Meeting Kigali’s housing demand: What role can the private sector play?

While urbanisation is among the main drivers of transformation of the African continent and in Rwanda in particular, urban housing supply continues to be a test to authorities, citizens and the private sector. For instance, with Kigali’s population projected to more than double from the current 1.6 million to 3.8 million by 2050, demand for affordable houses is rising faster than its supply with various studies showing that the city needs at least 20,700 housing units every year or 310,000 units by 2032. Rapid urban growth among other things involves building infrastructure with housing being a key component in response to rising demand. Experts say that catering for housing needs to all categories of the growing urban population is both a key challenge and a major economic opportunity for economic and social development. An artist’s impression of Isange Estate, a complex of three bedrooms and four bedrooms maximizing green areas located on Rebero hill. Photo: Courtesy. Private sector engagement and reliable developers are needed to fulfil the demand in the process providing both skilled and unskilled jobs, creating a demand for locally produced materials consequently driving economic growth. Among the responses by the government has been to put in place urban planning, housing and land regulation to set up ideal conditions for successful and sustainable urbanization. The Kigali master plan 2050 released in 2020 by the City of Kigali introduced new rules and paved the way for urban transformation. Among the aspects of the Masterplan is the establishment of provisions to prevent urban sprawl through apartments as opposed to the traditional bungalows. Experts note that this is expected to serve to tackle land scarcity and potential conflicts between agricultural use and residential use. Like other African cities, urban dwellers are progressively getting used to living on fewer square meters. The Kigali masterplan provides direction and clear goals for increased urban population density which will lead to major society transformations. David Benazeraf, the Managing Director of Imara Properties, a Rwandan based real estate firm currently developing Isange Estate in Rebero in Kigali said that new home owners have to admit the new realities such as apartments and smaller accommodation. The project also features its own plant nursery for the gardens and common spaces. Dan Nsengiyumva Isange Estate is a complex of three bedrooms and four bedrooms maximizing green areas located on Rebero hill. The construction started early July 2021 and is scheduled to be completed mid-2022. The project also features its own plant nursery for the gardens and common spaces. “Even though living in a standalone house is still common in Rwanda, the situation is evolving: in the coming years, more and more families will live in smaller accommodations, including in apartments. Rising costs of land and construction will make it inevitable. The Kigali master plan is already imposing small apartment blocks to meet density requirements in some areas. Ensuring social cohesion with a mix of functions and with vertical and horizontal incremental development is also promoted by the master plan,” he said. Benazeraf noted that the land tenure system which is transparent and fully accessible online brings confidence and security to land owners and investors establishing ideal preconditions for private sector involvement. “Safe UPI system is another driver for housing development and self-construction in particular. Medium-income categories of urban dwellers can safely construct their house in an incremental manner,” he said. “We took the risk to invest in this sector in Rwanda because adequate housing is a key driver for economic growth, for job creation, and for successful urbanization. Housing enables virtuous circles for sustainable development,” he added. Benazeraf added that addressing housing demand involves more than political vision and clear policies: the private sector has a role and a responsibility to play. He added that while some project failures in the past years could have previously affected the confidence towards real estate developers, the market has a growing number of professional developers. For instance, in Nairobi or Dar es Salam, self-construction is no longer the norm. Isange Estate is a complex of three bedrooms and four bedrooms maximizing green areas located on Rebero hill. Dan Nsengiyumva The entrepreneur noted that the ideal involvement of the private sector is also manifested in thorough project management with a good understanding of the local market, close collaboration with the banking sector facilitating access to mortgage finance, working closer with valuators to improve valuation of off-plan housing. In turn, he said that investors should also expect support from city authorities to obtain building permits and other necessary requirements. Edward Kyazze, Urbanization Human Settlement and Housing Division Manager at the Ministry of Infrastructure, recently noted that among ways the government has been working to increase private sector involvement is by offering land for free to investors and developing public private partnership projects are among the drivers of affordable housing. Workers at Isange Estate is a complex of three bedrooms and four bedrooms maximizing green areas located on Rebero hill. Dan Nsengiyumva

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Meeting Kigali’s housing demand: What role can the private sector play?