How to address Uganda’s housing shortage problem

The Uganda National Housing Policy approved by the Cabinet in 2016, sets out the problem confronting the country’s housing sector plainly, if not unsettlingly, enough. 
A housing deficit totaling millions of housing units no less apparent in urban areas where difficult realities continue to intrude sticks out like the metaphorical sore thumb.

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While the policy put the deficit at 1.6 million housing units in 2016, Habitat for Humanity has since revised it to 2.4 million. The policy concedes that urgency and resources need to be allocated to address a deficiency of hundreds of thousands of housing units in urban areas. Yet as Ugandans rang in the new year nearly four weeks ago, it rarely occurred to any that the policy rather ambitiously set itself a target to “increase the production of adequate housing for all income groups from 60,000 to 200,000 housing units per annum so as to meet the housing needs by 2022.”
Evidently, like its immediate predecessor—the National Shelter Strategy (NSS) of 1992—the policy has been and continues to be a paper tiger. The National Service Delivery Survey 2021 established that owner-occupancy in urban areas has less skin in the growth game. Standing at 55 percent, it pales in comparison to the same occupancy tenure in rural areas. The survey puts the latter at 89 percent.

“Kampala [with 67 percent] had the majority of households living in rented/subsidised dwellings,” the survey revealed, adding that “Lango Sub-region [with 95 percent] had the highest proportion of households with owner-occupied dwellings.”
The survey defines such a housing unit as “a building, part of a building or collection of buildings that is occupied by a single household.” It adds that “this is irrespective of the size of the household, building size or intended use.”
In which case, ownership—it can be argued with a certain degree of success—in rural areas is an underwhelming measure of housing development in the country. Rentership, which stands at eight percent in rural settings, perhaps gives better indication of the state of affairs.

Poor scorecard
In fact, Habitat for Humanity estimates that 900,000 housing units in Uganda are below par and in dire need of either an upgrade or a makeover. Its guesstimate that “there will be about 52 million people in the country with a housing deficit of about four million” by 2025 is informed by the low urban home ownership and widespread informal housing in Uganda.
Seen through a wide-angle lens, Uganda’s housing problem sits at the intersection of two of the biggest drivers of lack in the country—land in urban/peri-urban areas and patient capital. These especially inflict blows to low income earners.
Mr Allan Ssenyonga, who keeps his finger on the pulse of affordable housing initiatives in Uganda, bemoans the dearth of “any investors keen on low-cost houses” and “effective zoning laws.” A residential area can, he adds, “quickly morph into much-sought-after office space.”

“We are in a crisis,” Mr Zeno Othieno Owora, a realtor at Nyumbani Estate Managers, says of the state of affairs in both urban and rural areas. “We have a housing shortage.”
While Mr Owora concedes that the shortage in question is a “residual effect of the pandemic”, he hastens to add that “construction is not lucrative.” And hasn’t been so for a protracted period that clearly predates Covid-19. The pandemic merely exacerbated a long-standing problem, with the Uganda Bureau of Statistics’  (Ubos) most recent construction input price index putting the monthly year-on-year inflation for inputs of the construction sector at 7.7 percent last November. The recent spike in the cost of cement from Shs32,000 to Shs40,000 destroys at a stroke the thought that the outlook is improving.

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“The cost of construction in Uganda is prohibitively high,” Mr Owora told Monitor, adding, “As a country, we don’t pool capital.”
The realtor reckons Uganda keeps attempting to go against the grain by opting not to undertake construction of housing units “concertedly.” Since the annual inflation of inputs for specialised construction activities is punishingly high, with Ubos putting it at 10.3 percent for the year ending November 2022, middle- and lower-income groups have been left with a dwindling number of housing options.

Affordable housing
The National Social Security Fund (NSSF) has laboured to position itself as something of an antidote to what at any rate is a dysfunctional housing market in Uganda. The Fund has talked up its help-to-buy scheme headlined by a Shs1.4 trillion housing project President Museveni launched in Lubowa, Wakiso District, last year. The rent-to-own model will put up to 2,741 units on the market.
While this is at any rate a drop in the ocean, the Fund envisages providing up to 50 percent of Ugandans living in urban areas with decent and affordable housing by 2050. Critics, however, contend that the asking price for the cheapest properties set to shoot up at off-taker (Kyanja) and mixed use (Temangalo) projects are still a tad too high for a country whose GDP per capita is Shs3.3m.
The projects are certainly prohibitively high for John, who takes home a seven-figure salary. The white-collar worker once entertained the thoughts of acquiring a detached house surrounded by a yard and a garden for his children. Well into his 40s now, he is resigned to the fact that this is a pipe dream.

Upward expansion
Mr Owora chafes at John’s desire for a detached house, reasoning that it only succeeds in “making cities grow wider.” Outward expansions carry the unnecessary risk of exacerbating spatial inequalities. They have also gained notoriety for straining economies and natural resources. The time-honoured antidote—at least in Mr Owora’s book—is for cities in the country to spread upward.
The World Resources Institute proffered three consequences of unmanaged, lateral urban expansion in a 2019 study. Such expansion, the institute discovered, has the propensity for creating “greater inequality … economic stresses for the city as a whole … [and] environmental problems.”

Since upward expansion projects are a tough needle to thread, Mr Owora recommends pooling resources if not to spread risk then cushion against high construction costs. Ubos’ most recent Residential Property Price Index (RPPI) released last November revealed that the cost of constructing a residential property in Kampala surged from 7.6 percent to 14.4 percent over the past couple of years.
Mr Owora also reckons that there should be a “concerted effort to improve amenities” because “housing is about attendant features like education and problems such as transportation.” He says a dovetail will insulate cities from expanding widely and chaotically.
“Real estate solves a need, not a problem,” he told this publication, adding conclusively, “We can’t solve the [housing] crisis when we have too many structural problems.”