LESOTHO SHELTER SECTOR ASSESSMENT

This shelter sector assessment was prepared in response to a GOL request for A.I.D. assistance in developing a national housing policy to guide this effort. The greatest constraints to past housing projects in Lesotho have been their high cost in relation to income, lack of a centralized GOL housing agency, an undeveloped private housing market, and lack of donors. Construction costs have been high due to a shortage of building materials in urban areas and the migration of management personnel and skilled workers to South Africa. Construction has been largely carried out informally (formal construction being contracted exclusively by the GOL and parastatals), using self-help, hired skilled labor, and traditional building materials. Under its current 5-year plan, the GOL will invest Rand 5.93 million in housing, much of it from external sources, create a national housing policy, establish a housing finance institution serving all income groups (the Lesotho Building Finance Corporation -- BFC), and increase low-income housing. This is the GOL"s first commitment to housing (aside from civil servant and expatriate housing), although the program"s financial disbursement still favors higher income groups. Households earning over R100 per month are likely to pay 25% of their income to become homeowners while low-income groups should be able to make a 10% down payment. The passage of the 1973 Land Act, the authorization of BFC, and two bills currently being considered are increasing the GOL"s powers for development regulation, financing, and urban planning. Recommendations for a new national housing policy include: (1) use available resources; (2) ensure housing investments are efficient and equitable; (3) increase and not simply replace the housing stock; (4) increase options rather than provide standard housing solutions; (5) be explicitly concerned with all income groups; (6) maximize use of private capital; and (7) minimize subsidies. Annexes include the study"s information sources and a list of those interviewed.