Affordable housing: No answers in sight

Kampala.

More developers have entered into the real estate space trying to bridge the housing deficit. However, according to experts, majority of Ugandans still cannot access affordable and decent housing.
According to the Uganda National Housing Policy, affordable housing is associated with costs that do not threaten other basic needs and represents a reasonable proportion of household income.
Developers have in the past been building houses in excess of Shs500m. In 2016, Knight Frank managing director, Ms Judy Rugasira, told guests at the Buganda Investment Forum in Kampala that attempts to provide better housing had been made but prices were still out of reach of many Ugandans. Prices, she said, had been rising between 10 to 15 per cent annually.
Shelter Afrique managing director James Mugerwa, said then 90 per cent of Ugandans can hardly afford to buy a home. And this has almost stayed the same even to today despite the fact that more developers have entered the market.
Decent housing remains a dream for many, which according to Mr Sam Mabala, the commissioner for human settlement in the ministry of Lands, could be explained by the high levels of unemployment.
“The high levels of low income earners cannot afford adequate housing however low [it might be],” he said at the weekend during an Innovations Series conference organised by PR firm Brainchild Burson-Marsteller.
One key challenge is the growing value of land for housing which is pushing up the cost of construction.
Many Ugandans are buying land progressively and mobilising construction materials to build overtime.
However, Mr Mabala said this is unsustainable and the effect has been spilling into other towns outside Kampala.
“Overtime, land has to be procured outside the boundaries of gazetted urban areas, subdivided and put on the market, much as it may look affordable, in real sense it is quite costly because infrastructure provision in some of those areas are a nightmare,” he said.
For the working class, the biggest challenge has been the lack of sufficient resources that they can used to make a down payment or a deposit on the property.
However, banks have been innovating around such challenges through provision of mortgages that can make a 100 per cent payment on a property.
However, according to Mr Mathias Katamba, the managing director of Housing Finance Bank, the uptake of mortgages remain at less than 10,000, which is quite low.
Different developers have had to make do with how the market determines rates even when their target was to provide low cost and affordable housing.
“In Uganda, we are living a life of uncertainties. Somebody is on this job but does not know where he will be next time. We do not have a minimum wage so people in Uganda do not want to take those risks,” Mr David Kyewalabye Male, the managing director of Buganda Land Board, said. Twenty per cent of Uganda’s land has been surveyed, indicating that not many Ugandans own land titles.
Mr Mabala, however, said much as one might mobilise money to get a mortgage to buy a decent home, they will be required to have collateral.
If government moves fast on opening 21 zonal offices to process titles, Mr Mabala said, increasing the number of people who own titled land will increase the number of people who can own affordable homes.