How can the mismatch in housing supply be addressed?

As Rwanda’s urbanisation continues to gather pace, researchers in the housing sector have called for fresh efforts to address several challenges hindering the provision of affordable housing for low-income households and the gap between demand and supply.

Dr Aime Tsinda, a senior research fellow at the Institute of Policy Analysis and Research (IPAR-Rwanda), said the constraints emanate from the high rates of urbanisation and population growth as well as absence of proper monitoring.

Tsinda outlined the cost of imported building materials, inadequate evaluation of public housing policies as well as lack of easy access to land and other housing inputs among the other constraints.

With most housing demand coming from among low-income earners, there is a mismatch between demand and supply in housing in Kigali, he noted.

According to the researcher, a study on “Housing Market Demand, Housing Finance and Housing Preferences for the City of Kigali”, conducted by Planet Consortium in 2012, estimated that the annual demand for new dwellings were 31,279 housing units per year against the supply of about 1000 units.

“There is a gap because there is an annual deficit of about 30,279 dwelling units,” he said.

The researcher says that there is need of subsidised housing facilities through commercial banks, incentives like tax holidays for investors, as well as more products in regard to mortgage and housing loans.

There is also need for tax exemption on construction materials, especially for big construction projects, he added.

“Facilitating the acquisition of affordable materials and equipment which are environment friendly, mobilisation of private investors to build affordable housing, and establishment of affordable housing financing scheme are some of the interventions that should be given priority,” he told Business Times.

There are still major challenges in delivery of low-cost housing in Rwanda considering limited building technologies, high cost of financing and topographical constraints and high cost of building materials for both investors and property developers.

Appropriate technologies

Experts have recommended the identification and introduction of appropriate construction technologies in the construction of low-cost houses that are both of good quality and affordable by relying on Made-in-Rwanda materials such as adobe blocks, mud-bricks, compressed earth blocks (CEBs), iron bars, roofing materials, and cement.

“There is need to attract more companies that make construction materials that help people to build houses quickly and in an affordable way. We need to invest in research and promote local building materials and traditional technologies to cater for modern housing requirements for low-income households,” Tsinda said.

“Entrepreneurs wishing to go into the production of local building materials should be encouraged through tax relief and other incentives. Constructing by ‘going up in height’ will allow for valuable land value to be realised and cope more effectively with the growing population,” he said.

To address these issues, experts highlight the need for the establishment of affordable housing financing schemes as a tool which can also act as an incentive to private sector.

Regina Mukamusinga, the Senior Manager for Social Project and Infrastructure at Development Bank of Rwanda (BRD), said there is need to review factors that make housing project costs go high.

“If the affordable housing scheme was in place, the interest rate would also be reduced to make housing projects more affordable. The cost of land, construction materials, finance and housing technology are the main factors that make the housing project costs high and should be looked into by different stakeholders,” she said.

Need for win-win for all  

Vincent Rwigamba, the acting Urban Planning and Development Division Manager at Rwanda Housing Authority, said the housing challenge in Rwanda requires a win-win situation between clients and developers to be addressed.

“We have many stalled housing initiatives but you wonder what went wrong and why we didn’t implement them. We have talked to developers on the importance of lowering the cost but the concerns on how to lower the cost remains,” he said.

For instance, he said, there was an issue of a developer who wanted to lower the cost but, in the end, developed substandard units.

“This is not really desirable on the market; he was forced to stop the project to upgrade the substandard houses. We do not want facilities that can cause fatal accidents in the future,” he said.

Others say the Government can be a mediator between people who have land and developers so they can develop desirable housing units.

They suggest that, for instance, land owners can avail plots of land and developers avail money and then both partner in building affordable house units with agreements on revenue generation and sharing.

editorial@newtimes.co.rw

 

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