Housing: Government urged to partner with private developers

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A view of Vision City estate under construction in Gacuriro. (Sam Ngendahimana)

Experts have urged government to work with private developers to fix the challenge of affordable housing in the country.

According to the experts, government is spending a lot of resources on feasibility studies, research and project expropriation instead of working with the developers to bring affordable units on to the market.

Charles Haba, the director of Century Real Estate, and chairman Rwanda Real Estate Developers Association advised government to buy housing units from developers instead of wasting money on projects that have not even materialized.

He was speaking during the second edition of expert talk organized by KCB Bank Rwanda in Kigali last week.

According to Haba, working with private developers will help government save lots of money, and also address the current housing deficit in the country.

Government recently launched a new affordable housing fund that could enable persons earning between Rwf300,000 and Rwf700,000 in monthly wages to buy a house.

The fund due to start in July is estimated to cost between $200 million and $250 million (about Rwf206 billion).

The fund could be used to subsidize mortgage loans or directly provide funding to private developers at low interest rates.

Samson Muvuzankwaya, the in charge of affordable housing at the Rwanda National Authority said government is already supporting developers to bring to the market affordable houses.

The support includes availing land, basic infrastructure like road network, electricity, water supply, and waste management among other amenities.

“The Government is also supporting investors and local SME’s that want to establish large and medium scale material production plants with tax exemption on machinery and raw materials,” he noted.

Rwanda requires up to 344,068 housing units by 2020 to be able to meet the growing demand in the country.

Those at the forefront of developing these units have often been accused of inflating prices making the units unaffordable. Equally experts have also blamed banks for charging high rates on mortgages, which has further stifled the situation.

Banks not a problem

Beatrice Chege, the head of mortgage business at KCB Bank Rwanda said that the popular assertion that affordable housing is hampered by bank interest rates is not true.

She explained that the solution to affordable housing is therefore smaller, well-built and quality housing units but also developers who must place consumer’s needs at the heart of the projects.

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