Vanuatu Affordable and Resilient Settlements (VARS) Project: Procurement of Land Development Policy, Legal and Marketing Advisory Services

Project Narrative

The overarching development objectives of VARS are to (i) improve access to and resilience of infrastructure and services in selected new and existing settlements, and (ii) strengthen land planning and management for resilient human settlement.

To achieve these objectives, VARS will develop a phased, ten-year, risk-informed Land Development, and Investment Strategy (LDIS) for the Greater Port Vila area, covering 40% of Vanuatu’s population. It will also prepare a five-year action plan to implement phased settlement upgrading (SURP) of the 23 existing informal settlements in the Greater Port Vila area. A series of pilots, alongside associated institutional and policy strengthening measures, will be necessary to support these aims and establish policy precedents. These include:

(a) basic area upgrading of four informal settlements (Ohlen Mataso, Seaside, Tokyo and portion of Anamburu);

(b) developing a 10 ha ‘sites-and-services’ (greenfield) lower-middle income residential area subdivision;

(c) expansion or rehabilitation (as required) of off-site infrastructure focusing on flood management and mitigation; and

(d) implementing measures for transformative institutional capacity strengthening of responsible Government of Vanuatu and sub-national (local government) agencies for planning, financing, and implementing the 10-year LDIS and 5-year SURP in partnerships with communities and the private sector.

Key services provided

The Procurement of Land Development Policy, Legal and Marketing (LDPLM) Advisory Services specifically supports the greenfield development, by directly supporting the efficient and affordable supply of resilient housing in low hazard, peri-urban areas.

It is estimated that some 1,170 ha of new serviced land in low-hazard areas will be required to meet the residential and supporting land use requirements of Great Port Vila residents by 2030 – and approximately two thirds of this (900 ha) will be required by low- and middle-income earners. Preparatory studies have shown land is available, however there are significant bottlenecks in the housing value chain– with the population experiencing significant rental stress, absent master and local planning and no clear responsibility for land consolidation and infrastructure provision of infrastructure to accommodate the needs of the rapidly growing city.  New land development in Greater Port Vila, therefore, is almost entirely private sector led. The time and costs of registering a land leases, obtaining development consent, and securing land development finance are onerous due to the inconsistent subdivision regulations, unclear and inconsistent public/private cost-sharing principles applied to financing off-site (trunk) infrastructure costs in new subdivisions, and arcane land administration and development consent processes.  Between 1996-2020 only 4,100 new residential lots were approved in Greater Port Vila – an average of only 170 new lots per year.

The result has been dispersed and unregulated subdivisions and growth of informal or unplanned settlements, in many cases on high hazard risk land and far from public utility networks including water and power supplies.  In 2020, the typical sales price of residential lots in approved subdivisions in 2020 was an affordable VUV610,000 (US$6,100) but 44 percent of the lots sold did not have a water supply and 37 percent had no power supply.

These and other risks act to deter Vanuatu’s active property developers and construction companies – including kastom landowners – from undertaking new subdivisions with infrastructure affordable by low- to middle-income households. As a result, approved private sector land development and subdivision currently targets high income households, with varying and inadequate levels of infrastructure provided by developers. Housing units on small plots affordable by households on the minimum wage are not currently available on the private market.

Under the VARS Project Component 1 (Affordable and Resilient New Settlement Development), the MoLNR is implementing a mixed land use development of 10ha Government land at Etas, Shefa Province. Although MoLNR is primarily a land administration authority it is acting as land developer at Etas as an interim approach and wishes to practically demonstrate to profit and non-profit private sector developers (including kastom landowners) in Vanuatu that it is economically, environmentally, and socially feasible to undertake commercial subdivisions that are affordable by lower-middle income earners and meet the standards required by the national Subdivision Policy.

The purpose of the assignment is to provide specialist policy, legal and marketing assistance to MoLNR to achieve this objective and to document the precedents set.  The consultant will also provide feasible options and milestones for GoV to prepare and adopt a policy on the roles and responsibilities of public and private sectors in land development, and on the government ministry/public agency most appropriate to have primary responsibility for development of public (government) land. Technical assistance will also provide review and offer business model advice to non-profit developers including the VNPF and Vanuatu Teachers’ Union, and, recognizing the dual kastom and formal nature of land ownership, investigate the feasibility of forming community (village) trusts under the Strata and Community Title Act as another potential partner for land development at Etas.