How low-cost housing issue can be addressed

We aspire for freedom. To be on our own some day as young adults. This is especially after the adolescent age that is characterised by rebellion against those in control, we get to a point when we wish we lived by ourselves. At this point even a child living in a mansion with his parents longs for an opportunity when he would move into a smaller ‘ghetto’ room to be on their own, especially after university. However the reality on the ground is that to find decent and affordable housing in Rwanda today is a real hussle. You either settle for expensive or cheap, but almost inhabitable houses. Such small houses have no running water, their electricity connections are death traps, while bad roads to the facility, among other challenges, are the ‘norm’. Though a lot has been said about the need for affordable housing in Rwanda, little has been done and developers build houses targeting the high end market. Ironically, what is said to be low-cost houses are very beyond the means of the average salary earner in the country. This could be the reason why banks are not keen with the mortgage business as it requires high pay and job security. Young graduates and other youth, who are struggling to kick-start their careers and need affordable housing have had no option but to settle for the small and almost inhabitable houses. Remember, no one wants to live in a three bed roomed house while waiting for their first salary. They only need a small and decent place still. The challenge today is that most real estate developers are still shying away from low-cost housing. In most fragile economies, those with money prefer to keep it in real estate. Instead of buying shares in a company, they will buy land and build big houses. Houses “they can see” and brag to their friends about. What these investors forget is that the demand for low-cost housing is very high and almost insatiable. I noticed that in Nairobi, for example, many developers put up huge blocks of flats with what they refer to as bedsitters. Bedsitters are simply units with a self-contained bedroom, and nothing much else. They are loved by the youth who are starting out; have no families or money to spend on a big house. Such units have proved to be cash-cows for the investors, thanks to the huge demand. They are always occupied, with units getting tenants immediately one vacates, which assures developers of steady cash flow. Compare this with one who invests in high-end apartments, where full tenancy is often hard to achieve. And when a tenant moves out, repairs are a must and it may take to find a new tenant leading to lost revenue. With more university-going students preferring to stay alone as they juggle studies and part-time jobs, such housing can be great relief as opposed to staying in slums. Affordable housing in Kigali is hard to find and yet the youth must be a part of the city. Universities are opening shop in the city, but developers are not responding strategically to avail new affordable units on this market. To solve this problem, there must be a mindset change among developers, and also policies that attract real estate investors to build houses for the low-end market. Besides, why build big houses for rent yet the potential clients can actually afford to build their own houses. Those in this category should be sold mortgage plans not rent plans. Only expatriates could possibly rent big houses. Young graduates and other youth who cannot affordable or qualify for mortgages should at least be able to rent decent and affordable homes. In fact, some come together and rent a big house and share the costs. However, when one opts to leave the financial burden on the rest is quickly felt. What such a market segment needs small decent units as most of them do not even have the furniture to fit in a big house save for a bed and a few belongings. Batsinda was one good project that proved that low-cost housing is very feasible in this country. The only problem is that it was a horizontal project (not high rise) thus requiring more land. The best option is to make use of vertical development by building high rise, but affordable homes.

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How low-cost housing issue can be addressed