How Akufo-Addo intends to address the housing deficit in his second term

Business News for Wednesday, September 16, 2020

Source: Business 24

2020-09-16

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One of Ghana’s long-standing socio-economic challenges is the availability of affordable and decent housing for all citizens.

The Center for Affordable Housing Finance in Africa estimates in the 2019 Housing Finance Yearbook that Ghana has a housing deficit of more than 1.7 million housing units. This is not far from State Housing Company CEO Kwabena Ampofo Appiah’s projection that for every Ghanaian who owns a home, the government will have to build two million houses.

This challenge is compounded by other factors such as land litigation, high construction costs, and demand for medium and long-term rentals, placing financial constraints on many tenants. The myriad of challenges has led the New Patriotic Party under the leadership of President Akufo-Addo to propose certain measures in its manifesto for the 2020 elections. The objective of these measures is to address barriers to the acquisition or rental of housing in the country .

A key measure is the National Rental Assistance Plan (NRAS). The immediate objective of this plan is to address short and medium term market failures in the renter segment of the housing market. Through this scheme, the government will prepay the rent of people with verifiable sources of income directly to the bank accounts of the owners. Then the individuals will repay the money to the government on a monthly basis.

This intervention is expected to remove the burden of rent advance from the shoulders of many Ghanaians. It will also guarantee a predictable rental income for owners. In addition, the government will be able to track rental income and apply applicable taxes.

Over the years, the government has been unable to keep track of landlord-tenant transactions and thus has lost tax revenue that could fall to the state. This new scheme will have a 360 effect for owners, tenants and the state, contributing to the progress of the country.

Furthermore, the NPP acknowledges in its manifesto that Ghana’s housing deficit is “particularly severe for low-income households.” The Party is committed to building low-income housing for the next four years. They intend to make use of local materials and collaborate with the Building and Roads Research Institute (BBRI), as well as private developers. The land banks are already in place and the homes built will be available for rent, rent-to-own or outright purchase.

To advance the housing delivery agenda, the PNP plans to establish two new bodies. First, the Ghana Housing Authority. This authority will be responsible for improving the legal and regulatory framework, creating land banks, providing infrastructure and standardizing housing. Second, the National Housing and Mortgage Financing Company will administer the Housing and Mortgage Fund established in the 2020 budget, provide incentives to allow the private sector to build housing communities / units and create jobs in the process throughout the country.

Under the leadership of President Akufo-Addo, the PNP intends to expand the capacity of the State Housing Company to lead the efforts of the government together with the private sector to build large affordable housing estates for the workers and families of Ghana. . Meanwhile, the government is committed to completing all housing projects started by previous administrations, as well as new projects started and yet to be started by the government.

The Real Estate Investment Trusts (REITs) will be sponsored and promoted as vehicles for rent-to-own schemes, private sector mortgage finance companies and mortgage-backed securities. In addition, the 2008 Mortgage Financing Law (Law 770) will be revised to simplify foreclosure processes. The Pensions Law will also be amended to allow pension funds to invest more than 5% of their portfolio in real estate assets.

By implementing these measures, the Akufo-Addo administration will significantly address the housing deficit over the next four years.