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Owner-Builder Housing in Jordan

DAVID SIMS* Luxor, Egypt

Housing strategies in Third World countries usually attempt to influence existing housing systems so that they are more responsive to the needs of the majority of households, especially those of limited income. With few exceptions this means influencing the private sector through various policies. Often such policies are inappropriate or even counter-productive because the prevalent housing processes are poorly understood, in particular the process of owner-built housing.

Owner-built (or “individual”) housing is a process where management tasks are undertaken by the owner and where the housing produced is primarily for self use. Normally land acquisition, financing, construction supervision, purchas- ing of materials, and “marketing” are all handled by the owner. The phenomenon is very widespread throughout Third World cities and has been well documented, beginning in the 1960s. However, in the literature it is frequently discussed within the context of spontaneous settlements, squatting, and the informal sector. It is often confused with “self-help” housing, which is interpreted by some to mean that the owner’s family or community contribute an important labour input to the building process.’

It is often difficult for officials and professionals of a country to accept that the owner-builder may represent a major kind of housing producer and that such housing processes, if stimulated. could have a greater effect in achieving housing goals than relying on the corporate private sector or on a range of direct public sector interventions. The owner-builder process may be seen as “backward” since it minimises the use of Western-style housing institutions such as mortgage banks, construction firms, general contractors, developer companies and the like, and also imported construction technology. It does not help that Western advisors sometimes bring with them the idea that owner-builder activities are limited to spontaneous settlements and the poorest segments of the population.

In this context it would be useful to focus on one country’s housing sector briefly to: (1) delimit the extent and characteristics of owner-built housing; (2) identify its structural relationships; (3) assess its ability to provide new housing for those of limited income; and (3) investigate attitudinal opposition to its acceptance and ways of overcoming this opposition.

Jordan is selected here as the country of discussion. It has a housing industry which is dominated by owner-builder activities, and a relatively good picture of

*Address for correspondence. c/o Rambow (Sutte 7) . 2 El Malek el Afdal Street, Zamalak, Cairo, Egypt. ‘The htcrature is very wide rangmg. and tcrmmology can become confustng. Self-help housing. also called

autoconstruction. self-build, or mutual atd housing - tends to be linked to spontaneous or squatter settlements; see Se/f-Help Housing A Crrrrque, Ward, P.M. (Edttor). Mansell, London, 1982. Self-help housmg may mean only that “dwellers arc m control”. but usually the idea of direct family or community labour predommates. with “people housmg themselves wtth their own hands”; see Freedom IO Build, Turner and Fichter (Editors), Macmtllan. New York, lY73. p. viu. Self-help housmg also seems to Imply something apart from the capitahst economy, as tf it were an alternauve way

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the nature of the phenomenon comes out of recent studies carried out by the Shelter Unit of the Ministry of Planning as part of the National Housing Strategy Study.’ Included in the studies were a nationwide housing survey and a series of investigations of private housing suppliers. These are the main sources of the information used in this article.

THE HOUSING CONTEXT IN JORDAN

Jordan is a highly urbanised country, with almost half the total population concentrated in the capital region (Amman-Zarqa). Very high urbanisation rates have been pushed by a natural increase of population above 3% per year. Jordan is today a relatively prosperous developing country, having benefited from the oil boom in neighbouring countries and, particularly, the opportunities for Jordanian expatriate workers. Over the last 25 years and especially during the period 1973-1983 there has been a very high level of housing construction. This housing, except for that found in rural areas, is primarily 2-5 storey apartment buildings of reinforced concrete frame and cement block or stone. Progressive building, i.e. the vertical addition of more storeys and flats over time, is very common.

Institutions related to the housing process in Jordan can be considered quite modern by Third World standards. Housing loans either for purchase or construction are available, mostly through the Jordan Housing Bank. The construction/contracting industry is well developed, and there is no lack of engineers and other professionals. Unlike many Third World countries almost all urban land is registered and planning codes are enforced.

Even though high levels of housing activity have produced a new, good quality housing stock. many studies have shown that there remains a serious problem of housing affordability for Jordanian households with median incomes and below.’ Without finance, for which most poorer families cannot qualify, the only solution is amassing sufficient equity over many years to purchase land, and then repeating the long savings process to be able to build. Serious overcrowding in sub-standard older units is the lot of many poorer families.

DEFINITION OF OWNER-BUILDER HOUSING IN JORDAN

In the Jordan National Housing Strategy study a considerable effort was made to define and understand the main producers of housing and associated actors. In the public sector housing is produced by the Housing Corporation, the Urban Development Department and various other agencies. In the private sector the main housing producers are corporate developers, contractor-developers, and the owner-builder. As will be discussed below, the owner-builder contributes by far the majority of Jordan’s annual housing product.

The following broad definition was used for the owner-builder:

He is an individual who manages the production of housing unit(s) primarily for his own or family’s use. He will secure land and plan and finance the production of the unit(s). He may employ a general contractor but it is more likely that he will organise all ‘aspects of the building process himself,

‘The Jordan NatIonal HousIng Strategy (JNHS) study was carried out in lY86-1987 hy the Shelter Umt of the Mimstry of Plannmg with technvzal assistance from PADCO Inc.. The Urban Institute. USL Internattonal. and Culpm Planning. and was funded by USAID.

‘See Jordaman Mmrstry of Plannmg. JNHS. Technical Memorandum No. 13. “Housmg and Residential Land Affordablht!“. 1YX7

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employing sub-contractors or master builders directly for construction and finishing. He or his family may contribute his own labour or skills, but this is not a definitional requirement. He may produce some units for sale or rent but only as a secondary objective. He will not normally be active in construction on a full-time basis.

As can be seen, the key concept in the definition of the owner-builder is the organisation and management of the housing process. The owner-builder thus performs functions that would in other situations be the domain of the general contractor and/or developer. It should be noted that in undertaking these functions the owner-builder, as an individual most likely without previous construction experience, must invest considerable time and effort in learning about all aspects of managing construction and in seeing through the whole process.

In his efforts the owner-builder will have to deal with a range of associated “actors”. Unless inherited, land must be purchased, and sufficient finance must be mobilised, either by negotiating with banks, by converting family assets, or by borrowing from relatives. Building designs must be made and municipal approvals obtained, both for construction permits and for utilities hookups. Unless the owner-builder engages a general contractor on a turnkey basis, he will need to deal with a whole set of additional people, such as suppliers of building materials, materials transporters, foremen, skilled labourers, sub-contractors, fitters, etc. It was found that in Jordan (as in many Middle Eastern countries) a key “actor” is the master-builder or muallim as he is called in Arabic. So important is this person in the owner-builder housing process that his role and profile are discussed separately below.

DOMINANCE OF OWNER-BUILDER IN JORDAN’S HOUSING PRODUCTION

It is clear that the owner-builder housing process produces in Jordan, both now and in the last 25 years, the overwhelming majority of all new housing. Analysis of the 1986 National Housing Survey4 shows the owner-builder dominance clearly, as can be seen by the folowing table. Thus, for example, it is possible to conclude that of all new housing units built between 1980 and 1986, at least 77% were owner-built, with the remaining 23% being built and sold by public organisations or by private developers or inherited.’ As can be seen, the dominance of the owner-builder holds for both urban and rural areas, and also for all time periods. Estimates made by the Ministry of Planning’s Shelter Unit of total annual housing production for the period 1980 through 1985 reinforce this

Table I. Percentage of new housmg units built by owner, by year unit was built

Area Before 1980 1980-1986

Greater Amman Other urban Rural Total

60% 78% 57% 69% 66% 80% 61% 71%

Source: JNHS 1986 National Housing Survey

4See Jordanian Ministry of Plannmg, JNHS. Technical Memorandum No. 18. “The Jordan National Housing Survey”, 1987.

‘Due to the design of the survey, it was not possible to conclude how rental units were constructed; however, there is no reason to suppose that the drstribution would vary significantly from that found for owner- occupied housing.

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conclusion: of total average annual production of 17,900 units, 86% were built individually, i.e. primarily by owner-builders.’

Results of the 1986 National Housing Survey also show that owner-builder housing production is predominant for all household income groups for the period 1980 through 1986. There appears to be a consistent slight under- representation of owner-builders in lower income brackets and over-represen- tation in higher income brackets. especially for Greater Amman.

CHARACTERISTICS OF THE OWNER-BUILDER HOUSING PROCESS

In this section a quick review of salient characteristics of the owner-builder housing process should give the reader an overall feel of the nature of the owner- builder and how he operates. It must be stressed that these are only generalised, “on average” results which hide the rich variety of arrangements.

These findings are based for the most part on 52 in-depth interviews of owners in the process of building in 1986 which were undertaken by the Ministry of Planning’s Shelter Unit. Respondents were chosen to reflect as far as possible the universe of owner-builders, both geographically and in terms of household incomes.’

Who is the owner-builder?

The owner-builder was in almost every case a male and the head of his household. Two-thirds of cases were self-employed with only one third being salaried employees (in contrast to a roughly 50-50 split for the nation as a whole). The median of stated household income was JD 210 vs JD 1.50 as a national average. ’ In 20% of cases previous experience in the construction industry was mentioned.

Kinds of housing units being built

In almost every case the housing units being built were judged by interviewers as being of either “good” or “average” quality of construction. In 80% of cases a single unit was being built, and in the remainder of cases two or three units were under construction. 70% of cases involved new buildings and 30% were vertical extensions onto existing structures. The gross area of housing units being built varied widely, with a median size of 143 sq. m.

Motitvations for self-building

In all but one of 52 cases the stated purpose for building was to have a place for the owner-builder or his family members to live (in one case the unit was being built for rental). The main reason advanced for building on one’s own was that such a method was the cheapest, and a secondary reason was that building could be carried out as finances permitted. Similarly. “high prices” followed by “cash shortage” were the reasons given for not trying to purchase a housing unit from the private market. That a significant number of owner-builders were previously living in rental accommodation can be inferred from the fact that 40% of cases expressed the desire to “own a home” as a reason for changing residence.

“See Jordaman MInIstry of Planning. JNHS. Technical Memorandum No. 8. “Housmg Dehvery Systems”. 1987.

‘See Jordanran MIntstry of Planning. JNHS, Technical Memorandum No 9. “Private Housing Supphers Survey”. 1987

‘One Jordaman Dmar (JD) was worth roughly 2.8 US dollars m 1986 and 1987

Owner-Builder Housing in Jdrdan 127

Building design and formalities

From the survey it is clear that most owner-builders are legally correct. Designs were signed by either a registered architect or local engineering office in all but 15% of cases, and in 88% of cases a building permit was obtained from the relevant municipality and the site visited at least once by a building inspector. In only two of 52 cases was it stated that inspectors and regulations caused problems.

Sources of finance

Despite Jordan’s relatively sophisticated mortgage banking system, in only 14% of cases were bank loans stated to be a source of housing finance. On the other hand, a full 47% declared savings from work to be the sole source of funds, and a further 43% stated savings from work as being one of two or more sources of finance.’ Other sources of finance - such as selling jewellery, family loans, and the transfer of remittances from abroad - were rarely mentioned.

Organisation of construction

A fundamental characteristic of the owner-builder is his close relationship with the master builder or muallim. Of all cases reviewed over two-thirds used the master builder directly for construction, with payments made only for workman- ship (usually on a piecework basis) and materials being purchased by the owner. Only in 25% of cases was construction carried out by a general contractor on a turnkey basis. (For more detail on the master builder see below.)

The owner-builder was likely to supervise construction, being present at the site “on a daily basis” in 75% of cases. In only 20% of cases was a professional supervision employed for some aspect of construction.

In only 25% of cases was it stated that members of the family participated in construction activities. The most common type of contribution was in the transport of building materials.

The hiring of casual labour on a daily basis was normally undertaken by the master builder, but in roughly one-third of cases the owner-builder would hire labour directly, and in all cases the owner-builder was very aware of prevailing wage rates.

Of building materials that were purchased by the owner-builder himself, the most common materials were cement, aggregate and sand, stone, reinforcing bar and cement block. On the other hand, only rarely were tiles and electrical and sanitary elements purchased directly. In other words, the owner-builder’s involvement in materials purchase seems to be greatest in the structural phases of construction, with less involvement in finishing, where the specialist subcontractors would themselves supply the materials as part of an all-in installation price.

CHARACTERISTICS OF THE LIMITED-INCOME OWNER-BUILDER

How might the owner-builder of limited means vary from the general picture of the Jordanian owner-builder given above ? The small number of in-depth interviews carried out by the Shelter Unit (52 cases, of which 12 could be deemed to cover poor families) make it difficult to come to conclusions. However, by comparing general survey results with those of the limited-income sub-group,

‘“Savings from work” included savings accumulated over several years of working abroad.

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and by adding to this results of other surveys of poorer owner-builders in Jordan,‘” the following points emerge.

For almost all characteristics there is remarkable agreement between the limited-income sub-sample and the overall sample. As expected, the size and cost of construction was on average much lower. But the predominance of self- employment of the owner and the overwhelming use of “savings from work” as the prime source of finance held for both groups. It is interesting to note that in every limited-income case use was made exclusively of the master builder being paid on a piece-work basis, and never was a turnkey arrangement made with a general contractor. Also, supervision of construction was never hired out, and there was a slightly higher degree of family participation in the construction process.

ROLE OF THE MASTER BUILDER OR MUALLIM

There is in Jordan what could be termed a symbiotic relationship between the owner-builder and the master builder or muallim in Arabic (plural: muallimiin). For this reason it is worthwhile to present a sketch of who this person is and how he operates. A good profile was obtained by the Shelter Unit, since at the same time that in-depth interviews of owner-builders were conducted, similar interviews of 34 master builders were carried out.

Definition of the master builder

The master builder in Jordan is not easily defined. individual builder who does not offer general

He is best described as an contracting services, but .~

concentrates on basic aspects of construction. His business is normally small and under-capitalised, flexible and even seasonal. Generally he offers his services on a piecework basis, charging for labour, his expertise, and his equipment used (masnayia in Arabic), leaving the acquisition of building materials to the client. He will work for anyone - owner-builders, sub-contractors, general contrac- tors, or developers. It is very unlikely that he will be registered as a contractor or own a company.

Dominance of the master builder in housing construction

There are various indicators which point to the dominance of the master builder in housing construction in Jordan, both now and in the past and both in urban and rural areas. The first indicator comes from the 1986 National Housing Survey, where owner-occupier households were asked who executed the unit’s construction. It is clear that the “muallim with owner supervision” category predominates for all geographic areas (Greater Amman, Other Urban, and Rural) and also for all time periods (before 1980, 1980-1982, and 1983-mid- 1986). Overall 62% of units were stated to be built this way, eclipsing “contractor” at 31% and “self’ at 7%. And because of the format of the questionnaire it is very likely that many households who responded “contractor” actually meant individual contractors who were actually master builders.

The dominance of the master builder is echoed in the results of in-depth interviews as part of the survey of owner-builders (described above). Of 52 cases. only 24% stated that construction was executed under “turnkey” arrangements, with 68% relying on masnayia arrangements (i.e. exclusively with muallimiin). This survey also showed that the masnayia arrangement with master

“‘See Urban Development Project, Halcrow Fox, “Study of D-Zoned Areas”. 1YXS

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builders becomes even more pronounced for lower cost housing, e.g. the percentage rises to 77% for units of less than 125 sq. m in area, and to 91% for units built in D-zoned areas (the areas with the lowest standards under Jordanian planning laws where most lower-cost house building occurs).

Characteristics of master builder operations

The in-depth interviews of master builders allowed a general picture of who these individuals are and how they operate. Salient conclusions can be summarised as follows:

l Current assets of master builders were small, with over half of interviewees estimating the value of their assets at less than JD 1000, and a further 25% with estimated assets of between JD 1000 and JD 5000. Equipment most commonly owned by muallimiin was formwork, concrete vibrators, cement mixers, and, in some cases, a vehicle.

l Only in one case of 32 did the master builder have any formal training in the construction field.

l 70% of interviewees estimated their initial capital investment at less than JD 1000 and 93% stated that their sole source of finance for starting operations was “personal savings from work”.

l Operations were in general small scale, with an average of 5.5 housing units produced per year.

l Only one quarter of cases were registered with any government or professional organisations.

l In over 90% of cases the master builders’ clients were normally private individuals, i.e. owner-builders. However, 34% of cases stated that they sometimes worked as sub-contractors for general contractors.

l No small contractors interviewed stated doing work on a turnkey basis, and three-quarters entered exclusively into masnayia (piecework) arrangements with clients.

l The most common types of construction work undertaken were RC structures, plastering, tile work, and block/brickwork. Only a small number of interviewees were also involved in aluminium work (e.g. doors and windows), carpentry, plumbing, and electricity.

l Clients normally found master builders through friends, neighbours, relatives and co-workers. In no cases did a small contractor use formal advertising. In other words, personal contact and reputation formed the common link between the small contractor and his usual client, the owner- builder.

l Thirty-six per cent of master builders interviewed stated that agreements with clients were always verbal, 28% used written contracts, and the remainder used both types of agreements, depending on the wishes of the client.

l When asked how disputes with clients were settled, only 18% of those responding to the question stated that court action was sometimes required. Over 75% stated that disputes were resolved by “mutual agreement”.

l Only 15% of cases interviewed stated having any knowledge of the new Jordanian contractors registration law, and only 9% paid fees to the Jordan Contractors Association.

l Only 19% of cases interviewed stated paying any taxes associated with their work, and only 12% of cases stated paying social security taxes on employees.

It should be apparent from the above summary that the master builder is characterised by a high degree of “informality”. The typical master builder has

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little relevant education, is minimally capitalised, and operates on a small scale. He pays little or no taxes or social security and shuns membership in professional organisations. Perhaps most significantly, his arrangements with clients and labour is casual, depending on personal trust rather than formal contractual relations.

In spite of this informality (or more likely, because of it), the master builder as “actor” is an important key to the overwhelming success of the owner-builder housing production system in Jordan. Together the master builder and owner- builder form a solid axis in housing provision.

COST ADVANTAGES IN OWNER-BUILT HOUSING

The single most important reason for the dominance of owner-built housing in Jordan is that it is cheaper than other alternatives. This cheapness is clearly perceived by the end-user of the housing produced. It is also borne out by housing cost analyses carried out by the Shelter Unit of the Ministry of Planning,r’ where a cost breakdown of hypothetical housing units was made, enabling a comparison of total costs per sq. m for units executed by owner- builders, by private developers, and by government organisations. The owner- builder was found to be able to build for at least 30% less than private developers. (Government housing came out the most expensive when all overheads were included.) Moreover, interviews show that on average an owner- builder building in cement block (the cheapest alternative) could build for 20% less by using the master builder than if a general contractor were employed.

These cost advantages are not surprising, given that the owner-builder avoids the costs of administrative overheads, marketing, and various government fees which must be borne by the private developer. Furthermore, the developer’s profit and risk component of costs does not exist for the owner-builder. Perhaps most importantly, the owner-builder who uses the master builder or mualfim can avoid the overhead, profit, and loan costs which a general contractor must cover.

It is ironic that owner-built housing is so much cheaper even though it is, at least theoretically, less efficient than corporate housing where modern equip- ment and technologies can be used, and where building materials can be bought in bulk and construction site wastage minimised.

ATTITUDES TOWARDS OWNER-BUILDER HOUSING

In Jordan surprisingly little attention is paid to the owner-builder housing process by government officials and professionals who are concerned with housing problems and housing policies. In attempts to solve the housing problem facing lower income families, emphasis continues to be placed on either government housing projects or on stimulating the private sector (i.e. private developers) to produce appropriate or affordable housing.” It is as if owner- built housing as an appropriate alternative somehow does not fit with the preconceptions of what housing for the poor is all about; and there is a fear that if left to themselves low-income families will produce slums.

“See Jordaman Muustry of Planning, JNHS, Technical Memorandum No. 11, “Constructton Costs and Technologies”. 1987.

“Faith m the corporate developer’s ability to produce low cost shelter m Jordan, despite much evidence to the contrary. was the corner-stone of USAID’s Housing Guarantee Program to Jordan, started in 1985. A full half of funds were reserved to finance mortgages for h&sing built by p&ate developers and affordable to the target population; to date disbursements of developer funds have been negligible whereas individual loans have been very popular.

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In the opinion of some Jordanian professionals poorer owner-builders using muallimiin are likely to build substandard and deficient housing, despite evidence to the contrarary. l3 It is no coincidence that these architects, engineers, and contractors stand to gain significant work from formal housing projects, and at the same time are largely redundant in the owner-builder housing process.

A notable exception to the prevailing approach to lower-income housing in Jordan are the sites and services schemes sponsored by the Urban Development Department, which were started in 1981 after extensive study and have been supported and partly funded by the World Bank.14 To date some 2000 serviced plots and core units have been distributed in Greater Amman, and build-out by the beneficiaries has far exceeded expectations. These projects had to overcome considerable resistance to be realised, but now they are accepted at least as one approach. Yet they are “projects for the poor”, with lengthy means test selection procedures and very tight building regulations. They are sited on large, isolated tracts of land which both visually and socially reflect their “project” character.

Currently there are moves by the Jordanian Government to increase the control and regulation of housing construction. A 1Zvolume unified building code is under preparation by the Jordanian Royal Scientific Society, all contractors are now required to join the Jordanian Contractors Association, and all construction activities require supervision by a qualified engineer or engineering office. These measures, if fully enforced, could complicate and add to the costs of owner-builder housing construction. They reflect the attitude that only professionals should oversee construction; while such may be correct for high rise blocks, for example, if applied to all construction there is a danger of seriously disrupting owner-builder housing activities.

CONCLUSIONS

In this review of owner-builder housing activities in Jordan, it is important to conclude with the certain main points:

Dominance of the owner-builder

It should be clear how important owner-builder housing processes are to producing housing in Jordan, including housing which can be affordable and appropriate for lower-income families. At least 70% of all housing units produced in the last 10 years are owner-built, and most of these have been constructed without formal contractors. Ambitious public housing schemes and programmes to encourage the corporate developer have not appreciably enlarged their share of total housing production, nor have they provided an alternative for lower income families.

Advantages of owner-builder housing in Jordan

From the point of view of the prospective owner, the main advantages of owner- builder housing over alternative systems in Jordan are:

13Not only has the good quality of lower cost owner-built housmg been documented in the JNHS, but various other studtes bear this out. See for example. Urban Development Project, Halcrow Fox, “Survey of D-Zoned Areas”, 1985.

14These projects fall under the IBRD’s First Jordan Urban ProJect and Second Jordan Urban Project. The Urban Development Department was set up as the implementer; it was originally under Amman Municipality but has recently taken on a national role as part of the Ministry of Municipal and Rural Affairs.

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first and foremost, the very significant cost savings, due primarily to the internalising of overheads and profits which must be borne by formal contractors and private developers; the progressive nature of the building process which allows an easier fit of expenditures with financial resources; the flexibility in the building process and end-products, which allows the owner to have the option of adding units either for married children or for sale or rent; the high degree of satisfaction with the end product, since the owner- builder is closely involved with design and quality-control during construc- tion and will personally select finishings; the ability to restrict dealings to those who are known and trusted or who are personally guaranteed.

~uu~ifier on disadvantages

It must be pointed out that there are certain disadvantages to relying on owner- builder housing in Jordan. First of all, the State finds it difficult if not impossible to tax the owner-builder and small contractor, and thus must forego revenues which would accrue if housing were handled by corporate developers and registered contractors. (However, at present Jordanian Government tax rates on these activities are very low.) Secondly, because owner-builder housing is a long process, sometimes taking several years from purchase of land to completion of all units in the structure, there can be said to be an inefficient use of public infrastructure as well as a less than optimum use of the owner’s own investments.

Furthermore, the owner-builder must invest considerable time and effort in organising and managing all aspects of house-building, and more time must be spent in educating himself in these matters. Thus it can be said that the owner- builder foregoes leisure and other pursuits in order to build. In other words, he does not gain the advantages without considerable sacrifice.

The owner-builder and ‘~i~for~fflity ”

In Jordan it should be clear that owner-building in itself is not informal, if by informal is meant extra-legal. Almost all owner-builders surveyed complied with planning and building regulations, had legal land titles. had designs signed by qualified engineers, and paid necessary fees. Even the widespread use of the master builder or muallim is not illegal, although one could argue that these master builders are avoiding taxes (but then, who does not?}.

If informality is taken in its economic sense (for example, as used by the ILOi5), with informal sector activities characterised by their small scale, simple technologies. and little capital, then yes, owner-builder housing in Jordan could be called informal, although one could argue that RC-frame construction and aluminium windows are not simple technologies. and that considerable family capital must be mobilised by the owner-builder. Also, the idea that the informal sector operates largely separate from the formal sector does not apply to owner- builder activities in Jordan; inputs such as land and materials come from the “formal” economy, and the housing product is recognised and pricable in the market.

Another meaning of informality results from economists’ frustrations at the lack of hard statistics on those who are self-employed; activities which cannot be adequately quantified or counted are lumped together into the “informal

“See for example IL0 Mission, “Employment, Incomes, and Equality: A Strategy for Increasmg Productive Employment m Kenya”. 1972, partly reproduced in, Leading Issues m Economic Development. Meler, G. (EdItor). pp 183-190. 4th edn, Oxford University Press. Oxford, 1984

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sector”. Owner-builder housing might well anger those who estimate national accounts, but as has been shown in Jordan, it is not a difficult or expensive exercise to come up with reasonable estimates of the number of units produced, their value, and even the employment generated.

In sum, it seems best to avoid the use of the concept of informality when talking about housing activities in Jordan. At best it is a confusing concept, and at worst it gives a pejorative connotation to owner-builder activities.

The owner-builder and “self-help”

If self-help housing is defined as owner-built housing with a significant direct input of unpaid family and/or community labour, then it can be said that in Jordan such a practice is almost non-existent. Even among low-income owner- builders surveyed by the Shelter Unit two-thirds used no family labour, and of the remaining one-third family labour was used mostly for minor activities, such as the transport of building materials, site organisation and clean-up, etc. This very minor family labour contribution may be partly due to the plentiful availability of foreign (mostly Egyptian) casual workers, but even so the conclusion holds that “self-help” is not an intrinsic characteristic of owner-built housing in Jordan. Mutual self-help activities, where building is a shared community effort, is unknown in Jordan, except in certain small villages.

What is appropriate policy towards owner-builder housing?

At the present time in Jordan perhaps the best policy towards the owner-builder housing process is simply to leave it alone. That is, control and regulation which would raise costs or complicate the process and therefore make owner-building less attractive to limited income families would best be avoided. Steps could be taken to improve marginally owner-builder housing processes, but it should be recognised that the fundamental strengths of the system exist in spite of rather than because of government actions. It should also be recognised that an incredible amount of housing is being produced by owner-builders with minimal State expenditures and minimal administrative effort.

Instead government intervention is best concentrated on removing the constraints which limit participation of many lower income households in the process. The two main areas of needed intervention are access to appropriate land and availability of credit, as has been stressed in the National Housing Strategy Study. The lack of small and legal plots on the real estate market which would be suitable and affordable to owner-builders is a very serious constraint in most Jordanian cities, and the JNHS devotes considerable efforts to tackle this problem. l6 Similarly there is a great need for better and more flexible credit mechanisms to finance construction (and even land purchase), especial1 for those who find it difficult to qualify for loans under existing programmes. 4;

These policy suggestions do not imply that owner-builder housing is the only proper way for lower-income households to house themselves. For example, there is ample room for private developers who aim at the lower end of the housing market; this is especially true for individual developers who build in much the same way as the owner-builder but who sell or rent some of the units through informal contacts. (These “individual” developers may be a rising phenomenon in Jordan.) Also. there is no reason to exclude public housing, at

16See Jordanian Ministry of Plannmg. JNHS. Techmcal Memorandum No. 10, “Residential Land Analysis” and Technical Memorandum No. 19. “National Housing Strategy: Residenttal Land Policies”, both 1987.

“See Jordanian Ministry of Planrung. JNHS. Technical Memorandum No. 14, “Housing Finance m Jordan”, 1987.

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least if any subsidies are explicit and reach those for whom the housing is intended.

RELEVANCE TO OTHER DEVELOPING COUNTRIES

Jordan is a relatively prosperous country and its housing problems are not as severe as in the majority of Third World nations. Furthermore, it has gone far in institutional and legislative development in the housing field, such as with mortgage banks, corporate developers. a functioning land registration system, municipal control of building permits, etc. Thus can what has been discovered about the owner-builder in Jordan have any relevance to larger, more typical developing countries?

It can be argued that the overwhelming dominance and vitality of the owner- builder in Jordan’s housing sector is all the more significant because it operates within a relatively modern context. It begs the question: how dominant are owner-builder activities in other countries? Are there. as in Jordan. a vital and heterogeneous set of actors without whom housing production, including the production of affordable housing, would be a much more serious problem? More fundamentally, what actually are the characteristics of the owner-builder in other countries, and can constraints to their activity in lower-cost housing be identified and removed?

In other words, there is a need in many developing countries for the owner- builder to be taken seriously both by those who set housing policy and by those who advise on it. Within a particular country there may be attitudinal biases against owner-builder housing processes, or simply ignorance. By studying the phenomenon as a normal economic activity and demonstrating its contribution to housing production, particularly its close fit with lower-income segments of the population, an important first step will be made in heightening awareness and reducing opposition.

Owner-builder housing has already been the subject of a multitude of studies, analyses and debate. But there seems to have been a tendency for it to fall under the rubric of “self-help” or “informal sector” housing, which implies to some a marginal activity of the disenfranchised poor which is separate from the formal market economy. It conjures up images of land invasions, illegality, deficient services, and shanty towns. It is no wonder that some Third World governments, in their pursuit of modernisation and legitimacy, have shunned the owner- builder, seeing his encouragement as leading to disorder and the creation of more slums. ”

In some developing countries the owner-builder has already been accepted as an essential agent in housing production. Yet in many others he is still frowned upon, and in these countries a recognition of the owner-builder needs to be brought into the mainstream of thought and policy. In short, the owner-builder needs legitimacy. The extent and nature of owner-builder housing will vary widely from one country to another, but if it can be shown, as in Jordan. that the owner-builder makes a tremendous contribution to the nation’s housing stock and is integrated into the economy, is not limited to the very poor. and need not

‘“In I981 a large study was commissioned by USAID to analyse Egypt’s mtormal houstng sector. The defmitton of “mformal” was ail houstng butlt etther wtthout legal land tttle or wtthout butldmg permtts. Desptte constderable good work - the hnding. for example. that tn 1976-1981 a full XOG of housing umts built m Greater Catro were “mformal” - the study was not well recetved by Egypttan offtctaldom and has had no effect on housmg poltctes Thts ts not surprtsrng. stnce no government like\ to admtt that thetr laws are commonly flouted and that they have lost control of urban development It was unfortunate that the illegahty defimtion of informal was used in the study. It did not help matters that “mformal sector” IS translated into Arabtc as “unorgamsed sector”. which contradtcts the Idea of government as the promoter and orgamser of development

Owner-Builder Housing in Jordan 135

be illegal, then perhaps governments will begin to treat the owner-builder as a valuable asset, one to be supported through a range of “enabling” programmes in housing credit and land provision.

Acknowledgements - The author IS grateful to the staff of the Shelter Unit of the Jordanian Mmistry of Planning, who devoted considerable effort to carrymg out and processing the results of the surveys upon which this paper is mostly based. Parttcular thanks are due to Suhail Medinat. Director of the unit, and to Mazen Farouka and Ahmed Rafiq. Opinions expressed here are those of the author and do not necessarily reflect views of the Jordanian Ministry of Planning.