Governance structures for real estate transactions: Markets, networks and hierarchies in Windhoek’s urban low-income settlements

Abstract

This article examines the relative prevalence of markets, hierarchies and networks in the governance of real-estate transactions under three property rights regimes in Windhoek’s low-income settlements. These governance structures are related to respective property rights regimes and to conjectures made about the implications for capital accumulation for the urban poor. It is found that network governance structures are the predominant modes of organising transactions under conditions of informal property rights, while hierarchical mechanisms predominate in the freehold and group categories. It is found that there is very little secondary market activity in all three rights categories. The article posits that, while networks provide access to real estate for the poor under conditions of informal rights, these are associated with tenure insecurity, and lock households in clusters based on ethnicity and kinship. Hierarchical structures, on the other hand, make freehold ownerships possible for the poor, but suffer from insufficient scale and create market distortions. It is concluded that a lack of secondary market activity in all the three rights categories severely limits the potential for capital accumulation.