Owning a home is one dream that is becoming more difficult to achieve for the average Rwandan as the real estate and construction industry are targeting high-income earners.To reverse this trend, policymakers have come up with the concept of "affordable housing” that is designed to enable middle and low income earners to own houses.However, building on the concept has remained a challenge as it largely exists on paper a couple of years after it was coined and now people are left wondering how affordable are the "affordable housing.”The 2012 study of Housing in Kigali indicated that an average modern bungalow that a middle-income earner would ideally own costs about Rwf70 million in the city.The average take-home salary for the middle-income earners ranges from Rwf200,000 to Rwf600,000 and with ever-increasing cost of living, the Rwf70 million house is out of equation for the majority in this bracket.Banks have mortgages, but the conditions are not as favourable as they appear.Under the mortgage arrangement, any person who acquires a loan should pay at most 30 per cent of their monthly income. This implies that for one earning Rwf600,000 to acquire a home worth Rwf70 million under the mortgage arrangement, it would take 32 years to fully own the home.

Mortgage in Rwandan banks is acquired against an interest rate that goes up to 20 per cent. The rates vary according to the bank.This would not be as bad if the banks are willing to wait 32 years. The most generous commercial banks have a maximum re-payment period of 20 years.ShortageThis scenario, in addition to the rapidly growing City of Kigali, has created a shortage of houses, with policy makers, government, urban planners and the private sector scratching their heads for a solution.Asked about the drawbacks to putting up affordable housing in Kigali, the Chairperson of the Institute of Real Property Valuers in Rwanda, Egide Gatsirombo, cited the cost of construction materials."As long as the demand for posh houses is still high, developers will always rush for that category since that is where they reap big. If you consider the cost of land and construction materials, houses will definitely be expensive,” he said said.In his estimates, an affordable house should range from Rwf20 million to Rwf25 million, which is not attractive considering the minimal profit range.As an alternative, Gatsirombo suggests using more affordable construction materials or refurbished structures made out of wood.There are countries, mainly in the West, that have houses largely built using wood that have withstood the test of time. While they are durable and low on maintenance, they are a hard sell for the Rwandan people who prefer the strong brick and are not willing to settle for anything less."Those are the kind of structures that we need to adopt, but when you are doing an investment you need to meet the expectations of the consumers; before we venture into wooden houses, we need to know if indeed Rwandans would buy them,” said Gatsirombo.Charles Haba, the president of the Real Estate Association of Rwanda (Rear), said investors can make money off the affordable houses, but only if they put up a substantial number of houses at a go."To make money from low-end houses, you need to produce mass; this requires a chunk of land, and then rolling out infrastructure such as water, power and roads become more expensive since you are covering a vast area. This is why developers opt for middle-level houses to make quick profits,” Haba said.He added that since the cost of infrastructure is borne by the developers; they tend to pass it on to the final owner of the house, making it more expensive. "If government made the first move, it would bridge the (housing) gap and investors would venture into affordable housing,” Haba said.Social housing refers to housing which may be owned or constructed by government and sold or rented to citizens at subsidised rates.Government’s partAs a way of curbing the housing burden, government intends to remove incentives entitled to estate developers of high-end estates and instead accord it to developers with prospects of investing in more affordable houses.The incentives will include easy access to land, connecting developers to commercial banks for credit financing as well as tax incentives on construction materials and projects.Usually, high end developers, who invest more than $1.8 million, pay a flat tax of 10 per cent, but with the scrapping of incentives, the developers will pay several taxes and the best deal they would have is investing in affordable houses.  Since 2008, only two estates that could benefit the middle class have been put up. They include the 250 low cost houses in Batsinda in Gasabo District that were built in a joint effort of City of Kigali, Rwanda Social Security Board and former Rwanda Housing Bank.The other estate is a 42-apartments in Palm Estate, recently constructed by Ujenge Developers. An apartment in the estate ranges between Rwf28 million and Rwf45 million.The Director-General of Rwanda Housing Authority (RHA), Ester Mutamba, said construction of affordable houses requires huge investments.She said government is currently working out strategies that would trigger investors’ appetite in affordable housing."We are currently conducting research exercises to identify how and where cheap and quality construction materials can be found within the country. The result of these studies is to attract investors into affordable housing since one of the concerns has been the cost of construction materials,” said Mutamba.As part of the alternative strategies, RHA is considering hydraform technology-built houses which are more affordable and faster to construct. If the hydraform deal goes through, government will have to contract developers to put up estates of three-stored buildings that are considered cost-effective.Mutamba also said that another alternative that RHA has put into consideration is the use of stabilised earth bricks that are stronger, cheaper and environmental friendly.As part of solving the infrastructure roll out concerns, RHA has embarked on creating awareness about the benefits of condos and apartments. High demandA housing market study report prepared by the City of Kigali and financed by the European Union indicates that the formal housing market, as it is currently operating, supplies around 1,000 units per year, but the city will demand around 31,000 units every year.The 2013 report, titled "The Kigali Housing Market–Investor Brouchure,” estimates that between 2013 and 2018, about 17,280 units will be up and running, which represents an average of 1,234 units per year.The housing units, of which 28 per cent are apartments and the rest detached, will go into the formal housing of Kigali.Lillian Mupende, the director of urban planning and one-stop centre in the City of Kigali, said several initiatives were being considered by government to develop affordable houses and that so far, the City authorities have secured sites for the development."Studies are currently ongoing to come up with the most affordable, durable and quality houses. The issue of infrastructure rollout is also being looked at. We are considering cobblestone roads and use of biogas as some of the alternatives on the table,” said Mupende.She said one inevitable approach that urgently needs to be explored is putting up apartments and condominiums to reduce the pressure on the land."Apartments stand out as the best option. In an apartment, there is an increase in density but reduction on the cost of land, infrastructure and resources are easily distributed,” said Mupende.To achieve this, there is need to change the mentality of an urban population that still fancies a home with a yard and separate quarters for house helps.