Last month, Minister of Infrastructure announced that they have created a partnership with private developers to build affordable housing units as one of the means to address the issue of informal settlements in the City of Kigali.

Minister Claver Gatete announced this as he welcomed officers from Rwanda Defence Force Command and Staff College in his office during a study tour on Rwanda’s settlement system.

One of the developers with whom the government has partnered is the Remote Group that is currently developing about 300 units in Masaka, Kicukiro District.

According to Claudette Rubangura, Sales Manager, the target market for affordable homes is for those earning between Rwf 200,000-700,000 who are first-time homeowners.

However, given that the annual average income of Rwandan households is Rwf372, 000 per year or just Rwf30,000 per month, many fall out of the bracket set by developers in different housing schemes. The adjustments to the policy are underway with the 200,000 RWF floor to soon be removed and the 700,000 RWF ceiling to be raised to 1.2 M RWF.

Rwanda’s settlement policy stipulates that a household should not spend more than 50% percent of their monthly income on housing either for rent or mortgage.

How then, is the preferred settlement in Kigali affordable to residents? The New Times put this question to real estate experts, developers and residents.

According to Paul Rwigamba, an executive with Century Real Estate, a local real estate firm, there are some emerging housing styles that are advantageous and affordable.

"If you calculate what people spend on housing and its accessories in slums such as fetching water, unfavorable transport means and most importantly, their natural and social safety, all of which are guaranteed in upcoming housing estates, you would find that the apartments are affordable,” Rwigamba said.

He emphasized that thinking that the newly built apartments are expensive is a matter of mindset and that parties concerned should sensitize people on the benefits and for developers and financiers to come up with affordable payment modalities for different categories of prospective homeowners. 

Rubangura of Remote Group added that one aspect of the new apartments they are developing is that they have diverse price standards where the cheapest unit costs Rwf 12 million.

Modalities of payment, she added, includes mortgage financing in partnership with banks offering mortgages starting at an only 11% interest rate.

‘Too expensive’

However, residents expressed different views on the affordability of Kigali’s ideal housing scheme.

Nyirishema has lived in Kigali for over 30 years. He owns four rental units and his own residential house. The highest rent he receives is Rwf100,000 per month, while the lowest is Rwf30,000.

He says his houses, all located in Nyarugunga sector in Kicukiro district, are always occupied but however less the rent might sound, tenants always have trouble with paying.

"I tried to vary my renting services to meet different standards from Rwf30, 000 per month to Rwf100, 000. Still, I have clients who spend months without paying until they decide to move out into much cheaper houses,” Nyirishema said.

If many people already find it difficult to get Rwf30, 000 to pay for rent, Nyirishema says, it will be even harder to acquire an apartment for which they will consistently make monthly payments.

He added that most of his clients are poor or without a regular income, the case in which you cannot expect them to pay continuously.

Wema Bahati is another resident in Kigali who has been renting a home for over five years now.  He highly doubts the affordability of houses that targets people with an income bracket of Rwf200, 000 and 700,000.

As far as his renting experience is concerned, the burden of long term mortgage can be overwhelming. Besides, the new system is also discouraged by the low level of job security.

"In my opinion, I would neither go for a mortgage nor can I afford to pay. Besides, I think most people prefer lone houses with space, that are even more expensive,” Bahati said adding that the mindset is that getting a condominium from an apartment building may be equated to someone giving away their privacy.

As part of efforts to address the issue of pressure on land due to growing housing needs, the government in 2011 passed the condominium law, which encourages vertical growth of the city.

The law allows one to buy and own a single unit from a multi-storied apartment bloc.

According to the infrastructure ministry, 1,000 units have been built so far and other projects like Rugarama Park Estates and Masaka Affordable Housing are ongoing.

Rwanda Housing Authority which is one of the parties involved, has secured 174,13 hectares of land and is ready for private investor’s uptake.