Where is the affordable housing?
Successive governments have over the years attempted to activate affordable housing schemes to provide shelter for citizens as part of their development agenda.
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The concept of affordable housing,which was introduced in 2005 by the then New Patriotic Party (NPP) government, was part of interventions for the housing sector aimed at providing accommodation for the low to middle income earners who were mostly government employees.
The New Democratic Congress (NDC) also came into power to continue with its own version of affordable housing, but 11 years on, the scheme has failed to target the appropriate segments of the markets and the housing deficit in the country continues to increase; currently estimated at over 1.7 million housing units.
The menace of spiraling slums across the country casts a blur on whether the government has succeeded with its affordable housing project over the years.
Some of the projects have been completed while others are still ongoing. Currently the projects that are still in progress are at the following locations; Borteyman/Nungua, Kpone near Tema, Asokore-Mampong, Koforidua, Tamale, Wa and Prampram.
A report recently submitted to Parliament by the Ministry of Works and Housing outlines a five-year strategy to reduce the problem of housing shortage. The strategy seeks to facilitate the flow of resources to the housing industry; accelerate home improvement; improve the environment of human settlements; encourage greater private sector participation; and make shelter programmes more accessible to the poor.
How affordable is affordable?
Housing units which are being described as affordable are going for US$29,000 for a two-bedroom unit and US$57,000 for a three-bedroom. These units meant for low and middle income public, civil servants and security service personnel,are clearly out of their range.
A look at policies of the government shows the desire to encourage investments in real estate, and review the government's record in the provision of public housing. This is because public sector houses attract attention, being high evidence of low income, but sadly, most public servants cannot afford.
Most of the homes in Ghana are privately owned and financed; however, public sector housing policy dominates issues relating to the housing situation in Ghana.
In 1990, of the 32,402 housing units delivered in urban areas (comprising all types of houses), 32,129 housing units were privately owned. The homes were financed mainly out of personal savings of the owners constituting roughly 75 per cent of private home owner-ship financing.
Some of the government’s affordable housing units under construction
Private sector to the rescue?
Since Ghana gained independence, the responsibility of the provision of houses in Ghana had mainly been left to systems of government and semi state owned organisations to provide houses for the workers. In 1988 Consistent with the then Government's policy of private participation with particular reference to housing development, the Ministry of Works and Housing invited Real Estate Developers to a series of meetings, at the Ministry in February 1988.
As a result of these meetings, the Ghana Real Estate Developers Association (GREDA) an Association of Real Estate Developers was established. Members at that time had very little experience of Real Estate Development and comprised contractors who had been building houses. It is a non-profit making organisation and functions as a private entity.
The cost of GREDA housing unit ranges from US$12,000 for 1-bedroom to US$49,000 for a 4-bedroom house, and this is also clearly out of the range of most Ghanaians.
Way forward
The government is its 2016 Budget Statement said it has allocated GHC1.42 billion to the Works and Housing Ministry for the completion of 1,502 housing units in 2016. Again, 4,702 affordable housing units are slated for construction in Greater Accra, Ashanti, Northern, Upper West and Upper East regions.
The present concept of affordable and low-income housing as implemented by Ghana has become a hardly sustainable fit for the continent ,by not investing time to target appropriate segments of the population, governments should change their approach to affordable housing to make it much more affordable and sustainable.
Housing finance is a huge problem in the Ghanaian economy, given the generally very low annual average income of workers. However, in the wake of financial liberalisation, policies should be promoted to encourage the establishment of financial institutions whose business would be solely mortgage finance to help boost the acquisition of houses in Ghana.