A Necessity Turned Luxury: The search for roofs over our heads

Housing, too, is one of our main preoccupations. We are at this moment in the last stages of formulating large-scale housing projects, which we hope to have ready soon. A factory for prefabricated concrete units is now under construction and will come into production sometime this year. When these plans are completed, we shall be able to put up low-cost housing to meet the needs of our working people at the rate of two hundred houses a month. This should go a long way to offset the pressing housing problem

-Kwame Nkrumah, during a presentation of his 7-year development plan in Parliament on 11th March, 1964

The United Nation’s Sustainable Development Goal (SDG) 11 is pursuing a global action to make cities and communities sustainable through the creation of good, affordable public housing, and upgrade of slum settlements, among others. Ghana is part of this global action and that is why under phase II of the Ghana Shared Growth and Development Agenda (GSGDA), there is a human settlements policy to ensure that all human activities within our cities, towns and villages are undertaken in a planned and spatially determined manner in order to bring about equity and enhance socio-economic development. In line with this agenda, the Town and Country Planning Department designed the Ghana National Spatial Development Framework (NSDF; 2015-2035) to provide strategic vision for spatial development of the country over the next 20 years (APR, 2015).

The World Health Organisation (WHO) defines housing as a concept embracing the interconnected elements of home (household), dwelling (house/flat), community (cohesiveness of people living, working and serving within the vicinity), and neighbourhood (public services, malls, places of worship, etc.). Abraham Maslow, the famous psychologist, recognized housing (shelter) as one of the basic prerequisites for self-actualization. Post-independence governments have underscored commitments to improving delivery, affordability and accessibility of decent housing in Ghana. These have found expression in several housing policies which took cognizance of the ripple effect of decent housing on the mental, physical and social well-being of citizens.

Provision of decent housing became imperative more so because the colonial authorities ignored that provision for Ghanaians in general, focusing on only foreign staff and senior local civil servants in the public service. Only well-off Ghanaians who could build to the standards and specification of a “European style” house were given access to lands to build. Between 1964 and 1966, following our independence and republican status, government introduced a socialist public housing policy with the aim of giving houses in Ghana the desired refurbishment; a newer, better and more pleasant look whilst maintaining the traditional sense of community. Subsidy packages, loans and housing programmes evolved from this policy. A cumulative low-cost housing stock of 11,752 was harvested from the policy within three years (the Tema Development Corporation delivered 10,700 housing units; State Housing Corporation (now company) delivered 1,052 housing units). The life of this housing policy was however short-lived as it was truncated after the ousting of Dr Nkrumah’s government in 1966 and replaced by a capitalist-oriented policy from 1969-1971.

During this period, subsidies and other forms of self-help incentives for housing were discontinued as a result of policy shift to private sector participation. This policy was a year short of its predecessor. Government again took primary responsibility for housing provision in the subsequent years (1972-1979). Through reduction in building costs, promotion of local building materials and low-income housing, close to 7,400 housing units were provided. From the 1980s to the early 1990s, the housing sector was liberalized, whittling down state involvement particularly through the establishment of the Home Finance Company (HFC). It was a justifiable move on the grounds that the manifest failures of State housing institutions outweighed the noble intentions for their creation. For instance, the State Housing Corporation delivered an average of 415 housing units per annum for over 50 years of operation, representing less than six percent of national housing need (Boamah, 2014).

What needs restating is that succeeding governments recognize the deplorable state of housing in Ghana that required fixing. Intentions to solve the problem, which were translated into policy instruments and strategic interventions of mainly socialist flavor, were defeated by corruption, nepotism and waste.

With the private sector leading the housing provision agenda, profit became the superordinate aim surpassing considerations of access to the conceptualized definition of housing by WHO. What private Real Estate Developers and government (Social Security and National Insurance Trust) started out as “affordable housing” eventually became unaffordable and inaccessible to the bulk of Ghana’s working class. Since the focus now turned on the upper and middle classes, the impact of private sector participation in housing provision could not reach the working class. This remains the case to date. Thus, it is this deficit which gave the informal sector the stimulus to get fully into the rental accommodation business, delivering massive impact within a short period of time. Whilst the formal sector delivers only 2,500 housing units at its peak, the informal sector delivers 30,000 units every year (Akuffo, 2006). However this came with exploitation and at great inconvenience, to the working class.

The face of Ghana’s Housing Deficit

About two months ago, I had a sober reflection on how our housing deficits has drawn out the rapaciousness of some landlords in the country, all in an unbridled pursuit of abnormal profits. This was occasioned by an account from a friend of mine called Charles (name changed). Charles comes from an extremely poor household. His father could not fund his education, so he had to terminate schooling at Form Two in Junior High School. The economic circumstances in his family was terrible such that he had to leave his family in the Volta region for the capital city, Accra where he hopes to better his economic prospects. He spent several years under apprenticeship before eventually moving on to establish his own tailoring business. Charles is working extremely hard to get out of poverty. When Charles moved on to start his business, he had to cough up thousands of cedis to make a 2-year rent advance payment for his shop and house respectively; in a day, many years of his savings was reduced to nearly zero. A 2-year rent advance is illegal (the 1963 Rent Control law, Act 220, clause 25 (5) states that landlords should not charge rent advance beyond six months) but Charles was compelled to pay because there are no alternatives, and effective mechanisms to seek redress.

Typical House Prices in Accra

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The annual per capita income of the average Ghanaian is GHS 5,347. All things being equal, it means that for the average Ghanaian to afford a 1 bedroom (semi-detached, expandable), he or she will have to work for at least 14 years; a 2 bedroom house 18 years; and a 3 bedroom house 27 years. But drastic changes in the prices of goods and services as a result of taxes, dollar-cedi dynamics, economic hardships is a constant in cities such as Accra and Kumasi. Thus, access to credit and house loans (mortgages) are critical mediating interventions to raise capital for home purchase. Unfortunately close to 90 percent of urban dwellers are disadvantaged by their poor income status in accessing loans; they cannot obtain the needed amount required as collateral (GLSS (6); pg. 167).

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Home ownership is more prevalent in the rural areas. These are mostly properties that have been handed down from one generation to the other, and tend to lack the aesthetic qualities of preferred housing. Rural-urban migration is among factors which have contributed to the imbalance between ownership and renting. 41% of Accra’s 2.6 million inhabitants are living in rented homes (apartments), 23% are living in houses without paying any form of rent and less than 1% are perching in kiosks or sleeping by the roadside.

Ghana's Parliament on the State of Housing

I am aware that the Ministry of Works and Housing has come out with some measures to help address the housing deficit. The issue of tax relief to the housing fraternity is an issue worth noting and we would have to take a closer look at it to encourage them to put up a lot more houses for our people

- Mr. David T. Assumeng, MP for Shai Osudoku | 16 July, 2013

Mr. Speaker, so far as there continues to be deficits, people would also make abnormal profits out of the situation. And how much do they pay to the Consolidated Fund out of these abnormal profits that they are making? So the rents are not realistic. People are cashing in just on the fact that we have housing deficits.

- Mr. Kwaku Agyeman-Manu, MP for Dormaa Central | 16 July, 2013

The housing deficit and its impact on the well-being of the working class has been extensively discussed in Ghana’s Parliament. The Hansard is replete with deliberations on the subject encompassing independent research information, constituency stories, government interventions, failure of government agencies and departments, and private sector participation. Though evidence suggest that Legislators agree on a bipartisan approach to the housing issue, moving forward with proposed interventions has been a challenge. In summary, the following aspects of our housing problem has been discussed on the floor of Parliament:

  1. High, unrealistic rents giving home owners the opportunity to take advantage of the situation;

  2. Inability of the Rent Control Department to enforce the rent control act;

  3. No budgetary allocations for affordable housing by the Rural Housing Department in the Ministry of Water Resources, Works and Housing;

  4. Government sponsored housing projects has been on and off. For instance, phase II of the construction of 368 housing unit for the security services has been ongoing for the past three years without any sign of completion;

  5. Struggling local private housing delivery system as a result of lack of tax exemptions.

Proposals for tax reliefs to the local private sector, use of local materials, and rent control law enforcement have been made as captured in the Parliamentary Hansards. However attempts to deliver affordable housing has been frustrated by almost the same factors that impeded state housing provision in the early 90s and 2000s.

Conclusion

People like Charles will still look up to political leadership to address the housing challenge, because the private sector is single-handedly incapable of delivering affordable housing and housing finance to the informal sector and low-income households. Also obvious is the fact that affordable housing cannot be provided in the face of corruption, crony capitalism, greed, mismanagement and lip-service.