The high cost of land, and imported construction material, as well as high-interest rates for loans have been cited as the main factors undermining affordable housing ambitions.
Roger Mugisha, a research fellow working with Institute of Policy Analysis and Research (IPAR-Rwanda), said that with a high rate of urbanisation and population growth, there is more demand for affordable houses but the cost of land and others, housing inputs are still expensive and hard to access.
Mugisha was speaking during a forum on sanitation, housing and urbanisation in Kigali.
Rwanda targets to have 35 per cent of urbanisation by 2024 from 18.4 per cent in 2017. By 2050, 60 per cent of African population will be living in cities triggering the need to access affordable housing according to experts.
"There is lack of market assessment before implementing housing projects. We observe a mismatch between affordable housing schemes and socio-economic status or income earning levels among the citizens. Currency depreciation also drives up the cost of construction materials and in the end affects housing sector," he said.
The researchers' analysis recommended engaging academic and research institutions to identify innovative ways of affordable housing and microfinance schemes, produce locally sourced low-cost construction materials for Rwanda's context.
He said there is need for coordinating all housing projects across the country and identify further causes of problems related to affordability.
"There is need of granting incremental houses to low income individuals. We also need to do research on how existing informal settlement can be upgraded with innovation and contribute to affordable housing," he said.
Mugisha added that joint efforts are needed to promote culture of saving so as to increase the purchasing power of housing units.
The researcher also highlighted the need to regulate prices set by housing developers to ensure affordability.
Marie Chantal Rwakazina, the Mayor of Kigali City, said that the city has committed to buy and secure land bank every year to enable the development of infrastructure including affordable housing projects, expropriated residents and others.
Land bank is a large area held by a public or private organisation for future infrastructure development.
"We have realised the cost of affordable houses and expropriation increases due to the cost of land. If government buys and sets aside a land bank every year and gives it to an investor for affordable housing project, then the cost of those houses will go down," she explained.
Rwakazina said that due to different challenges, the city has not even managed to satisfy 10 per cent of affordable housing needs.
"There is a big room for improvement in terms of affordable housing we have to devise strategies to make housing affordable for every segment of income earners." she said.
According to the Minister for Infrastructure, Claver Gatete, , " there is also an effort to engage investors and upgrade dwelling slums without relocating residents but help them set up decent houses since they contribute their land to the project."
"We would like that if a dweller cannot afford to upgrade their house, private investors can upgrade it into decent storied building and the residents who contribute the land become shareholders of the property," he explained.
To facilitate financial access to affordable houses, there is a demonstration in Nyarugenge District, Kimisagara sector whereby slums were upgraded without being resettled with families now living houses, officials said.
He said the initiative will make the city inclusive in terms of affordable housing to ensure a win-win situation.
"Developers must fast-track such affordable housing projects implementation and afterward, seek partnership or mechanism to lower the cost of housing to be paid by citizens," he noted.
The minister added that people with monthly income such as between Rwf200, 000 and Rwf700, 000 will soon be benefitting from a new affordable housing fund that will provide loans at lower interest rates to be paid in between 20 and 25 years.
"The fund under BRD has $150 million initial investment and we are seeking other partners to inject in more funds. For instance, the International Finance Corporation of the World Bank and Housing Bank from India are keen on partnering with the fund. We want low-income earners to get affordable houses that is less than Rwf30 million to as low as Rwf10 million," he said.