Modelling the Determinants of Housing Construction Costs in Tanzania in Determining Affordability

Abstract

In this study, simulation models have been used to determine how low-income households can have affordable and adequate housing by integrating housing processes and delivery methods. The purpose of this research was to look at how housing can be made affordable to low-income earners. The researcher has used simulation models in the three major components of housing, which are: access to land, infrastructure and services, building materials and affordability in terms of finance. The main objective of the study was to advance housing provision for low-income households by determining affordability using simulation models. Specific objectives were to examine: (i) the housing production process and factors that influence affordability, (ii) to develop cost simulation model and do simulations to establish ways and means of making housing affordable to income levels and (iii) to recommend measures for enhancing affordability to low-income earners. As this research is mostly based on simulation models, limited data is needed to enable models be developed. Major types of data source were used, namely documentary information (basic information) and interviews. A major finding from this study is that if the cost of land is high, it can be reduced to enhance affordability. In housing design, cheaper alternative materials with same satisfactory performance are available and can be used to cutdown costs. It has also been established that the configuration of a house influences its cost. Consideration should be given to increased depth of the building more than the width for an affordable house. This is in relation to the cost of infrastructure. Housing financing options available are own financing, loan (mortgage loan) and rent. It has also been confirmed that two models namely Save and Build (SB) and Save, Build and Borrow (SBB) models take long time for the house to be completed while the Save, Build, Rent and Build (SBRB) Model and Save, Borrow, Build, Rent and Build Model (SBBRB) have taken shorter periods of time. Basing on these findings the study advances the following three recommendations. Firstly, builders are to avoid very irregular (complex) designs to save on external walls. Secondly, construction aspects with limited finance, incremental construction of room-by-room should be followed rather than full foundation and then room-by room. Thirdly, if room-by-room construction is opted for, it is advisable to combine saving, renting and borrowing, step by step as source of finance. These recommendations will enable low-income earners to complete construction of a habitable house within a reasonable period. For further study the author recommends addressing the factors that hinder provision of low-cost housing so as to facilitate provision of low-cost housing.