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Significant cost-push factors in owner-built incremental housing construction in Tanzania

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  • Samwel Alananga
  • Charles Lucian
  • Moses Mpogole Kusiluka

Abstract

The owner-built incremental housing approach is highly prevalent in developing countries although its economic rationale is questionable. This study uses descriptive statistics and regression analysis to examine the flexibility of owner-built housing construction cost in response to different cost-push factors based on survey data on 43 main and 20 outbuilding projects implemented in Dar es Salaam Tanzania between 1990 and 2013. It has been observed that factor cost-flexibility of incremental construction is significantly enhanced through longer construction periods, the use of local cement and drainage system materials and larger built space. This flexibility is explained by the owner-builders' ability to internalize these cost-push factors over time which is reflected through lower annual construction costs facing owner-builders even at times of shortage in services and material supply, cost underestimation or high interest rate. These observations suggest that longer construction periods not only offer the cost-spread advantage but also allow a more thorough search for appropriate plot location, cheaper sources of materials, more affordable design and an appropriate match between changing life cycle housing needs and household income. Therefore, the incremental owner-built approach has lower annual construction costs not only because of the cost-spread effect of a longer construction period but also as a result of owner-builders' cost-saving choices made in terms of utilization of certain local materials, purchasing plots in less challenging environments, preferring single-storey over two-storey houses and avoiding complex house design.

Suggested Citation

  • Samwel Alananga & Charles Lucian & Moses Mpogole Kusiluka, 2015. "Significant cost-push factors in owner-built incremental housing construction in Tanzania," Construction Management and Economics, Taylor & Francis Journals, vol. 33(8), pages 671-688, August.
    • Handle: RePEc:taf:conmgt:v:33:y:2015:i:8:p:671-688
    DOI: 10.1080/01446193.2015.1090007
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    References listed on IDEAS

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    1. Centre for the Study of Living Standards, 2001. "Productivity Trends in the Construction Sector in Canada: A Case of Lagging Technical Progress," CSLS Research Reports 01cp, Centre for the Study of Living Standards.
    2. Ballesteros, Marife M. & Egana, Jasmine V., 2013. "Efficiency and Effectiveness Review of the National Housing Authority Resettlement Program," Discussion Papers DP 2013-28 (Revised), Philippine Institute for Development Studies.
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