Background of the 34th AGM
Africa is undergoing profound demographic changes with people gradually moving to the cities. It is estimated that nearly half of Sub Sahara will be leaving in cities by 2025. Cities will have to accommodate more than 300 million new residents over the next 25 years.
Due to the level of poverty in many cities and towns, less than 10% of the population lives in formal sector housing. A few examples are illustrative. In Zambia, 74% of urban dwellers live in slums; in Nigeria, 80%; in Sudan, 85.7%; in Tanzania, 92.1%; in Madagascar 92.9%; and in Ethiopia, a staggering 99.4%. The Kibera slum in Nairobi has more than half a million people packed into 225 hectares.
The above statistics can be attributed to various factors such as; lack of sufficient supply, affordability of existing stock and limited access to home ownership among others.
In most African cities, demand for housing far outstrips the supply. In Kenya for example, it is estimated that 150,000 new housing units are required every year yet only 20,000-30,000 units per year are currently being produced. In Zambia, 600,000 units are needed annually in urban areas while less than 1% of this amount is being produced. Ghana estimates that its backlog of decent affordable units is between 300,000 and 500,000 units with an annual demand of 75,000 to 140,000 new units, while during the past 15 years at most 50,000 formal sector houses have been constructed. At the same time, almost a million additional houses were constructed by the informal sector. Senegal’s housing need per annum is 70,000 units yet the supply is barely 7,000 units. Nigeria’s housing need stands at 500,000 to1 million housing units.
To compound the problem of shortage in supply, majority of the housing stock is built for sale and is not affordable to those at the bottom end of the pyramid. Households with low or irregular income cannot afford loans from financial institutions or do not have access to credit to purchase homes. It is estimated that 80-90% of Africa’s population falls within this bracket and hence are renters. Despite this large population of renters in urban areas, this option is largely informal and often totally ignored as part of strategy. There is therefore a need to include rental housing as an additional option for meeting housing need.
One reason why rental housing is rarely promoted is because most African Governments have a singular focus of their housing policy on home ownership. In addition, there could be a belief that the only way for a government to encourage its development is to create social housing or public housing. However rental housing covers a wide range of markets from corporate executive housing to middle-class apartments, to units for former slum dwellers and many more.
As the UN- HABITAT report recommended “Governments should thus modify the regulatory framework, develop credit programs and other forms of assistance to support housing production, with a view of creating more rental housing and improve existing stock”. In other words, public officials should change their attitude towards current housing policies and try and do something practical e. g formalising rental housing as an option, to help those members of society who live in rental housing, as well as those who can provide rental housing. The private sector should also support this effort.
Shelter Afrique, as the foremost housing finance and development institution in Africa is keen on working closely with key stakeholders with the aim of designing successful rental housing programs which will lead to increased supply of rental houses in the continent. It is against this background, that the theme for the 2015 Annual Symposium has been chosen to reflect and brainstorm on strategies that can be adopted to ensure delivery of decent affordable rental housing.