#2022MayDayInGH: Gov’t must partner Real Estate Developers to provide labour affordable accommodation


May Day, also referred to as International Worker’s Day, is commemorated by most countries around the world to celebrate the achievements of various labour movements; but over time has also offered an opportunity for labour groups to present their challenges to state leaders for address.

This year, as the nation commemorates May Day, the B&FT engaged real estate developers whose very critical role in the economy of the country cannot be overemphasised. The Ghana Statistical Service (GSS) has made it clear that food, transportation and accommodation are the major drivers of inflation for March 2022. The importance of real estate developers in influencing the cost of accommodation is public knowledge.

Not long ago, labour union members living in urban centres lamented the high cost of rent – appealing for government to intervene in issues relating to the housing sector to enable workers afford accommodation

They indicated that salaried workers who plan to buy a home but whose income falls below GH₵4,000 may have to find a way to increase their salaries or switch to jobs that will boost their income, or else forfeit their dreams.

Ghana has a social housing problem with a deficit of about 2.1 million units, a situation that will require a minimum of 200,000 housing units annually over 10 years to resolve.

Although there are several real estate and mortgage companies in the country, many have argued that the houses they construct are not affordable and the prices are way above the pay grade of most Ghanaians. A reason why government has been called upon to intervene in providing affordable housing.

However, these real estate developers have bemoaned the rapid and escalating cost of building materials and land acquisition dispute challenges as the main cause of shortages.

Labour unions believe that the government must partner with the developers to subsidise rent and housing costs for workers.

Chief Executive of NCP Trading Company Limited – a total real estate entity, Jacob Nii Laryea Conney, stated that estate developers are concerned about the rising housing deficit and are very interested in providing affordable housing; but until some basic fundamental challenges beyond their control are addressed, it is impossible to provide rates that the public will be happy about.

He expressed that government must partner with developers on different levels to ensure housing is affordable to all and sundry. He indicated that most developers use loans at high-interest rates from the financial institutions to build these houses, and when the houses are not purchased on completion the interest is added to the value every year. Therefore, government can partner with real estate developers and buy the houses on completion and resell to labour unions either at the same rate or subsidised.

If this happens, the cost of buildings will be stable at least for some time, and houses that do not fall within that category will be forced to price competitively.

Beyond this, land acquisition issues are now more of a judiciary challenge than a land guard menace. The developers are also calling on government to reform land laws and create land courts with judges that have competence in land tenure issues to handle these cases to reduce the rampant compensation payments developers have to pay.

Building materials

The fortunes of some major commodities like steel, aluminium, copper and cement are closely linked to performance of the real estate sector.

The prices of these key materials are essential determinants in the cost of housing, and so the higher they go the higher the price a house-unit will cost.

Though government does not have direct control over the prices of these manufactured and mostly imported materials, the developers believe that removing some taxes on these items will drive down cost.

Role of Traditional Rulers

In Ghana, traditional rulers are very important stakeholders in the land tenure system, owning about 60-70 percent of total land.

Labour unions are therefore urging traditional leaders not to overvalue their lands to help address the housing deficit in the country. Acquiring huge tracts of land has become a herculean task over time, particularly for estate developers.

These difficulties occur as a result of rural land alienation caused by insecurity and conflict over tenure. Chiefs are sometimes criticised for such problems because they are considered land caretakers.

In recent times, traditional rulers have been involved in various multiple land sale scandals. Some are accused of masterminding land guard attacks and allowing their relatives to build on land they already have sold to strangers.

To address the housing deficit, traditional rulers, who are also known as custodians of the land, cannot be left out of the conversation; and the national houses of chiefs must lead the cause to put them in check.

Executive Secretary of Ghana Real Estate Developers Association (GREDA), Samuel Amegayibor, recently expressed that while the association wishes it could do something to resolve these problems with the high cost of housing, they can only do as much as business people and nothing more without government support and interventions by subsidising housing for the populace.

He maintained that the goal of affordable housing can only be achieved if government partners with developers to provide housing for Ghanaians.

“Government must engage private developers. We must look inward as a country. As private developers, we don’t have a problem if government is getting foreign support; but have we checked what we are doing here as private developers to find out what we can do together to help the people?”

Government Support

Government has underscored the need to support the real estate sector to boost morale for the developer fraternity and incentivise them in improving their portfolio of homes in general and affordable houses in particular.

The developer community, however, has been patiently waiting to see the promised help from government come to pass.

Unfortunately, the affordable housing initiatives championed by government itself have also not yielded the expected results – one that comes to mind instantly is the Saglemi Affordable Housing project.

In conclusion, government indeed must partner with private real estate developers: either by subsidising building materials for them, addressing the judicial system challenges they face or buying the houses and selling to labour unions at reasonable stable rates over time.

Looking forward to a May Day celebration when labour unions, instead of crying on the government for better conditions of service, will rather sing praises because accommodation troubles are a thing of the past.


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