Why are there so many unfinished buildings in Africa?
economist.com
economist.com
Edit: From some subsequent Googling, it appears this tax explanation was, at least, historically true in Egypt. There are reports that this policy may have changed in the early 2010's.
A lot of US housing styles, such as saltbox and narrow townhouses, are also attempts to game older versions of the tax code
I've heard California used to base assessments on comparative values so that people don't try and game the system with crummy substandard construction and materials.
Think about it. You spend money and work a lot of hours to refurbish your kitchen and then you're informed you have to pay more because of it. I am surprised people don't rebel against this policy.
People don't have enough money to finish it and they leave it for later which usually never happens. Also they leave the possibility that next generation can add a new floor.
Especially the never happens part.
The tax code wasn't only reason for unfinished buildings. In poorer communities, which couldn't get access to loans, it was common to just buy supplies and do construction bit by bit as funds and time were available.
Homes might start off with as little as bamboo poles in corners and PVC sheets tied between them. I swear I saw some that didn't even have roofs. When they had enough funds, they would buy some bricks and just stack them as walls, throw some roofing iron on top or even PVC sheet as a roof
When they had enough bricks, they would buy cement and construct a solid brick wall. Then maybe some concrete for the floor.
Even in middle-class neighbourhoods, it was still common to construct floor-by-floor.
Not a lot of people out of our close to 8 billion can afford such a huge expense in one go.
Government regulation has outlawed people building incrementally in most cases, so people who can't afford to buy a house generally have to rent forever.
Building a house is usually more expensive than buying a similar house, due to building codes, permitting costs, and costs of utility build-out.
If you find a house for sale built by the general contractor for themselves, it's probably very well built. In a lot of ways that wouldn't be obvious to the vast majority of people.
The government often obliges.
A concrete slab multi-story. IIRC, first floor was occupied residential - here are some hesitant people, their stuff, a shrine room. Second floor was bare slab with construction detritus. No walls, interior or exterior - "can customize". Third floor was also bare, no walls, no roof, forest of rebar. Very roughly, IIRC.
Meta: Wished I could copy a list of yt links from browser history, and get a page of thumbnails for a fast visual search. A little script later, found it.
Rainwater and sea spray would corrode any exposed rebar away within a few years.
In fact, I wonder whether it is such a good idea to build on rebar that has been exposed to the environment for an extended period of time.
But I expect rebar-sealer exists for exactly this use...
Construction codes in a number of countries prohibit that.
I understand about poorer countries with lack of regulations, but have not thought that's possible in Europe. Government should not allow anyone to live or operate in such buildings if they're not up to code and are not finished.
How people can get mortgages for such things, or how business can register their offices if building is permanently "under construction"?
The what now?
Take your house. Now add some scaffolding for a new floor on top of it. Does it alter the ability or even quality of living in it?
It might also help hide the pool, which is also taxed.
"Up to code" isn't the same as a safe house. That's just such an american way of looking at issues. All that does is make the legal liability clear. It doesn't make anything safer or nicer.
It's like arguing that a 'stop sign' makes an intersection safer. It doesn't. Real proper pedestrian and cycling infrastructure does. Traffic calming. A stop sign just tells you who gets bankrupted when another person is killed yet again.
Your asking the question 'if it's unclear who can be sued how can people be safe' but these things are completely unrelated. As any statistic would tell you.
You could not be any more wrong and your rant at then end was irrelevant on what I've asked.
And regarding lack of regulations, I can assure you that about 50% of Europe isn't too keen on regulation, either.
Plus, few people are that stupid. This isn't actually dangerous. They generally leave some "decorative" rebar sticking out somewhere over 2m or so in the air, or on the actual roof of the building. Nobody can really get hurt, not more than you'd bump into the chimney :-)
Egypt is/was a strange country when I last visited it.
You "can build in the middle of a dry riverbed" (if nobody is watching) is not the same as "you will be allowed to repair" when your house will be flooded six years later. (And it will happen, because this place was called 'las ramblas' for something).
The real state promoter wants your money, not your friendship, so using the services of a professional consultant can save you a lot of future headaches.
Yes, the law is very clear about a lot of things, but what happens in reality is often not so clear always.
Permits for modifications in extant buildings can be also hard to obtain if the area is historical and buildings are singular, old or protected for some reason. Specially if you want to mess with the load that the structure must stand. Out of this areas there is often a 'permit free' period in Abril-May for doing small repairs and repainting.
Seems around the world corruption has an architectural style. Related: https://en.wikipedia.org/wiki/Window_tax
But this one is defnitely true and the reason why you see so many bricked windows in London: https://en.wikipedia.org/wiki/Window_tax
The massive credit expansion is exactly what you don't want if you want to ease the housing market.
The Economist got almost everything in this story wrong.
I have personal experience of being to Nigeria a few times on infrastructure subcontract projects.
The predominant portion of those abandoned construction sites are made by plain fraudsters, take money, make a semblance of construction going, then vanish with money.
Urban apartment housing in most of Africa is seen as something for a more affluent, and well off, much alike how it is in Asia, and not the other way around as it is in the West.
There are quite proficient builders in economically relatively well doing African countries. Take a look on http://www.mhfproperties.com/
Where fraud proliferates are 2nd tier African economies, and housing for people lower on the class ladder (ones who are just entering the middle class, and still want save hard on housing.)
The shortages of cement, steel, and construction supplies bear much more on the availability of housing than any of that "liquidity" thing.
Africa needs more factories, more mills, more kilns, more technical know how. At the moment even such basic things like petrol, and cement are largely import only even in most developed African economies.
This leads to those countries squandering their short FX resources gained largely from agricultural exports, which could've been spent in import of something more useful, and productive, like plant machinery.
Building capital requires financing. Financing depends on trust and stability. From your description, it seems like the issue is an ineffective legal system that allows widespread fraud.
https://m.youtube.com/watch?v=4LSuZGlqL34
African attitudes and behavior are very different from those of people whose nations have developed technologically in the past 200 years. No amount of loans will teach people how to mix concrete or organize an effective workforce. These are things that people either decide to do on their own or have imposed upon them by a colonial power.
I oppose ensnaring third world nations in debt. Either give them free stuff or let them figure civilization out on their own. "We can help them while making money at the same time" is always a veil for exploitation.
Predatory loans are not the whole picture. Stock markets and business loans have made many poor people rich. I know some of them.
> No amount of loans will teach people how to mix concrete or organize an effective workforce.
Student loans can help here.
> I oppose ensnaring third world nations in debt.
The developed world does not have a monopoly on finance. Credit unions and microcredit are possible anywhere, but nevertheless depend on trust and stability.
There are African countries with well functioning legal system.
Widespread fraud is, you know, happens much across the rich world, and victims are usually much the same demographic.
You can't prosecute a man going missing without a trace.
> For Senegalese hoping to build their own homes, mortgages are rare. In all they cover only about 20% of the need. Across many African countries even the cheapest newly built house is unaffordable for most people. Instead, people break ground knowing they do not yet have the funds to finish. When they earn a little more money they add more bricks.
I think it's worth noting these two paragraphs above because, whilst the topic refers to "unfinished buildings" (which, depending on your local English dialect, typically evokes a sense of large buildings being constructed), the same financing hurdles apply to far smaller "buildings" across Africa - such as single room homes and other types of small dwellings.
> The shortage of finance makes a vicious circle. Many Africans, in effect, save in concrete. Thus money gets tied up for years in unfinished buildings earning nothing, rather than being put into a business or bank where it could earn a return which could allow would-be homeowners to build more rapidly later. The lack of liquidity in the financial system then further limits what banks can lend to builders.
A vicious circle indeed.
To the more economically astute among us, how would a country go about solving this problem?
Any historical analogies would be appreciated.
This is pretty common actually. You build one room, make it livable, and then build the next room, then the next, and when you run out of land, start on the second story. The end result is that a young family with children can own their own home, and live within their means immediately, rather than spend a decade renting and saving towards a down payment. You can see this over and over in the favellas of South America, and even on the outskirts of major cities in Vietnam like Hanoi and Ho Chi Minh City ("Saigon").
Modern/western building codes do not allow for this kind of piecemeal construction, which is probably why it seems so odd to us.
Coober Pedy is one of those places I'd kinda like to visit someday.
So injecting capital is almost guaranteed to not work.
You can't have well run banks without commercial law, you can't have commercial law without great schools, law schools, good legislators, a judiciary, acting in good faith and 'not corrupt'.
Without a systematic, organized solution, it might be worth teaching people skills and abilities that serve to create value without the overhead - for example, carpentry, masonry etc..
My grandfather and family built their own home, their own cottage, installed all of the plumbing themselves and this is in a 'modern nation' less than 100 years ago, and it was not uncommon.
However - they were highly skilled craftspeople, with knowledge and abilities passed down from generation to generation, information that made it 'across the Atlantic' from Europe into the new world without state organs, schools etc. to do so.
We have a hard time today grasping that, we kind of expect 'the government' to make the right trade schools, colleges and universities available for 'where all the knowledge is' but it was never really that way.
Without extra currency floating around to facilitate loans etc, then it's the labour of communities i.e. family, friends children. Amish and Mennonite communities are strong examples of this kind of behaviour, not that they are necessarily the perfect example, but you can see it in action.
There's so much focus on 'top down governance' approaches in these areas because it's the issue that our own governments can speak to in terms of money, grants, investment, and actors on the other side can sign agreements talk about plans etc..
But in reality it's probably worth sometimes looking at such systems as not very governed at all, and developing things that work very well on the local level.
Unless they talk about some really poor Central African countries, it's not a problem in more well off parts of coastal Africa.
A Kenyan, or Nigerian family of economically active class can buy their first property in cash.
The talk here is a about the part of populace who is just above living in slums, and informal housing. A very different matter without a doubt.
Which part of the article (or my comment), exactly, is vastly inaccurate?
Having lived in an affluent part of coastal Africa for a couple of decades, I am intimately familiar with the wealth disparity which you speak of.
But I don't see how the luxurious living of the minority renders the overall arguments in that article inaccurate.
Please help me understand what you're referring to?
Saying simply, credit availability make little difference for construction business in already relatively well doing countries in Africa, and everybody else will have much more obvious issues to deal with first.
https://en.wikipedia.org/wiki/Senegal#Ethnic_groups
Or 99.6% African.
The Top 40 countries by HDI are all European or East Asian (excluding those with oil):
https://en.wikipedia.org/wiki/List_of_countries_by_Human_Dev...
Why don't countries like Senegal seek to increase their European and East Asian populations until development targets are met? They could offer tax-free immigration and residency.
However, this is unlikely to be the root of the problem. More likely is that the national economy is simply not productive enough to reach the production levels needed to enjoy prosperity similar to the one observed in developed countries. What that means is that on the one hand, too much of existing production is going into consumption, and too little into investment. Instead of building more houses, they should be building more cement plants, more building material factories etc, and the same goes for other sectors of economy too (eg if agriculture mechanization allows fewer people to work on food production, more people will be available to work on house construction). Of course, given the already low levels of production and consumption, it’s hard to reduce consumption even further, but then again, prosperous western countries used to be just as poor in the past, and they managed to pull themselves by their bootstraps anyway. In many ways, African countries today have it easier, as the knowledge of what to do and how already exists.
In addition to too scarce investment, a second major factor is differences in productivity on individual worker level. The sources of these differences are really diverse: they range from bad people management practices, through use of inefficient work techniques, higher human error rates resulting in more time wasted on useless products, and many more. This is a harder problem, and there are no simple solutions, but on the bright side, the longer economy is stable, the more companies have time to mature and refine their practices, so this is improving on its own over time.
And lastly, there is often problem of bad institutional practices, like excessive taxation, excessive regulation, government corruption etc. It’s much easier to build a cement factory when you don’t have to care much about environmental regulations, and this is exactly the regulatory regime that countries like Britain, US or China enjoyed when they were climbing themselves out of poverty. Similarly, there is more money for investment, if the government is taking less of it. This sounds like something easy to change, but in practice the institutional inertia, combined with copying Western practices as of right now rather than as of when they were of similar development levels makes it harder than it should be.
One big problem is that modern capitalism is intensely individualistic, as is Western culture in general. African culture, on the other hand, is completely community-focussed. The individual does not exist apart from the community (family/village), therefore there is no concept of "private property".
This makes for a lot of frustration in intercultural interactions between Westerners and Africans. It's also the reason why almost all successful local development projects target the entire community, not individuals.
(This is not to judge one culture or the other! Just to point out that an economic system developed in one culture cannot be expected to work without problems in a very different culture.)
If you don't live in an advanced organized country and you are poor you have to rely on your local group. How else are you going to survive?
If you educate those people, put them in an advanced country and make them well off, you will see individualism appear.
There's still lots of small property owners that are still poor that would prefer not paying taxes on their small holdings.
In practice though, people pay property tax on assessed value of buildings, but it’s not the same as land tax so an unfinished building can be counted as worthless depending on its state.
> a register of property showing the extent, value, and ownership of land for taxation.
Unfortunately, if it's cultural (you owe your relatives any spare liquid capital you have) then I don't know how to fix it.
In fact, the police (and local politicians) are often present to contribute to the threat.
In his research he found that the legal system around property was very ineffective for poor people and many developing countries. They followed real life cases trying to bring properties/businesses from the informal sector to being fully registered and taxed.
It was often a many year process and expensive. Owners would also have preferred to pay taxed when getting access to fully legal status, access to banking and capital markets an important one.
Findings where from places like Peru, Egypt, Philippines (if memory serves me), and contrasted with places like US, Germany, England, Sweden, and Japan. The latter mostly had a well structured, democratic system of property law and registries available to everyone, not just the wealthy or powerful.
Edit: Another key element was to open a process to convert squatted land into legal property. Many times formal land ownership was not conforming to lived reality, and some legal title nobody was interested in any longer was blocking legalization of actual use. US homesteading regulations are one example of how that was done, but all western countries mentioned earlier have or had equivalent processes.
the process: https://allthatsinteresting.com/wordpress/wp-content/uploads...
It actually argued for lots more bureaucracy, not accountants particularly. And for a cadastre / land registry. And indeed mentions Hernando de Soto's work in Peru and Egypt.
I remember watching a documentary where they reproduced his experiment. Essentially, send a team of students in each country on a mission : create a company. I've done it in the UK, it's one day and 70 pounds. In the documentary they showed the complexities for just the administrative act of "creating a company" in (I believe) Argentina. It took them 3 months.
[1] https://www.investors.com/news/management/leaders-and-succes...
My Western viewpoint also thinks there isn't much "spec" that poorer countries follow, maybe just: if it looks like it won't collapse, it's good enough, and hopefully young people also can judge whether a building looks like it's going to collapse or not.
And it would be a lot more efficient for the locals to use the manpower properly (with supervision) rather than letting them "play" and then having to tear down what they built.
At the worst case, the helpers could just be made to carry bricks and wooden planks from 1 spot to the other, and they'd still feel that they contributed.
People in poor countries don't need scrawny wealthy college kids to help them build mud huts that are "good enough" as long as they look like they won't collapse. Not to mention that most of those kids probably have no prior experience building anything by hand or the physical strength, energy and motivation to be truly helpful.
Considering how much HN celebrates entrepreneurship and "disrupting" established business models, I wonder why you think they're more likely to be inept enough to benefit from an untrained, unskilled and likely undermotivated foreign kid helping them build things than having figured out there's a business in selling the "foreign aid" experience.
As I've replied upthread, the kids could just be told to carry bricks and wooden planks (and hammer some nails in - it's not rocket science) and they'd probably feel glad they contributed.
If I wanted to scam some Western kids, I'd just start a construction company, get them to volunteer, and tell them we're building an orphanage, while pocketing the profits for the office building being constructed. Not tell them to make something and then tear it back down when they've left.
Did you watch the NRA guy's "elephant safari" footage? Rich people in Western countries pay good money for "hunts" with their only involvement being to pull the trigger for the final shot on the already downed and dying fully domesticated animal. No need to go through he hassle of actually teaching a foreigner to read tracks and shoot straight first if they just want to feel like they accomplished something.
The point isn't to scam Western kids. The point is to provide a service. The Western kids get to "help" build something, the locals get money to actually pay for people to build it properly (or literally anything else because unlike unskilled volunteer labor, money can be exchanged for goods and services).
I'm genuinely surprised you seem to think poor countries are poor in a way that can be solved with an influx of unskilled labor. Poor countries lack money, not unskilled labor.
What's going to convince more rich Western kids to do "charity work" in your country? Using them as the untrained and unskilled labor they likely are and telling them to haul bricks for a week until they are sick of it or hurt themselves, or letting them feel like they meaningfully contribute without overexerting themselves and then clean up when they're gone so you can go back to doing something productive? Contrast the PR implications of "yeah, I went there and they only let me haul bricks for two days until I threw my back out and now I might not get the football stipend" versus "yeah, I went there and helped them build a school but I heard they had to rebuild it later". People are much more likely to glorify the later (even if they didn't contribute much) and to dramatize the former ("the food was terrible, the weather was bad, there were mosquitos everywhere, I couldn't get any sleep, I was constantly in pain and they had no doctors"). Even without getting into liability, letting the wealthy foreign kid "play" rather than do anything actually important or dangerous to them seems a far safer option.
They're selling an experience and there's a lot of money in doing that. It's just another form of tourism.
Whatever, I'll still think it's an urban legend until someone posts some credible links that says "It's true".
In reality, the "finishing" phase can cost the same as the "base" costs (Or more depending on what quality-standard you're aiming for).
I've been wondering ever since what the Greek reason for that was - any ideas?
But one reason, I've read, is the mafia. They have evolved into financial organizations in recent decades, and often bid on and obtain public funds to start new building projects, build out the bare minimum then keep the rest for themselves, iirc.
https://www.google.com/maps/@34.0767918,-118.2916802,3a,75y,...
Taxes might have something to do with it. But also Mexico is so poor, I think there are just a lot of cases where people just don't have the money to finish a project right away or even tear down an old building. So it's just almost normal to see derelict of half-finished buildings in certain areas. My theory is that it therefore becomes sort of customary and acceptable to leave things like that and so it is more common. Even in cases where people could afford to finish more quickly.
This was weird.
*I didn't read the article, so maybe already mentioned