Government has announced a novel rental support programme – the National Rental Assistance Scheme (NRAS) – to provide low interest loans for eligible low-income earners.
The scheme is expected to reduce the burden of vulnerable groups having to fork out money as advance rent payment, and will be implemented in partnership with the private sector. Rent advance loans will be paid directly into the bank accounts of landlords’ registered with the Scheme. Government plans on spending GH¢30million to implement the Scheme.
Vice President Dr. Mahamudu Bawumia, launching the NRAS, explained that it will initially take off in some five regions before being rolled out nationwide. The regions include the Greater Accra, Western, Ashanti, and Bono East Regions.
He said the intervention is to cushion low-income earners, as data available to the Works and Housing Ministry’s Rent Control Department indicate a high prevalence of rent advance-related issues.
He said: “These loans will be repaid monthly to match the tenure of the rent, and will be supported by a bank guarantee to ensure sustainability”.
The Vice President reckoned that successive governments have instituted several housing policies geared toward increasing access to various housing options across the country. However, he said: “These efforts are mainly concentrated on home ownership services and have not achieved the desired impact of addressing market imbalances in the rental housing market”.
Rental housing forms an integral part of a well-functioning housing market and plays a critical role in increasing access to affordable housing options, particularly for the youth and low-to-middle-income groups.
In line with this, he said providing meaningful shelter for citizens’ forms part of government’s developmental goals. “Measures taken to address problems associated with the housing sector, especially the rental housing sector, have remained vital to our development agenda.”
There also is the problem of landlords demanding two-years rent advance payment, which he says deprives many people, especially the youth, of access to rental housing.
The challenge has been attributed to difficulty in verifying the identity of tenants, and lack of trust by landlords in the undertaking of tenants to make rent payments on time among others. It is to address this problem that government is introducing this new programme to bridge the information and financial gap between tenants and landlords.
“These measures will enhance tenants’ creditworthiness and reduce the need for large rent advance requests by landlords,” he said.
The Ministry of Works and Housing, he revealed, has submitted to parliament for consideration and passage a Rent Bill to replace the existing Rent Act 1963 (Act 220).
Also, to enhance service delivery standards of the Rent Control Department, he indicated that processes have begun – together with a service provider – to digitalise the Department’s work across the country.
Digitalisation is expected to provide a consolidated platform for operations of the Rent Control Department, while at the same time improving revenue generation and collection.
“Implementation of the National Rental Assistance Scheme will, among other things, provide a new pathway for government to leverage its policy functions to streamline the rental sub-sector in respect of the quantity and quality of rental housing,” Dr. Bawumia said.
The Minister for Works and Housing, Francis Asenso-Boakye – also speaking at the programme, noted that rental accommodation constitutes a significant share of shelter services in the country.
“Because of the importance of shelter for humanity, the urgent need to provide support for lower-income households and the youth to access the minimum standard of decent accommodation cannot be over-emphasised,” he stated.