENFollow the Informals, follow the market. ‘Catch people doing something right’. Aformal approach, based on a stable informal platform will be stable also.

RECOVERABLE: LEGALITY & LEGITIMACYLegality is established by acts of law. Legitimacy is culturally derived. Together they form the two sides of the structure-agency coin (Giddens, 1984).

3) BANKABILITY 101: DURABILITY, SALABILITY, RECOVERABILITY

Lessons & Next StepsResilient Finance: Change Adapt Diversify

STAGE I: Prototype/Marketing SuiteA single unit can be delivered in less than 3 months, for <$10,000 (+ R&D and Overhead Costs). This unit will serve as the Proof-of-Concept.

STAGE II: Pilot Project – 100 UnitsBased on off-taker demand, a small estate can be built by local artisans under supervision, in 6 months to 1 year.

STAGE III: Full Roll-Out StrategyA ‘4P’ SPV involving a private sector entity, the State Government and local community (traditional) leadership will drive the full roll-out strategy.

4) VALUE PROPOSITION: The Pitch

Insert movie here…

Financing for Resilient & Green Urban Global Solutions

Simon GusahVisiting Researcher, CSIS ABU Zaria

Simon.gusah@urbanbaseconsulting.com +234 803053 6818

F I N A N C I N G F O R R E S I L IE NT & G R E E N U R B A N G L O B A L S O L U T I O N SDEVELOPMENT BANK