City authorities unveil plan to reduce housing shortage

The City of Kigali has unveiled an ambitious plan under which thousands of houses will be built in a space of ten years to meet the demand for affordable houses in the city. The projects will provide about 34,000 affordable housing units to people of various income brackets, Liliane Mupende, the city’s director of the One Stop Centre (OSC), said. “We project the total demand for new dwellings in Kigali to hit 344,068 units by 2022,” she said. Mupende said works on the Gacuriro Vision City phase I project have already started and detailed designs for the Kinyinya and Batsinda projects submitted to the OSC and are currently under review. The Akumunigo project’s pre-feasibility study was completed and is currently under review by the OSC, while the Gacuriro, Kinyinya and Batsinda projects are undertaken in partnership with the Rwanda Social Security Board (RSSB). Moses Kazoora, the RSSB communications director, said they have started basic infrastructure works at Vision City project in Gacuriro where 500 units are planned. The Kinyinya and Batsinda projects will consist of apartments. RSSB is the main supplier of housing in the formal market, according to the Housing market demand survey, conducted by City of Kigali last year. Mupende said the Akumunigo project was being developed in partnership with Rwanda Development Bank (BRD) and Shelter Afrique. “The cost of this project is still being established as designs are still underway,” Mupende noted. She added that the project would be developed in phases spread over five years. “They will be of varying sizes and the targeted beneficiaries include government employees, co-operatives and individuals,” she said. According to Mupende, the Akumunigo estate will have an estimated 3,000 units while Gacuriro will have about 4,530 units when completed. Between 1,650 and 2,000 units will be built in Kinyinya and 300-500 at the Batsinda project. But these projects are still under review, she pointed out. Mupende said the city has offered subsidies to developers on several properties, especially those earmarked for affordable housing such as the sites that RSSB will develop, the Central Business District Phase I (Ubumwe) and Akumunigo, among others. “We are trying to organise an affordable housing symposium. Before this, we will work with Rwanda Housing Authority (RHA) to establish an incentive package that will attract more investors to develop affordable housing,” she added. She added that the city will facilitate the establishment of a bank to guarantee a reserve of land that will be dedicated to the development of public interest projects such as affordable housing, infrastructure and services development, as well as public facilities like schools and hospitals. On whether the city authorities were giving local developers priority to undertake these projects, Mupende said they offer uniform incentive packages and opportunities to both local and foreign firms, arguing that capacity of developers to complete projects remains paramount. “We facilitate all capable investors by availing them land at a subsidised rate, subject to the costing of the final unit at an affordable charge for a targeted income bracket, particularly low and middle income earners. In some cases, the city may contribute to the infrastructure cost where possible,” Mupende explained. According to Norbert Kamana, the director general for planning at City of Kigali, close to 2,000 hectares of land were identified across the city to build affordable houses. Challenges However, officials admit that this grand plan faces some hiccups, such as lack of mortgage financing. “There is a high cost of construction and building materials which are imported. We are in collaboration with Rwanda Housing Authority (RHA) and the Ministry of Infrastructure to find alternative construction technologies that can promote the use of local materials and bring down the cost of construction,” Mupende pointed out. Limited skilled labour is another challenge, although this would be solved in a few years through technical and vocational training centres, according to Mupende. She added that RHA was playing a major role in addressing the capacity gap in collaboration with the private sector. Another challenge she cited out was the rapid increase of land prices in Kigali, which she believes may become a serious bottleneck for developing affordable housing. Therefore, special analysis should be undertaken to determine the most effective strategies to ensure availability of sufficient land for affordable housing, at reasonable cost. Housing demand and supply in the city According to the EU-funded survey conducted last year, the total housing requirements in Kigali by 2022 are projected to be 458,265 dwelling units. Kigali’s population as of 2012 reached 1.1 million inhabitants, and is anticipated to grow to nearly two million by 2022. The study aimed at estimating the demand and supply of housing in Kigali, as well as to provide investors and stakeholders with a clear understanding of the market. Demand drivers Housing demand in Kigali is driven by two main factors: first, by demographic change resulting from population growth (including natural growth and immigration) and, second, by economic and policy factors, such as economic transition, geographic location of economic opportunity in rural and urban areas, changes in household income and government policy and regulations that manage growth. Housing supply The formal housing market, as it is currently operating, supplies around 1,000 units per year, but the city will demand around 31,000 units every year. It is estimated that between 2013 and 2018, around 17,280 units will be up and running, which represent an average of 1,234 units per year. These will be supplied into the formal housing of Kigali, of which 28 per cent are apartments and the rest are detached units. Statistics show that it is also important to signal that ongoing and planned projects concentrate on unit cost of about Rwf15m. As the city tries to enhance housing supply, experts advise that Kigali should find ways to work around natural barriers like swamps and hilly terrain by concentrating on sky-rise structures.