Informal real-estate business in West Africa

In many big cities across the global south, legal housing is unaffordable for poor urban dwellers. In desperation, they build own homes for themselves on public land. The result is unplanned settlements, mostly on the urban periphery. As time goes by, residents create networks and invest in upgrading their homes. Their community gradually evolves into a neighbourhood, which is often tolerated by municipal authorities for decades. Nonetheless, the conditions remain precarious because residents have no secure land rights and live in fear of eviction by the authorities (see Diana Mitlin and David Satterthwaite on our D+C/E+Z platform).

Urban development programmes in Africa and elsewhere often start by legalising and physically upgrading informal settlements. A new ethnographic study focuses on important but often overlooked actors in illegal housing development. It also casts light on some of the economic dynamics that play a role in the creation of affordable housing.

The study looks at the fast-growing spontaneous settlement of Adjahui in the coastal metropolis of Abidjan, the commercial capital of Côte d’Ivoire. This settlement has been growing unplanned in the municipal district of Port-Bouët since 2011. It is located on a peninsula in the lagoon that cuts through the city. By mid-2018, Adjahui had 60,000 residents.

Investors from outside

Adjahui came into being when people who had been evicted from a neighbouring area occupied public land. They created an urban infrastructure, with a market, schools, ferry port, mosques and churches. At first, they allowed other homeless people to join. As the influx continued, the first “cours communes” – small rooms which are rented out separately but share a courtyard – appeared (see box). More evictions in the vicinity followed, while urban renewal and gentrification made rents increase in the metropolis. Accordingly, demand for cheap rooms in Adjahui stayed strong.

Now, only a few years later, other actors dominate the scene. They are local real-estate agents and non-local small-scale private investors such as market women, pensioners or international traders. They invest in rental cours communes. Local construction firms assemble the housing units using prefabricated modules. This kind of investment is risky because the district government might evict Adjahui at any time. On the other hand, the investment will be fully recouped within a few years if demand for cheap housing stays strong and the informal settlement is tolerated for a longer period. After that point, rentals prove very profitable.

The units are constructed on land where customary land rights, though not formal land rights, have been acquired. Investors are thus able to use the plots concerned for an unspecified period of time. The costs of building single-storey cours communes are manageable. No site development expenses accrue. Neither permits nor building regulations must be considered. Moreover, there is no competition by housing associations or accredited construction companies which might drive up land prices.

Typically, investors replace wooden buildings with stone structures after a few years to make higher profits. In many cases, they hope that a “proper settlement” will have a better chance of being legalised. In that case, they could become land owners with full legal entitlement.

Agents matter very much

Unaccredited estate agents who live in the settlement themselves facilitate the illegal construction of rental property in Adjahui. Many started out as contractors or suppliers of building materials to the small investors. Gradually, they rendered more and more property-management services, such as selecting tenants, drafting contracts or personally collecting the monthly rent. The agents know their neighbourhood well and are part of local networks. They can offer non-resident investors a package of services, limiting investor involvement to the financial transactions.

Agents generally display a sense of social responsibility towards tenants. Rents have remained low over the years and are in line with local incomes. If potential tenants cannot afford them or if tenants fall into arrears, the agents will put in a good word for them with the landlord. In emergencies, some have even helped out with their own money.

For many, a room in Adjahui or another informal settlement is the only chance of accommodation in the metropolis. Accordingly, most of some 300 households interviewed for the study were happy to have found a place to live in Adjahui. Despite challenges such as limited public transport or the lack of electric power, people rarely complain about the quality of life in Adjahui. Many residents are convinced that living conditions, infrastructure and services will improve over time. They hope the district government will eventually legalise their neighbourhood.

The new study confirms what international urban research has shown since the mid-1990s: investment in slums certainly makes business sense. Informal real-estate markets in spontaneous settlements merit more attention, both from scholars and from urban planners, including those from international development agencies. Patterns of speculation and the interests of actors involved matter a lot. The crucial point is not that investors show compassion for poor urban people, but that a large quantity of urgently needed low-cost housing is built fast by private investors. Unless the needs of tenants, local property owners and external small-scale investors are understood, it is impossible to fully assess what legal recognition really means to the people concerned.

Reference
Eguavoen, I., 2021: “We do the social.” Deal-making by non-accredited estate agencies, small-scale investors and tenants around low-cost rental housing in Abidjan, Côte d’Ivoire. Afrika Focus 34(2): 183-213. doi:10.1163/2031356X-34020007

Irit Eguavoen works at the Department of Geography of the University of Bonn. She has been doing research in Abidjan since 2017. The study she elaborates on here was funded by the German Research Foundation DFG.
eguavoen@uni-bonn.de