Rental Housing: A legitimate method for stemming the housing deficit in Africa

Rental Housing: A legitimate method for stemming the housing deficit in Africa
James Mugerwa, Managing Director Shelter Afrique

For the longest period we in the housing industry have called for governments across Africa to lower the interest rates; we have called for governments to better regulate the real estate industry and show more interest. We have made these calls because we believe the dream of home ownership is one that should and can be realised by all.

The housing deficit in Africa is a yawning one; the housing deficit in Ghana is estimated to currently stand at 1.7 million units and with a population boom that could see the country host 35 million by 2030, an estimated 170 Thousands units will be required in Ghana over a ten year period.
Going nearby to Nigeria the housing deficit is estimated to be 17 million units annually and an expected population boom that will see the country become the world’s third most populated country ahead of the United States by 2050, the deficit is billed to double.

We can cast a gaze across the borders to other economic hubs in the Sub-Saharan region and the story is much the same; in Kenya the deficit is estimated at 2 million units with an estimated 150000-200000 units annually required to bridge that gap. Kenya will also experience a demographic shift along with the rest of Africa; it is expected that 60 percent of the Kenyan will be living in urban centres by the year 2020.

If these numbers reveal anything at all, it is the fact that we can no longer assume that home-ownership is the only way to bridge the gap and provide affordable housing for all.We must begin to address the fact that the housing deficit in Africa has to be approached with various solutions and Rental Housing is one of them; it is not entirely new, certainly in North America, Asia and Europe there are homes that are leased with the option to buy and several other tenant purchase schemes; we can design the same schemes here in Africa, schemes that speak to country specific trends and market trends.

There is a cultural limitation when we begin to approach the issue of Rental Housing; automatically we are conditioned to think that this is an inferior option as we have all grown up with the notion that owning a house is the ultimate accomplishment and measure of success and while that may be, we have to acknowledge that a large majority of Africans live in rental houses as unfortunately financing for home ownership is not nearly universal and where it does exist, it isn’t affordable.

One of our mandates at Shelter Afrique is to provide affordable housing for all Africans and ultimately make housing finance and mortgages cheaper to access and indeed it is a challenge we pose to all African governments but we will be the first to admit that we are not quite there yet and while we continue to work on making finance cheaper and accessible we must acknowledge the reality that rental housing is prominent on the continent.

If we acknowledge the rental housing sector as a legitimate option then the question becomes what have we as a continent done or what are we currently doing to make sure that it is properly regulated and that it plays a bigger role in reducing the housing deficit in Africa?

The answer to that is precious little; and that is why over the last two years we have hosted two rental housing conferences in Nairobi and Ghana with our partners Agence Francaise de Developpment and  the Ministry of Water Resources, Works and Housing ,Ghana. The conclusions and recommendations from these conferences are helping shape our advisory to governments and helping us develop a product specifically for rental housing.

Rental Housing is just one of the many areas we have addressed over the last three years as we continue in our quest for affordable housing solutions; we recently turned our attention to social housing because we know that demand is most apparent at the middle-low income bracket , we can proudly mention the Rugarama Integrated Housing Project in Rwanda which we have over 1000 affordable homes and the Karibu Homes project in Kenya which will have over 1000 affordable units.

Beyond Rental Housing we have also been championing the use of alternative building technology and materials because we believe it will have a direct impact on the cost of construction; which in turn will have a direct effect on the cost of rent.

We believe that a multi-pronged approach is what is needed to solve the housing deficit in Africa and as we make our case for rental housing we should also highlight the benefits; it offers great flexibility, the ability to choose housing that better fits the family budget, and the freedom from responsibility for home maintenance.

In making these arguments for rental housing we must also acknowledge that the rental housing sector currently has limits as well; there is no defined legal framework; there are no tenancy laws that detail the agreements between lessor and lessee and recourse or redress for aggrieved lessee’s who more often than not are subject to arbitrary increases in their rent prices.

We acknowledge these limits but we are still confident that rental housing can be a legitimate method to stemming the housing deficit; It doesn’t and it shouldn’t take away from the dream of home ownership, we want to create awareness on an area we feel has long been neglected but has massive potential to bridge the housing deficit for all Africans”

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