Affordable Housing: A reality or a myth for the average Ghanaian?
Shelter is one of the basic things that one cannot do without. Currently there is a housing deficit of 1.8 to 2 million according to Ghana Statistical Service reports of 2021 and 2022.
According to Ghana Statistical Service, housing deficit refers to the gab between the supply and demand for housing and is measured by considering the stock of hosing and the number of persons per house.
In other words, it’s the shortage in the number of houses required to accommodate the population in an area. The demand for housing or shelter is increasingly growing due to a number of factors, including urbanization, population growth, industrialization, centralization of development in the major cities, etc.
Successive governments over the past has attempted solving this menace. Some of these initiatives are the Askore Mampong Affordable Housing Project in the Ashanti Region, Tema Community 26 Affordable Housing Project, the Borteyman Affordable Housing Project, the Saglemi Affordable Housing Project etc all in the Greater Accra Region.
In spite of these attempt the country’s population is still struggling with housing as a common need.
When we say affordable housing, the first question that keeps running through my mind is, ‘what is ‘Affordable?’’ It’s a very relative statement.
Affordability according to the Cambridge dictionary, is the state of being cheap enough for people to buy. Affordability status can be measured by evaluating the ability of firms, individuals, household to pay for goods, services, property without compromising their financial stability or quality of life.
According to UN-Habitat, affordability is measured as the net monthly expenditure on housing cost that does not exceed 30% of the total monthly income of the household.
Affordable housing has been defined in various context depending on jurisdiction or region. The definition of affordable housing in Europe or America may differ from that of Ghana. In our jurisdictions, Ghana uses the definition of UN-Habitat on affordable housing which is a household spending not more than one third of household gross annual income on rent or price of housing.
The major question therefore now is, will the average Ghanaian be able to acquire a house defined as affordable in Ghana? This question can be answered by comparing the price of an affordable house with the income distribution in Ghana. As mentioned earlier a common benchmark for affordability is that the cost of housing should not be more than 30% of a household’s gross monthly income.
The Gross National Income (GNI) per capita in Ghana stands at $2340 as at 2023 according to Statista. With a minimum and maximum salary ranges of $141.73 and $536.12 respectively per month at an exchange rate of GH¢14.81 to $1 the gross salary range stands at GH¢2,099 to GH¢7,940 in Ghana.
Consider a 2-bedroom house priced at GH¢300,000.00 tagged as affordable depending on location, level of finishes, etc. Using the Housing Cost-to-Income Ratio with a benchmark of affordability of not more than 30% of gross monthly income one will require a monthly mortgage of GH¢4,077.18, minimum monthly income of GH¢13,590.60.
From these figures it is very obvious that the average worker cannot afford a house termed Affordable House in Ghana. So, to enable the citizens to be able to acquire or rent house, there is the need for the government to continue to intervein in the provision of economically low-priced properties.
The government should consider collaboration with engineers to come up alternative construction materials that are affordable which will help in reducing the cost of construction which will extend to reduction in the price of houses.
There should also be a collaboration between the government and the private sector in the fight against this housing deficit.
Government should also make an attempt to collaborate with the private sector to extend industrialization to the countryside to prevent residents there in from coming to the already choked major cities. This will intend reduce the pressure on the existing housing infrastructure.
815
