Rental Housing- A legitimate method for stemming the Housing deficit in Africa

The housing industry for a long time called upon government to regulate the real estate industry as well as show interest to ensure that people achieve the dream of home ownership.

The housing deficit in most African countries is a yawning one; For instance, the housing deficit in Uganda is estimated to currently stand at 1.6 million units and with a population boom that could see the country host 42 million by 2020, an estimated 8 million units will be required in Uganda.

Casting a gaze across the borders to other economic hubs in the Sub-Saharan region and the story is much the same; across the border in Kenya the deficit is estimated at 2 million units with an estimated 150000-200000 units annually required to bridge that gap. Kenya will also experience a demographic shift along with the rest of Africa; it is expected that 60 percent of the Kenyan will be living in urban centres by the year 2020.

Going further afield to West Africa, in Nigeria the housing deficit is estimated to be 17 million units annually and an expected population boom that will see the country become the world’s third most populated country ahead of the United States by 2050, the deficit is billed to double.

If these numbers reveal anything at all, it is the fact that we can no longer assume that home-ownership is the only way to bridge the gap and provide affordable housing for all. We must begin to address the fact that the housing deficit in Africa has to be approached with various solutions and Rental Housing is one of them; it is not entirely new, certainly in North America, Asia and Europe there are homes that are leased with the option to buy and several other tenant purchase schemes; we can design the same schemes here in Africa, schemes that speak to country specific trends and market trends.

There is a cultural limitation when approaching the issue of Rental Housing; automatically we are conditioned to think that this is an inferior option as we have all grown up with the notion that owning a house is the ultimate accomplishment and measure of success and while that may be, we have to acknowledge that a large majority of Africans live in rental houses as unfortunately financing for home ownership is not nearly universal and where it does exist, it isn’t affordable.

Mr. James Mugwerwa, the Managing Director of Shelter Afrique, one of the companies that supports real estate development with the mandate to provide affordable housing for all Africans and ultimately make housing finance and mortgages cheaper admits that indeed housing is a challenge to all African governments in the face of rental housing which is by far prominent on the continent.

"If we acknowledge the rental housing sector as a legitimate option then the question becomes what have we as a continent done or what are we currently doing to make sure that it is properly regulated and that it plays a bigger role in reducing the housing deficit in Africa?" He says

Shelter Afrique in association with their partner Agence Francaise de Development thus will be hosting a Rental Housing Conference in Nairobi in October to chart a new course for rental housing. The conference will for the first time bring together, government officials, private industry players, financial institutions and civil society organisations to seriously address the issues the rental housing sector faces.

In tackling rental housing, Shelter Afrique recently turned their attention to social housing due to the high demand by the middle-low income bracket and to that end they signed a USD 9M financing deal with the NHCC here in Uganda.
Shelter Afrique have also been championing the use of alternative building technology and materials to ensure a low cost of construction which in turn will have a direct effect on the cost of rent.

Mr Mugerwa believes that a multi-pronged approach is what is needed to solve the housing deficit in Africa and as we make our case for rental housing we should also highlight the benefits; "it offers great flexibility, the ability to choose housing that better fits the family budget, and the freedom from responsibility for home maintenance." He adds.

However, rental housing sector currently has limits as well; there is no defined legal framework; there are no tenancy laws that detail the agreements between lessor and lessee and recourse or redress for aggrieved lessee’s who more often than not are subject to arbitrary increases in their rent prices. An issue that Mr. Mugerwa says can be solved by creating awareness and this will be achieved by the RentalHousing Conference due in October in Nairobi