Rwanda Focus (Kigali)

24 February 2013

Rwanda: Development Plan Ensures Housing Affordability in Kigali City

Kigali city is facing a big housing challenge, especially when it comes to affordable dwellings for which it currently has an annual deficit of 30,000 new ones. A housing market study done last year revealed that the city has a supply deficit of 344,068 units by 2020 in different housing typologies like social housing, affordable housing, mid-range housing and premium housing.

It is therefore imperative to have an average of over 30,000 new units constructed every year for the city to meet the current demand. But this target seems very hard to achieve given that the current annual supply of new dwellings in the formal market in Kigali ranges from 800 to 1,000 per year.

In addition, the houses that are being developed in the city are not affordable to the majority of its residents, coming at a price of more than Frw 50 million.

According to the city authorities, affordable housing will be among major preoccupations of the city's five-year development plan, which was recently unveiled by the city council. The plan has set out tough measures to allow households below the poverty line (a monthly income of less than Frw 35,500) to get decent shelters. This category of Social Housing accounts for 12.62% of the city's population with the need of 21,718 units.

"It has been recommended that this type of demand be addressed by the government through a subsidy system," elaborates the development plan.

The city officials note that the households earning between Frw 35,500 to 200,000 per month constitute the largest part of the population in need of affordable housing; estimated at 93,081 dwelling units (54.11%).

The houses that are being developed in the city are not affordable to the majority of its residents, coming at a price of more than Frw 50 million.

These households have some payment capacity and could access a special rental market which may include for instance rent-to-own leasing mechanisms. In this category; the report on the Housing Demand in Kigali recommends upgradable housing to be included.

Another subcategory is mid-range housing with 56,433 units (32.8%) needed. It includes a wide variety of income segments from Frw 200,001 to 2.5 million per month. Most of households belonging to this category may be eligible for traditional mortgage financing.

The last group categorized as Premium Housing requires a supply of 801 dwellings (0.46%) for the highest earners with a monthly income of more than Frw 2.5 million.

Expropriation

In a bid to cope with the issue, authorities of the city say that 1,744 hectares for affordable housing units will be secured within the five-year period. BRD and Shelter Afrique are among the organizations to invest in such projects.

At the same time, 5,000 affordable housing units are set to be developed at five sites: 3000 units to be developed in Akumunigo and Rugarama of Nyarugenge, and 2000 units in Gaculiro and Batsinda of Gasabo. So far, the Rwanda Social Security Board (RSSB) has expressed interest to invest in the project.

The private sector is also expected to come on board and develop affordable apartments and estates in order to meet the increasing demand, noted Norbert Kamana, the director of planning in Kigali City.

Where expropriation will be necessary, city officials noted, local people will be taken into consideration and be prioritized in order to facilitate them to get decent shelters on the sites.

"We should count on both economic and social aspects in order to avoid a burden to the country that may result later from those who may fail to manage the money they got during the expropriation," pointed out an official.

Apart from residential affordable housing, there are also other challenges that require attention in the next five years in Kigali city such as development of commercial buildings, public parks and plazas, installation of more street lighting, improvement in the greening and beautification.

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