The Minister of Works and Housing, Samuel Atta Akyea, has revealed that government is putting together a master-plan to reduce the nation’s housing deficit by as much as 40 percent in the next four years. As a result, government has begun several housing projects with associated financial mortgage schemes across the country to achieve that aim.
The projects include reconstruction of the affordable housing projects at Tema in the Greater Accra Region being spearheaded by the Tema Development Corporation (TDC), and Asokore Mampong Affordable Houses developed by the Social Security and National Insurance Trust (SSNIT) for the Ghana Medical Association (GMA) in the Ashanti Region.
“Let’s not project terribly, but we can give you a very strong indication that the deficit will be reduced considerably. If we are able to reduce the deficit by 40 percent, it means we have done fairly well because the deficit is 2 million housing units.
“If we push very hard in the districts and municipalities, and in the cities where we have teeming crowds of workers, we will give many permanent shelter. The president is seriously committed to reducing the deficit. If we do 40 percent that is a serious breakthrough; a lot of people would find places to rest,” he said.
The minister was speaking to the media after a working visit to the TDC affordable housing enclave and Adom City Estates in Tema communities 26 and 25 respectively. He was confident that with the two schemes backing national housing projects, the country’s housing deficit that stands at about 2 million housing units will see some significant reduction.
Mortgage schemes
A National Housing and Mortgage Fund (NHMF) has been set up to pilot two schemes: The National Mortgage Scheme (NMS) and Affordable Housing Real Estate Investment Trusts (REITs) (Rent-to-own) schemes. Under the National Mortgage Scheme NMS), mortgages are being underwritten at rates of 10 to 12 percent by the participating banks – namely GCB Bank Limited, Stanbic Bank Ghana Limited, and Republic Bank Ghana Limited.
The intervention aims at reducing mortgage rates by over 60 percent, compared to the average market rate of 28 percent. In addition, based on the building specification, the starting price for houses are GH¢140,000 and GH¢90,000 for standard two-bedroom and one-bedroom respectively.
The Affordable Housing REITs is promoting the rent-to-own scheme with only monthly rent payments; and after a period, the occupant has the option to own it. The rent-to-own scheme will eliminate the burdening two-year rent advance system. It is designed to give low-income workers an opportunity to rent and eventually own homes. The focus will be on apartments and inner-city rehabilitation.
The goal is for the Affordable Housing REITs to provide the off-take for the rest of the TDC affordable housing units in the enclave, to provide more decent homes through the Rent-to-own Scheme for Ghanaians upon completion by TDC. Interested public servants have been asked to apply for consideration.
TDC work progress
Already, work is earnestly ongoing at the TDC affordable housing project in Tema, which sits on a 62.3-acre land. The site is expected to host 1- and 2-bedroom residential units as well as studio apartments, schools, a post-office, clinics, recreational areas, a car-station and shops, and is estimated to cost GH¢350million. Already, 11 residential blocks have been completed and 46 additional blocks are to be done by the first quarter of 2021, while some 93 blocks will be added by 2023.
Work under the Asokore Mampong Affordable Houses has started, while some private estate developers under the Ghana Real Estate Association (GREDA), including Adom City Estate, have coordinated with the Ministry of Works and Housing and the Ministry of Finance to take part in government’s affordable housing provision venture.
Private sector application
The minister noted that government wants to start with public sector workers due to the reliability and predictability of their salary, as payment would be deducted directly from the Controller and Accountant-General’s Department to service the mortgage; but he was quick to add that the private sector will be roped-in soon.
“They can come in, provided they have a consistent income stream. By that, you can sign on and we will be assured you’ll be able to service the mortgage. But when you are starting anything serious and of consequence, you try to use financial sources that are known and permanent. We know that government is not going away, and so long as you are getting paid you can be a candidate for that; and as soon as we see that it has stabilised, we will expand and take care of the private sector workers as well. Let this blossom and we can expand our horizons.”
He added that on the bit about distribution, it is going to be fair. “We have a whole set-up for those who want to sign-on. Next year, if we retain power, a lot more houses will be scattered across the country, and we will put in strict measures to ensure they go to the people of Ghana.”
