This document discusses formal and informal land markets in Tanzania, using Dar es Salaam as a case study. It outlines that most people in Dar es Salaam access land through informal means due to bureaucratic formal processes. Common informal methods include land invasion of idle land or informal transactions between buyers and sellers. Land value in Dar es Salaam is affected by location and infrastructure access, with higher values closer to the city center. The document also examines challenges like insecure land tenure and a lack of coordinated land information and mapping. Improving land administration systems and increasing access to land information are proposed as strategies to address these issues.

1. FORMAL AND INFORMAL LAND
MARKET

2. INTRODUCTION
LAND IS DEFINED AS ANY PART OF THE EARTH'S SURFACE NOT
COVERED BY A BODY OF WATER; THE PART OF THE EARTH'S SURFACE
OCCUPIED BY CONTINENT, ISLANDS AND AREA OF GROUND WITH
REFERENCE TO ITS NATURE OR COMPOSITION.(WIKIPEDIA)
LAND MARKET CAN BE DEFINED AS THE TRANSACTIONS INVOLVED IN
THE SUPPLY AND DEMAND FOR LAND IN WHICH BUYER COME INTO
CONTACT AND MAKE TRANSACTIONS (MATTINGLY, 1993 IN DEVAS
AND RAKODI, 1993)

3. INTRODUCTION CONT.
FORMAL LAND MARKET
THIS INCLUDES FORMAL OR LEGAL PROCESS IN ACQUIRING LAND
THAT CONFORM TO THE STATUTORY PROCEDURES. URT (1999)
INFORMAL LAND MARKET
THE INFORMAL SYSTEM OF ACCESSING LAND IS CHARACTERIZED
BY FORMS OF LAND TENURE THAT DO NOT CONFORM TO THE
STATUTORY PROCEDURES. URT (1999)

4. CHARACTERISTICS OF LAND
MARKET
• LAND MARKET TAKES PLACE DUE TO PRESENCE OF
DEMAND AND SUPPLY FOR LAND IN THE MARKET
• LAND MARKETS INVOLVES MECHANISMS, ACTORS,
PROCESSES AND PROCEDURES FACILITATING AND
REGULATING LAND USE DELIVERY
• FIXITY MARKETS FOR LAND (IMMOVABLE ASSETS)

5. Factors affecting demand for
Land
• Disposable income
• Rapid increase in population
• Availability of financial institutions i.e.
Banks
• Age and household size and structureFACTORS AFFECTING SUPPLY FOR LAND
• PRICE OF LAND
• AVAILABILITY OF LAND

6. LAND MARKET SYSTEM
LAND MARKETS IS CLASSIFIED INTO FORMAL AND INFORMAL LAND
MARKET
FORMAL LAND MARKET
THIS INCLUDES LEGAL PROCESS IN ACQUIRING LAND THAT CONFORM
TO THE STATUTORY PROCEDURES.
FOR EXAMPLE IF A PERSON WANTS TO OBTAIN LAND FORMALLY THEY
NEED TO SUBMIT AN APPLICATION FOR THE ‘RIGHT TO OCCUPY’ TO
THE DISTRICT LAND OFFICER. KOMBE (1995)

7. CHARACTERISTICS OF FORMAL
LAND MARKET
• MAINLY CATER FOR THE HIGH INCOME GROUPS OF THE URBAN
POPULATION
• LAND INFORMATION LIKE AVAILABILITY OF LAND, WHERE AND AT
WHAT PRICE? UNDER WHAT CONDITIONS CAN IT BE ACCESSED?
• WHO CAN ENTER THE LAND MARKET-LOCALS, FOREIGNERS,
CHILDREN-UNDER WHAT CONDITIONS CAN ONE RESALE LAND
HE/SHE HAS BOUGHT?

8. ACTORS IN FORMAL LAND MARKET
1. MINISTRY OF LAND
2. LOCAL GOVERNMENT
3. HOUSING DEVELOPERS
4. LAND BUYERS
5. PRIVATE SECTORS
6. CBO'S AND NGO'S.

9. CHALLENGES FACING FORMAL
LAND MARKET
• POOR LAND ADMINISTRATION AND REGISTRATION SYSTEMS
• LAND APPLICATION AND ALLOCATION PROCESSES
• HIGH TRANSACTION COSTS

10. INFORMAL LAND MARKET
IT IS CHARACTERIZED BY FORMS OF LAND TENURE THAT DO NOT
CONFORM TO THE STATUTORY PROCEDURES.
FOR EXAMPLE DUE TO THE BUREAUCRATIC PROCEDURES, HIGH COSTS
AND LONG DELAYS INVOLVED WITH THE FORMAL SYSTEM, MOST
PEOPLE OBTAIN LAND THROUGH INFORMAL SYSTEMS. KOMBE (1995)

11. INFORMAL LAND ACCESS PATH
AND ACTORS
Source :( Kombe, 1995)

12. CHARACTERISTICS OF INFORMAL LAND
MARKETS
• LAND TRANSACTIONS TAKE PLACE WITHIN THE FRAMEWORK OF
PRIVATE AGREEMENTS
• MAY BY-PASS FORMAL INSTITUTIONS AND EVADE TAX-LOCAL AND
CENTRAL GOVERNMENT
• IGNORE FORMAL URBAN DEVELOPMENT PROCESSES INCLUDING
LAND USE PLANNING SUBDIVISION STANDARDS ETC. - LEADING TO
CONFLICTING LAND USE DEVELOPMENT
• LACK CENTRALIZED AND RELIABLE SYSTEM OF PROPERTY
REGISTRATION.

13. A CASE STUDY OF DAR ES SALAAM
TANZANIA

14. DAR ES SALAAM ACCOMMODATES 29% OF TANZANIA’S URBAN
POPULATION. ALMOST 65% OF PEOPLE LIVING IN DAR ES SALAAM
LIVE IN INFORMAL SETTLEMENTS.
MOST OF THESE SETTLEMENTS HAVE GROWN IN THE PERI-URBAN
AREAS WHERE FARM LAND SURROUNDING THE CITY HAS BEEN
INCORPORATED INTO THE CITY STRUCTURE WITHOUT PLANNING.
A case study
cont.

15. A CASE STUDY CONT.
IN 1994 OVER 70% OF PERI-URBAN HOUSEHOLDS IN TANZANIA
ACCESSED LAND EITHER THROUGH INHERITANCE OR THROUGH
ALLOCATION BY THE VILLAGE GOVERNMENT. ONLY 27% BOUGHT
LAND. HOWEVER, BY 2001, 78.9% OF HOUSEHOLDS WERE BUYING
LAND IN PERI-URBAN AREAS AND ONLY A MINORITY WERE ACCESSING
IT THROUGH INHERITANCE OR VILLAGE GOVERNMENT ALLOCATION.

16. A CASE STUDY CONT.
RECENT THE OVER 80% BOUGHT LAND AND VERY FEW ACCESS
THROUGH INHERITANCE AND OTHER FORMS. THIS CHANGE WAS,
IN PART, INFLUENCED BY CHANGES IN GOVERNMENT LAND
POLICY AND THE STIMULATION OF URBAN LAND MARKETS.
KIRONDE (1994)

17. FORMAL ACCESS TO LAND
IF A PERSON WANTS TO OBTAIN LAND FORMALLY IN DAR ES SALAAM
THEY NEED TO SUBMIT AN APPLICATION FOR THE ‘RIGHT TO
OCCUPY’ TO THE DISTRICT LAND OFFICER. THE DISTRICT LAND
OFFICER FORWARDS THE APPLICATION TO AN ALLOCATION
COMMITTEE OF THE MINISTRY OF LANDS OR REGIONAL AUTHORITY
FOR A DECISION. KIRONDE (1994)

18. INFORMAL ACCESS TO LAND
GIVEN THE BUREAUCRATIC PROCEDURES, HIGH COSTS AND LONG
DELAYS INVOLVED WITH THE FORMAL SYSTEM, MOST PEOPLE IN DAR
ES SALAAM OBTAIN LAND THROUGH INFORMAL SYSTEMS, AS
DESCRIBED BELOW.
LAND INVASION
SOME PEOPLE IN DAR ES SALAAM, ESPECIALLY IN INFORMAL
SETTLEMENTS LIKE KEKO, ACQUIRE A SITE THROUGH ILLEGALLY
OCCUPYING IT WITHOUT A PERMIT OR OTHER TRANSFER
DOCUMENTS. KIRONDE (1994)
(STARTS WITH AN IDLE LAND)

19. INFORMAL LAND TRANSACTIONS
THE MOST COMMON WAY IN WHICH LAND IS ACCESSED IN
UNPLANNED AREAS OF THE CITY IS THROUGH INFORMAL LAND
TRANSACTIONS. THE SELLER AND BUYER STRIKE A DEAL IN THE
PRESENCE OF WITNESSES SUCH AS FRIENDS, RELATIVES OR
COMMUNITY LEADERS. THE TRANSACTION IS REGISTERED WITH A
LOCAL LEADER OR THE LOCAL BRANCH OF A POLITICAL PARTY.
KIRONDE (1994)

20. THE FACTORS DETERMINE VALUE
OF LAND AND RATE OF RENT IN
DAR ES SALAAM.
• LOCATION OF AN AREA
• PERSONAL RELATIONSHIP BETWEEN THE BUYER AND SELLER
• THE TYPE OF LAND TERRAIN OF THAT PARTICULAR AREA
(TOPOGRAPHY)
• THE INTENDED USE OF HOUSE
• PHYSICAL INFRASTRUCTURE
• ENVIRONMENTAL CHARACTERISTICS

21. LAND MARKET IN EVERYDAY LIFE
THE APPLICABILITY OF LAND MARKET IN OUR LIFE IS BEING
APPLICABLE SYSTEM FOR BOTH RURAL AND URBAN AREA BECAUSE IS
THE MAJOR SYSTEM IN WHICH PEOPLE USE IN ACQUIRE LAND.
THIS IS EXPLAINED BY LAND RENT THEORY WHICH STATES THAT AS
ONE MOVES TOWARDS THE CBD THE RENT/PRICE FOR LAND
INCREASES AND DECREASES AS ONE MOVES AWAY FROM THE CBD AS
IT SHOWN IN THE GRAPH;-

22. FIGURE: VON THUNEN LAND RENT
THEORY
According to Von thunen, Land-rent theory (1826).The models
shows how the demand and hence price for land changes with
distance from the central business district (CBD).

23. BASIC PRINCIPLES OF LAND RENT
Source; William Alonso, 1964

24. BASIC PRINCIPAL CONT.…
IT ASSUMES A CENTRAL BUSINESS DISTRICT WHICH REPRESENTS THE
MOST DESIRABLE LOCATION WITH A HIGH LEVEL OF ACCESSIBILITY. THE
SURROUNDING AREAS, WITHIN A RADIUS OF 1 KM, HAVE A SURFACE OF
ABOUT 3.14 SQUARE. UNDER SUCH CIRCUMSTANCES, THE RENT IS A
FUNCTION OF THE AVAILABILITY OF LAND, WHICH CAN SIMPLY BE
EXPRESSED AS 1/S. AT ZERO DISTANCE THE RENT IS THE HIGHEST;

25. BASIC PRINCIPAL CONT.…
AS WE MOVE AWAY FROM THE CENTRE THE RENT/PRICE DROPS
SUBSTANTIALLY SINCE THE AMOUNT OF AVAILABLE LAND
INCREASES EXPONENTIALLY. THERE IS MORE LAND AVAILABLE TO
BID ON, SO IF THE SUPPLY GOES UP, THE PRICE USUALLY GOES
DOWN.

26. BASIC PRINCIPAL CONT.…
NOTE: THE APPLICATION OF LAND RENT THEORY HAS A MISS
MATCH TO MOST OF THE DEVELOPING COUNTRIES
TANZANIA BEING ONE OF THEM.
THIS IS DUE TO UNPLANNED SETTLEMENT WHICH CONFLICT
WITH THE CONCEPT/THEORY OF LAND RENT.

27. MAJOR LAND ISSUES IN TANZANIA
MAJOR LAND ISSUES IN TANZANIA ARE:
• LACK OF ADEQUATE SECURITY OF TENURE FOR MAJORITY OF
RURAL AND URBAN PEOPLE.
• ABSENCE OF ADEQUATE AND COORDINATED LAND
INFORMATION.
• ALSO INADEQUATE HUMAN, INSTITUTIONAL AND
INFRASTRUCTURAL CAPITAL IS ONE OF THE STANDING ISSUE TO
MOST OF THE SOCIETIES.
• HIGH TRANSACTION COSTS.

28. STRATEGIES FOR DEALING WITH
LAND MARKET:
• PROVISION OF LAND INFORMATION
• RURAL, VILLAGE AND URBAN TOPOGRAPHICAL MAPPING FOR
DIFFERENT HUMAN ECONOMIC ACTIVITIES.
• URBAN AND RURAL LAND USE PLANNING, DEMARCATING LAND
FOR DIFFERENT USES.
• CADASTRAL SURVEYING OF URBAN PLOTS AND FARM PARCELS
IN THE VILLAGES.
• TITLING AND REGISTRATION OF URBAN AND VILLAGE LAND
PARCELS.

29. CONLUSION
THERE IS ACUTE SHORTAGE OF QUALIFIED AND EXPERIENCED
TECHNICAL AND PROFESSIONAL STAFF SUCH AS LAND
SURVEYORS, VALUERS, LAND OFFICERS, TOWN PLANNERS
ESPECIALLY IN LOCAL GOVERNMENT AUTHORITIES.
MAPPING IS CRITICAL TO LAND DELIVERY AND LAND USE
PLANNING. YET ITS AN AREA WHERE THE GOVERNMENT OF
TANZANIA AND MOST DEVELOPMENT PARTNERS DON’T WANT
TO VENTURE BECAUSE IT IS COSTLY.

30. REFERENCES
• KIRONDE, J.M.L. (2001) PERI-URBAN LAND TENURE, PLANNING AND REGULARIZATION: CASE STUDY OF DAR ES SALAAM,
TANZANIA.
• KIRONDE, J.M.L. LUSUGGA (1994), “THE EVOLUTION OF THE LAND USE STRUCTURE OF DAR ES SALAAM ARDHI INSTITUTE, DAR
ES SALAAM.
• KOMBE, W.J. AND KREIBICH, V. (2006); GOVERNMANCE OF INFORMAL URBANISATION IN TANZANIA, MKUKI NA NYOTA
PUBLISHERS, DAR ES SALAAM, TANZANIA
• KOMBE, W.J. AND KREIBICH, V. (2000) FORMAL LAND MANAGEMENT IN TANZANIA, SPRING RESEARCH SERIES NO.29,
DORTMUND.
• KOMBE, W.J. (1995) FORMAL AND INFORMAL LAND MANAGEMENT IN TANZANIA, SPRING RESEARCH SERIES NO.29,
DORTMUND.
• KOMBE, W.J. (1994),”THE DEMISE OF PUBLIC URBAN LAND MANAGEMENT AND THE EMERGENCE OF THE INFORMAL LAND
MARKETS IN TANZANIA: A CASE OF DAR ES SALAAM.
• NKURUNZIZA, E. (2007) ‘INFORMAL MECHANISMS FOR ACCESSING AND SECURING URBAN LAND RIGHTS: THE CASE OF
KAMPALA, UGANDA’.
• MABOGUNJE, AKIN L. (1990), PERSPECTIVE ON URBAN LAND AND URBAN MANAGEMENT POLICIES IN SUB-SAHARAN AFRICA,
WORLD BANK, WASHINGTON DC.
• UNITED NATIONS HUMAN SETTLEMENTS PROGRAMME (UN-HABITAT) AND URBAN LANDMARK, 2010, URBAN LAND MARKETS:
ECONOMIC CONCEPTS AND TOOLS FOR ENGAGING IN AFRICA
• UNITED REPUBLIC OF TANZANIA. (1997) LAND POLICY OF TANZANIA. GOVERNMENT PRINTERS. DAR ES SALAAM.
• UNITED REPUBLIC OF TANZANIA. (1999) LAND ACT OF TANZANIA. GOVERNMENT PRINTERS. DAR ES SALAAM.
• SUZANA S. 2013, LAND TENURE REFORMS AND INVESTMENT IN TANZANIA. M.A. (ECONOMICS) DISSERTATION UNIVERSITY OF
DAR ES SALAAM.

31. END
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