AFFORDABLE housing in Africa remains both a fact and a fiction due to the lack of knowledge and the shortage of affordable housing finance products, housing experts have noted. According to the Centre for Affordable Housing Finance in Africa’s Olivier Vidal, such deficiencies are common in most African countries and are part of reasons governments, even with good intentions, end failing in their initiatives.
Research by CAHF shows that in South Africa less than 36 percent of the population can afford the cheapest newly built house. In Benin less than 20 percent of the population can afford the cheapest new house.
In 2016, the cheapest, formal, newly built house built by a private developer cost $14 941 in Benin, $23 962, in South Africa, $33 000 in Burundi, and $200 000 USD in Angola. The same house cost $18 000 in Zimbabwe in 2013.
African governments have made efforts to resolve the issue of housing shortage, but successes have been few. There has also been little progress in ensuring long term tenure and affordability of mortgage loans.
Most African countries offer mortgages at rates above 10 percent, and for less than 20 years this has resulted in little success in private and public led housing initiatives with access to housing a pipe dream for many.
For example, In 2012, the newly elected government launched a presidential programme for affordable housing with the objective of building more than 75 000 housing units in Abidjan, including 60 000 low-cost units.
However, four years after the project began; the government has admitted that very few social houses have been completed, despite an initial delivery date of December 2015.
The government announced in 2015, well after construction had started, that the selected companies were unable to provide housing units at that price.
By end of 2016 they announced that the price for the affordable units would be between 18 293 euros and 22 867 euros.
Furthermore, by analysing the 75 000 applicants, the Ivorian authorities realised that over 60 percent of them may see their applications rejected by bankers and real estate developers.
In response to these difficulties, the government announced that he his is planning to buy, through the Social Housing Fund all of the completed units that meet the technical specifications outlined by the programme.
The government also announced the establishment of a buyer credit guarantee fund, that would be funded 50 percent from the taxes collected on imported cement and clinker.
The government’s offer to repurchase the homes already completed could be an effective short term lever to expedite low-cost housing for the segment of the population that needs it the most.
However, precautions should be taken to avoid price inflation by the developers. There is high risk that this ambitious programme to provide affordable housing options will turn into a real estate program, benefiting only the middle and upper classes.