Low- and middle-income earners need policy intervention to own homes

Editor, Please allow me to share my comments on the thought-provoking article, “Will you ever own a home in Kigali?”, published in The New Times on November 26. Unless one is a philanthropist, the laws of supply and demand dictate that a supplier (real estate investor) will always aim to supply to the highest bidder (wealthy buyer), and only to the lowest, if there are regulations that demand him to. Take for example, a real estate investor – why would anyone in their right state of mind choose to invest a significant amount of money to cater for middle-income earners when there is an equal opportunity to serve the rich who pay better? Again, the laws of supply and demand are on the side of an investor who chooses to cater for the latter. Call me old-fashioned, but I am of the view that if we are going to ensure that every hardworking man or woman is able to have a roof over their head, then domiciles must not be treated as an investment opportunity by society – for that we have investment markets all over the world designed to cater to such ambitions. It is this attitude of treating homes as an investment that has propelled commercial banks to set such unrealistic expectations when issuing mortgages because they know that it is not a buyer’s market and never has been. I cannot help but think that we may have got it wrong from the beginning vis-à-vis catering for the low- and middle-income classes whereby our development ambitions got the better of us and led us to lure only the heavy-handed real estate investors who are motivated by significant returns with no social responsibilities. Policy-makers should try and reverse this trend by ensuring that all real estate investors, local or foreign, demonstrate a certain level of social responsibility in their construction plans. This can be done by requiring investors to ensure that for every high-end estate they elevate, a certain minimum of social houses are built simultaneously. For example, an investor constructing 50 high-end villas can be required to include at least 5 affordable houses, designed to cater for the low- and middle-income groups. This solution does not only ensure that all groups are catered for, but also combats the possibility of having Beverly Hills-style mansions on one side and Soweto dwellings on another, which often leads to more social inequalities. Investors who accept to take on such social responsibilities may be compensated by way of tax breaks and/or discounts on price of land. Junior Sabena Mutabazi, LondonUnited Kingdom ******************** The government has to take part in this; otherwise any investor will definitely put their money where they make money. Another option is, the government should provide incentives to local investors, most especially the incentives should start directly from access to finance within our local banks. If government officials, senators, MPs can have a small percentage of duties and taxes waived for their vehicles, can you imagine how many affordable homes an investor can construct? These cars are in the Rwf20-30 million range! The same value can put up 100sqm and above of living space. John Bwenge, Kigali

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Low- and middle-income earners need policy intervention to own homes