Improving the nature of residential housing: strategies for better low income housing in Uganda

Ronald Buye, African Rural University

The quality of residential housing is strongly determined by income, in any given society. By 2012, Uganda was facing a backlog of 1.6 million housing units (currently standing at about 1.3 million units), with most (84%) of the 6.2 million poor houses being temporal dwellings. Most of Ugandans in the urban areas have challenges accessing affordable houses due to low incomes. This limits ability to own and rent a better living place.

In the previous years (1970s and 1980s), housing policy implementation has been hampered by political instability. The country targeted at ensuring housing for all by 2000 through the National Shelter Strategy adopted in 1992, with recognition that collective efforts were necessary in solving the housing problems in the country.

While the Uganda National Housing Policy has evolved and is still evolving since independence, with the government coming up with various strategies and policies to improve the poor residential housing situation, more efforts are needed in order to solve the current residential housing challenges.

Reasons for affordable housing challenges

Some of the factors that could be blamed for lack of affordable housing among middle-income earners in Uganda include developers targeting “wealthy and well-connected elites.” While many low-income earners in Uganda are employed in the informal sector, housing finance is largely accessed by wealth private sector.

Delivery of affordable residential houses in places like Kampala is being hampered by lack of affordable home financing solutions, high costs of infrastructure, and rising costs of land.

Strategies for solving affordable housing challenges

With many of the housing developments falling under the local government as a result of Uganda’s use of decentralization as one of the models of allocating resources, it is necessary for the government to “identify tasks best done at a decentralized level and those  that  can  be  best  done  by private  house  provide.”

To improve the situation for low-income earners, the government through the Ministry of Lands, Housing and Urban Development in Uganda should also work with other stakeholders.

Uganda must consider a policy that considers housing markets, how resources are allocated to housing, and the impact of government’s regulation and actions to access of affordable and adequate housing for low income earners.

A national housing policy must be drafted to focus on participation of different stakeholders in the housing sector. The policy must highlight on demand and supply of houses in major urban areas in the country, and contain realistic goals.

Since the quantity and quality of houses in urban areas is part of the challenge, stakeholders must consider the cost of providing residential houses in view of their demand and ability to pay for low income earners. A good affordable housing system model should focus on policy, planning, design, financing and partnerships.

In order to spur the private sector into providing house solutions to the low-income earners in the country’s urbans the government should implement incentive-based strategies such as tax discounts for developers of middle-class and low-income housing projects.

It should consider encouraging low cost residential housing projects by targeting areas where development of houses is low in cost; consider Micro-mortgage options to low-income groups through community groups and NGOs – this allows people to become home-owners and can successfully be implemented if supported by “three pillars” of the “affordable housing cycle” that include public/private development incentives, community training programs and; customized low-income mortgage products. In addition, a formal planning for suburban communities can absorb city urbanization and draw many people from city slums.

Who to learn from?

China

Finally, the Uganda government can learn a lot from the China induced housing programs already underway in China; Cheap Rental Housing (CRH); program; the Economical and Comfortable Housing (ECH) Program and the Housing Provident Fund (HPF) Program.

Under the Economical and Comfortable Housing (ECH) Program, the local municipal government allocates land where developers build houses accessible for ownership by lower-middle-and middle-income families at reduced prices (controlled by the government).

In China, employers and employees are made to contribute a certain percentage (initially 5%) of the employee earnings into a housing saving program (Housing Provident Fund (HPF). Employees, through this program, then get low cost mortgages to purchase homes.

Under the Cheap rental housing program, “low-income households with housing difficulty” can rent houses at controlled rent rates and access rent subsidies if they rent private houses and a further rent reduction if they live in public rental houses.

United States

Affordable housing program by the US government such as the Low Low-Income Housing Tax Credit Program (LIHTC) that offers tax credit to developers targeting low-income groups; and The Housing Choice Voucher Program (HCV) program where Public Housing Agencies (PHAs) assist very low-income earners to rent houses by paying part of the rent.

Original research done by Ronald Buye; Here is a Link to main/full research by Ronald Buye, MA Ethics and Public management and Lecturer at African Rural University.

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