The City of Kigali Mayor Samuel Dusengiyumva last week announced government plans to construct 10,000 affordable houses over the next five years by replicating a new model currently being implemented in Gitega Sector, Nyarugenge District.

These affordable houses are in high demand across the country.

ALSO READ: Govt issues new guidelines to reduce informal settlements

A study conducted in June 2023 by the Rwanda Housing Authority (RHA), the Ministry of Infrastructure, and the Development Bank of Rwanda (BRD) revealed that approximately 30% of urban households in Rwanda earn a net monthly income of Rwf100,000 or less, while an additional 27% fall within the monthly income range of Rwf100,001 to Rwf200,000.

Despite ongoing affordable housing projects, the Ministry of Infrastructure states that less than 10% of the population can afford the so-called affordable houses currently available.

To address this challenge, the government is considering revising its housing strategy and incorporating new models. Here are the key models under consideration to meet the demand for decent, affordable housing:

ALSO READ: Mpazi high-risk residents to move into upgraded homes

Rehousing Model

The rehousing model, piloted in Gitega Sector, Nyarugenge District, is expected to accelerate affordable housing delivery for low-income earners and vulnerable groups. This model involves land contributions from residents, on which the government builds housing units. These units not only provide decent homes for existing landowners but also accommodate additional families on the same land.

The model includes upgrades to the infrastructure, such as improved access to roads, water, power supply, sanitation, and proper waste management facilities. The City of Kigali aims to construct 100,000 houses in the next five years, a significant increase from the current 1,000 units.

ALSO READ: Inside new model to upgrade informal settlements

Incremental Housing Model

The incremental housing model, being explored by the Ministry of Infrastructure (MININFRA), allows residents to purchase incomplete houses and finish them gradually. These homes are designed for easy expansion, enabling owners to add rooms or enlarge existing spaces over time without needing to reconstruct entire buildings.

This model is particularly suited for families whose financial situation may improve over time, allowing them to expand their homes as their income increases.

ALSO READ: Kigali City banks on ‘rehousing model’ to reduce unplanned settlements

Rent-to-Own Model

In November 2023, MININFRA announced it was finalizing a "Rent-to-Own" scheme aimed at providing affordable housing for low-income earners. Under this initiative, tenants pay monthly rent plus an additional amount that accumulates over time, enabling them to eventually purchase the property.

This model gives tenants time to build credit and save while living in the home they plan to buy. Around 2,000 Rent-to-Own units are planned, with an initial test phase of 300 units. Public-private partnerships and rent subsidies are considered crucial to the success of this model.

Social Rental Housing Model

The government is also exploring a social rental housing program, targeting individuals earning up to Rwf200,000 per month. This initiative aims to provide affordable or subsidized rental housing, with rent not exceeding 30% of a tenant’s gross income. Social rental housing is typically provided by government entities and aims to support those unable to secure accommodation in the private rental market.

Rwanda is looking at successful social housing programs in countries such as South Korea and Singapore as models to guide the development of this initiative.

ALSO READ: 10 major changes in the new Kigali master plan

Home Loan Scheme

In collaboration with the Rwanda Housing Authority (RHA), the Development Bank of Rwanda (BRD) launched the Rwanda Housing Financing Project in 2019. This initiative aims to provide cheaper mortgages and more flexible repayment options, making home ownership more accessible to Rwandans, particularly first-time buyers.

With support from a $150 million World Bank loan, BRD offers mortgages at interest rates as low as 11%, compared to the 16-18% typically offered by commercial banks. Beneficiaries also have the option of rent-to-own mortgages, allowing rental payments to be used toward home ownership over a 20-year period.

ALSO READ: Govt mulls direct investment in low-cost housing projects

Cooperative Housing Model

The cooperative housing model offers another pathway to affordable housing. Under this approach, residents either own shares in a corporation that owns the building or form a co-op where they serve as both tenants and landlords. This model not only reduces housing costs but also promotes community development and empowerment.