“The fast-paced growth of African cities represents an opportunity for their hundreds of millions of citizens. Understanding which policies promote efficient real estate development by business is key to ensuring that these cities reach their full potential.”
– Tanner Regan
Rapid urbanization of Sub-Saharan Africa
Sub-Saharan Africa is experiencing rapid urbanisation, pressuring cities with limited institutional capacity. The operation of urban land markets in developing countries is critical to building sustainable cities.
Rising demand for housing
Inadequate provision of housing, a proliferation of slums and rising inequality are some of the challenges faced because of rapid urbanisation. In addition, many African countries suffer from weak institutions and governance as a legacy of their colonial history.
This research aims to study how urban planning regulations – often a colonial remnant – can affect housing outcomes, social inclusivity and inequality in Tanzanian cities.
The team have two main research aims. First, minimum plot size restrictions are common in Africa, but their effects are understudied. These restrictions may create inefficiencies, as plot sizes may not reflect demand, and exacerbate inequalities, as large plots may be unaffordable to the poor. The researchers study demand for plots – both overall and by socio-economic group – in the Tanzanian government’s formal “20,000 Plots” project. They use regression discontinuity design to identify the effect of different plot sizes and analyse the externalities exerted by plots of different sizes.
Second, private provision of urban and town planning in Tanzania was severely limited until recently due to government restrictions. The researchers contrast the private sector’s approach to providing formal plots to that of the government and study the implications.
Methodology and design
The methodology uses within-project and project-border discontinuities. Specifically, the research team study differences in outcomes across plot sizes within projects. Additionally, they contrast public and private developments with each other (where they are adjacent) and with neighbouring informal areas. Semi-parametric regression discontinuity design within and across developments will be used to identify causal effects.
Tanner's journey through Tanzania
The headquarters of Land General – a private survey and town planning company based in Dar es Salaam, and responsible for planning tens of thousands of plots each year around Tanzania. Until recently the government held a monopoly over the urban planning services that Land General specializes in. To lower costs and increase supply the government opened these services to the private sector, and many businesses are starting to enter and compete.
Kimara – an unplanned and informal settlement on the outskirts of Dar es Salaam.
Tanner and the field survey team during previous fieldwork in Dar es Salaam, 2019. The survey team is composed of students from Ardhi University and has worked together on multiple projects with Tanner and co-author Martina Manara over the years. During the course of this project the team will be responsible for surveying property owners from the “20,000 plots” project areas.
The potential impact
Scaling of solutions
Through pre-emptive urban planning the government can signal public investment and encourage coordinated private investment in land.
Further, getting pre-emptive urban planning exactly right is important: plots that are too large, or that overregulate land use can lead to lackluster real estate investment, low built density and sprawl. If planning instead matches demand, it can foster sustainable urban density and the productivity and amenity benefits that come along with it.
This research seeks to promote evidence-based practices and enable the scaling of solutions by the nascent private sector of urban and town planning companies in Africa. Findings from this research have the potential to identify effective business solutions, impact policymakers, and ultimately lead to large-scale and enduring change.
About the author
Tanner is an Assistant Professor of Economics and International Affairs at George Washington University and a former Research Fellow in Economics at London Business School. He has a PhD from the London School of Economics and Political Science and holds an MA and BSc from the University of Toronto. He is affiliated with the Institute for International Economic Policy at GWU, the Centre for Economic Performance at LSE and the Wheeler Institute for Business and Development.
Tanner’s research focuses on the economics of housing, land tenure, urban planning, and property tax in developing country cities. He uses tools from applied micro and experimental economics, and a combination of satellite imagery, primary surveys and administrative data.