Rwanda’s housing development has not grown proportionately to the growth of cities and rapid urbanization being witnessed across the country. The annual housing demand is estimated at 31,279 housing units per year against the supply of about 1,000 units meaning that there is an annual deficit of about 30,000 dwelling units. With urbanization expected to rise to 35 per cent urban by 2024, the housing demand is further expected to rise in coming years. Despite numerous repeat calls for investors and property developers, not much progress has been made. While developers might have intentions to set up affordable housing projects, the cost of construction inputs has been rising steadily over the last few years. A 2018 study by Rwanda Housing Authority and the World Bank Group informed stakeholders that the maximum cost for a housing project is in the range of Rwf35M. Since then, prices of a majority of construction inputs have gone up considering that a majority of them are imported. A majority of inputs including cement are often imported which has an impact on the cost of the final product. In other instances, there have been supply challenges for materials such as has been the case for cement while in other instances, some construction materials such as locally made tiles have been said to fall below standards. This is also an element to look out for to ensure that affordability is not at the expense of quality and safety. Prices of real estate across the country have also gone up over time. As the cost of all factors of production go up, potential home owners are probably wrong for expecting the prices to come down. One way to bring down the costs would be to identify the greatest drivers of costs and incentivize them for developers in affordable housing projects. The intervention could also be in providing viable incentives that would bring in building technology that would reduce the cost of housing projects. While flats are the ideal housing projects, a majority of home new home owners continue to put up single bungalows. This also would use some incentives to encourage more people to consider the flats model. Firms involved in the production of construction materials could also use some incentives to bring down their cost of production and consequently final product. Incentives in the sector could be the long sought solution to bring to an end years of anticipation that have not borne much despite multiple projects promising affordable housing.
