Affordable Housing

The term ‘affordable housing’ was first used in the 1937 Housing Act of the US seeking to provide direction in addressing the challenges facing especially low-income earners on getting onto the housing ladder. Since then it has become entrenched, popularly defined as a ratio measure thus; expenditure on housing either in rentals or towards ownership should not exceed 30% of income.

The 30% benchmark is widely used all over the world and Ghana recently also adopted this yardstick as stated in the 2015 National Housing Policy. Being a ratio measure, it has always created ambiguity since affordability is indeed relative. 

However, for convenience, the business environment especially real estate lenders and home finance companies jumped onto it for use as the reference point for assessing the mortgage capacity of potential home-buyers. As a result, instead of seeking to drive the agenda for policymakers to focus their minds on especially addressing the housing needs of low-income earners, the term when used in housing discourse has often highlighted ambiguity in the issue of relativity. Accordingly, when used in connection with housing delivery, it has now become nebulous, generating tangential debates, as currently happening in the country.  

Social Housing

SOCIAL HOUSING is to deliver and provide housing at below market rent for low income earners.  Unlike affordable housing, social housing is not subject to market forces but operated as a welfare scheme. The concept has long been recognised as integral to welfare societies since the post-war era.

In this context, three main political welfare schemes can be identified; the social democratic welfare scheme, the corporatist welfare scheme and the liberal welfare scheme. In the western world, Sweden and most Scandinavian countries will be perfect example of societies practicing the social democratic approach where the state is heavily involved in catering for the housing needs of all citizens. Alternatively, countries in continental Europe, for example Germany, Austria and Italy practice what could be likened to the corporatist approach where the state is fairly active in housing provision, targeted at those who genuinely need help.

The contribution of NGOs in delivering social housing is very much encouraged in the corporatist approach to support Government efforts. The US and UK are perfect examples of countries using the liberal approach which involves strong market orientation.  In the liberal approach the focus is rather on encouraging private companies to see to the welfare needs of their employees – using housing as a social wage. The state only provides limited support for identifiable low income earners. All said, it must also be mentioned that, one perfect system does not exist out there and most countries tend to operate a hybrid system.

The Netherlands is an example of a country that operates a hybrid form of social democratic and corporatist social housing scheme. Also, while the UK for instance has been placed in liberal category, there is some resemblance of corporatist approach as currently about 17% of the population live in houses provided by Housing Associations and NGOs (Chartered Institute of Housing, UK report). What then is the situation in Ghana?

A critical observation suggests that Ghana is practising something akin to the liberal approach where housing has been left to market forces.  In principle, employers are expected to take care of the housing needs of their employees.  However, in Ghana very few companies have been able to do this, mostly focusing on senior staff and top management. Employees in the low income bracket such as middle level and junior staff are often left out.

The Government being the single largest employer has in the past also largely used housing as a social wage for employees. However, in the recent decades, the Government has not been able to sustain this effort. Above all, there is no scheme whatsoever for the larger low income workers who constitute about 80% of the active working force. Thus, Ghana has for several years been practicing a variant of the liberal welfare scheme and yet failing to target the people who most need low income housing.  For failing to target low income earners, one might as well conclude that, Ghana has no clearly defined social housing system running currently.

Changing the Narratives

It is true that urban housing is open to market forces and hence subject to demand and supply condition. Nevertheless, all over the world housing is also seen as a social need and generally approached as a welfare issue.  Even the most capitalist economies of the world have heavy welfare involvement in the provision of housing especially to the larger population on low income. However in Ghana, the welfare component of housing is not clearly articulated leaving doubts as to what is really the philosophy of Government in housing supply.

First of all, unlike many other countries including some in sub-Saharan African economies, Ghana has not been bold enough to expressly make provision of HOUSING a right in the constitution. This suggests that Ghana Government does not really see housing as a welfare issue.  Within this context, it is safe to assume that, perhaps Ghana Government has always seen housing as a matter of convenience and something that it has no obligation to deliver to the populace. Since independence all the subtle attempts towards housing supply has targeted the Government workers who constitute just a fraction of the active workforce of the larger Ghanaian population both in the formal and informal sectors

In 1988, the Malaysia Government in its Vision 2020, pledged to construct 800,000 low income houses.  They stayed on course and delivered 859,480 houses, that is, exceeding the target by 59,480 houses. In the same year 2020, Ghana is rather having a heated debate on scandals and non-performance relating to housing projects comprising  more or less a mere 5000 house-units.

In fact, in 1995 Ghana also launched its own version of Vision 2020 but there is little more than a few thousands to show for that. Data reported in the GHANA HOUSING PROFILE also suggests that between 1957 and the year 2009, the total number of so called affordable housing delivered by successive governments is 54,526 (UN-Habitat, 2011, page 163). Sadly, the period between 2009 to date has also not seen any enviable effort. Yet, right here in Africa, Angola built 70,000 between 2011 and 2013.  Between 2005 and 2011, Ethiopia also built 171,000 house-units while Namibia’s target by the year 2030 is 185,000.  Indeed, between 1994 and 2018, over 3 million houses have been built by the South African Government and 580,000 of these houses were added just in the last five years, between 2015 and 2018.

Generally the housing development approach of sub-Saharan African Economies have followed international policy directions beginning from the 1950s to 60s when most Governments practiced the interventionist approach. However, most countries did not have the patience to follow through this paradigm, which may be attributed to the unstable political environments prevailing then.

Then came the era of site and services and the slum improvement approach in the 1970s-which also did not work as expected. Then came the 1980s with World Bank Support of Housing finance which was deemed to help in addressing the situation. The 1990s came with the enabling environment approach which Ghana also spear-headed. Thus over the years the housing development approach has been one of a shift from involvement in direct supply to supporting policies and practices in creating an enabling environment for the private sector to thrive.

However, as we all know the policies are having very little impact resulting in rather massive backlogs. Notwithstanding the challenges, however it is clear from the above that some sub-Saharan African countries are showing tenacity and embarking on some massive flagship projects. The question is why not Ghana. For heaven’s sake Ghana is the shining star in Africa, the first black African Country to gain Independence. Ghana is thus a leader on the continent and should be seen in keeping up the pace. Given that Ethiopia, Namibia, South Africa and Angola are making some headway, surely Ghana should be able to do same and perhaps, do more.  

In the long term the way forward is for Ghana to target an ambitious agenda of delivering one (1) million houses by the next decade. That would surely be a heavy boost to the economy in various ways including job creation and more importantly begin to engender some confidence that Ghana as a country is ready to see to the housing needs of the populace. Meanwhile there should be the move to declare housing as a WELFARE issue and attempts made in amending the constitution to include housing provision a right to the populace.

The countries that are making impressions have dedicated policies and programmes they follow for housing development. This would mean that Ghana should also begin to put steps in motion to quickly enact a Housing Act in establishing the National Housing Authority, which has been on the drawing board for too long. The time to act is now.


The writer is the head of the Centre for Settlements Studies at KNUST