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Release
NPP, October
22, 2012
NANA AKUFO-ADDO’S SPEECH TO GREDA – 22ND OCTOBER 2012
Housing Matters – Building a Society of Opportunities and Hope
The President of GREDA, members of Council, members of GREDA,
members of the media, invited guests, distinguished ladies and
gentlemen, fellow Ghanaians. Thank you very much for coming in
your numbers in response to my invitation, for this
opportunity to address the subject of housing, one of the
biggest problems that face our nation and which, I believe,
should influence the decision we make on December 7 as we go
to the polls to elect a President to manage our affairs for
the next four years.
Picture that morning of December 7 and where the majority of
the citizens would get up from, to go and cast their votes. In
the urban areas, many voters would be coming from kiosks,
uncompleted houses, containers, shop fronts, bare streets and
other unsuitable forms of shelter and in the rural areas many
of the houses would be badly ventilated and nationwide, there
would be many trying to resolve the urgent problem of a demand
of two to three years rent advance payment from landlords.
We have a housing crisis on our hands. I am sure many people
have heard the figures. The housing deficit is projected at
about 1.5million housing units. Annual housing demand is about
70,000 units. It is estimated that only about 40,000 housing
units are added to the housing stock annually, leaving an
annual deficit of about 30,000 housing units and growing.
According to the 2010 Housing and Population Census, there
were over 5.8 million dwelling units nationwide, many of which
are made up of wood, mud, metal, in an uncompleted and
dilapidated form unworthy to be called a home; about 70% of
which are without toilets.
This is an intolerable situation and we must put all our minds
and ingenuity to find solutions.
Traditionally, we have sought to build houses individually and
it takes a long time to do so. I have no idea how many people
there must be who have started building houses which are at
various stages of completion. Every other person has a
“project” which lasts for many years. We have a lot of money
locked up in these structures and often by the time we have
finished building these dream houses, children are grown up
and we do not need the three or four bedroom houses we have
taken a life time to build. This is stressful, inefficient and
unnecessarily expensive and we cannot go on like this.
Others fight a losing battle with landlords and are constantly
in debt because they have to raise loans at high interests to
be able to pay the advanced rents demanded as a rule. Some
landlords would rather keep their properties empty, rather
than rent them, because they cannot be sure how many people
would end up living in a house they have rented to a family of
three. Many people simply give up the battle and create homes
in kiosks, containers and on the streets.
I have requested to meet with GREDA this morning because this
is a most appropriate forum 1) to lay out in clear terms my
housing policy proposals, 2) to seek your support and that of
the millions of Ghanaians who daily face accommodation
challenges to help make these proposals a reality.
Continuous constructive engagement with local industry players
like GREDA will enable us better understand the challenges you
face, and I look forward to deepening this interaction with
you when, God willing, the NPP wins the December 7th election.
I am told that, over the past four years, GREDA has made
several attempts to engage with the current NDC
administration, and have submitted proposals with financing
options to help address the huge housing deficit, without much
success.
Unfortunately for all of us, this NDC government under the
leadership of our new carertaker president, has preferred to
chase a lot of pipe dreams when it comes to housing and that
is what has led to the STX fiasco and now to the GUMA no-show.
It gives us no joy to say “we told you so”. When the President
announced the “South Africa GUMA Housing Project” and we were
told that 500 houses would be constructed before the December
elections, we pointed out this was another hoax project. Last
Thursday, the Minister of Water Resources, Works and Housing
spoke about the GUMA project, and I quote him:
“The prices, we have gone back and forth on the financial
terms, the loan is quite expensive, the payment period is too
short, and the interest and even cost of property when they
have eventually rolled out, so that is what is stalling it.”
So if I may ask, what was the rush to announce the deal in May
2012 when all the relevant details had not been finalized and
signed off? Ladies and gentlemen, this is another example of
how the NDC has run our economy on propaganda and lies. You
can’t build houses on propaganda.
So, how should we set about the urgent task of defraying the
housing deficit to meet the annual demand of 70,000 units?
As I have said on other occasions, we cannot continue doing
the same things the same way and hope to get different
outcomes. We must find new ways of doing things to get the
better results we desire.
The problems, as we all know, are many and varied. Land
acquisition poses the greatest problem, but there are many
other things that inhibit the progress of the housing
industry.
I want to start by engaging the Ghana Institute of Architects.
I want our architects to give us designs that would make
buildings more environmentally appropriate and allow us to use
local materials to construct houses that are not as expensive
to build.
The cost of building in Ghana is far too high, building
materials are far, far too expensive and our construction
habits need to be modernized. I have never understood, for
example, why we do not have standard size doors and windows in
Ghana. Why do we not have standard size wardrobes and
cupboards? There are many parts of the industry that require
urgent and comprehensive attention and we shall bring
regulations to ensure standardization in the construction
industry.
We believe that government’s role is to facilitate strong
collaboration between land agencies, family/stools/skins,
banks, insurance companies, mortgage houses, building material
suppliers and real estate developers like GREDA. Our goal is
to reduce the housing deficit by about 10% within the
four-year term, by increasing national annual output from
40,000 units to 100,000 units.
To be able to play this facilitation role effectively, an
Akufo-Addo government will separate the policy-making and
implementation functions of the Ministry of Water Resources,
Works and Housing. We shall set up a regulatory body and a
housing agency which will be responsible for implementing our
Public and Social Housing programs.
The Housing Agency shall i) be dedicated to developing new
communities and townships in partnership with the private
sector ii) be responsible for acquisition, development,
management and allocation of land banks for housing
development, iii) raise funding for housing infrastructure,
iv) promote our social housing programs v) partner and provide
loan guarantees and off-taker agreements to the private sector
to deliver affordable housing. vi) promote the secondary
mortgage market vii) promote the use of local building
materials and alternative technology in housing construction.
As presently constituted, the Ministry of Water Resources,
Works and Housing does not have the capacity, the focus or the
resources to execute effectively this program and drive the
new agenda. The housing agency will borrow from international
best practices and examples of countries such as Singapore,
Brazil, and South Africa, which have all successfully carried
out massive social and public housing programs, led by a
singularly focused housing agency with significantly positive
results.
The Agency shall raise funding from GOG Budgetary Support,
Loans, Multilateral and Bilateral Sources, GOG Backed Housing
Bonds, Pension Funds, Private Capital sources, Modeling and
Land Financing Schemes.
One of the key primary responsibilities of the housing agency
will be to create additional land banks. Under the Kufuor
administration, land banks were identified around the country
for the construction of affordable housing. The amount so
identified is nowhere near enough to meet our needs and the
agency will be encouraged to identify and establish large
enough land banks to meet our needs. The lands, so identified,
would be properly and legally acquired and compensation paid
to the landowners. Land acquisition by government has become a
contentious issue mostly because adequate compensation has not
been paid to landowners promptly. We will make sure that
compensation is paid timeously.
The aim of creating the land banks is to provide clearly
demarcated, safe, secure and properly titled serviced and
un-serviced plots for use by the private sector for social and
public housing schemes. By doing this, banks and other
financial institutions will be encouraged to finance housing
projects, with the assurance that lending will be backed by
land with secured title.
A proportion of these land banks and serviced plots will also
be made available to private individuals at market rates, as a
way of raising funds to cross-subsidize our social housing
programs. Through this approach, we shall eliminate some of
the hassle associated with land acquisition by individuals
across the country.
The current situation of private individuals building houses
in areas with poor infrastructure, poor drainage, poor water
supply, poor road network and a lack of proper house address
system will not continue. This situation leads to the
inefficient distribution of public utilities to such areas
resulting in illegal power and water connections, poor
drainage and waste management systems. It is no wonder that
the Municipal Authorities are overstretched with the
management of our sprawling urban areas and have to manage
with very little resources.
We will ensure that public servants, teachers, civil servants,
nurses, doctors, members of the security services can
participate in housing programs that will enable them own
homes for their retirement so that the prospect of retirement
no longer poses such fear and dread to public officials.
The most urgent need in the housing sector is the delivery of
rental housing units. When a young person first leaves home to
start an independent life, he must necessarily get rented
accommodation. A school leaver or a young married couple or
those who have newly arrived in the urban centres, looking to
start a new life require rental units. Today, renting property
has become a nightmare; the acute shortage has led to
landlords demanding the payment in advance of an average of
two years’ rent. The only way of dealing with this phenomenon
is to increase the stock of housing that is available for
rentals and this will be a priority of an Akufo-Addo
government. We would actively encourage the District
Assemblies and NGO’s and support programs that promote
self-help housing projects to embark upon a vigorous programme
of construction of rental housing. In addition, there will be
a more vigorous enforcement of the Rent Control Act, which,
hopefully, will deal with the phenomenon of the demand of
excessive rent advance payment.
This programme will be developed in partnership with the
private sector and district assemblies and will be
cross-subsidized from the other housing programs. We will
encourage MMDA’s to set up a dedicated “District Housing Fund”
from the proposed 2.5% increase in common fund allocation to
provide infrastructure for rental housing schemes. We shall
promote and institute the building of hostels for the most
vulnerable, like the “Kayaye”, who currently sleep on the
streets. These hostels will be run in conjunction with the
skills training organizations so that residents will be
obliged to undergo skills training and by the time they leave
a hostel, they would be qualified to be independent. No one
will stay in a hostel longer than a maximum of four years.
Rents collected shall go into a revolving fund at the district
level for the maintenance and expansion of the housing stock.
We are proposing the following specific strategies for the
promotion of a rapid increase in the stock of rental
buildings:
1. Government will provide serviced plots to private
developers who participate in their social housing program.
2. Government will provide duty and tax exemptions on imported
building materials used in social housing in the short term.
3. Corporate Tax exemptions to private sector who provide low
income rental housing
4. Government through district assemblies will support
community led initiatives to provide housing through provision
of land, funding, building materials and technical support.
5. Provide government guarantees through local banks for
housing cooperative societies and NGO’s involved in housing
and
6. Provide loan guarantees to private sector for slum
upgrading and inner city revitalization projects, aimed at
providing rental units and increasing housing densities. Land
will be used as collateral for borrowing
But above these specific initiatives, I wish to challenge
members of GREDA and other estate developers to turn their
minds to the provision of rental housing. I do not think it is
beyond your ingenuity to find profitable ways of resolving
this problem. You cannot hope to limit your activities only to
those who can and want to buy their homes. You could, for
example, think along the lines of finding a formula that makes
a developer provide a certain number of rental units for a set
number of ownership numbers and you get tax incentives as a
result. I hope to hear from you urgently on this.
The last element of our plan deals with rural housing. The
biggest challenge here is more of quality than quantity. I
shall be encouraging our architects to come up with a variety
of designs that will be suitable for rural areas and help
transform the rural landscape. We will work through
cooperatives and local trade associations to ensure that
technical assistance is available to support qualitative
improvements in rural housing through the active support and
participation of the private sector, research institutions and
district assemblies. The planning offices of the district
assemblies will extend their work to the rural areas as they
are expected to do.
I am informed that real estate developers’ contribution to
annual output is about 10% of the estimated 40,000 units
delivered annually. That really is a minute proportion. I know
that progress in the sector has been hampered by
administrative bottlenecks and lack of government support.
Then, there are the constraints such as lack of financing,
land litigation, high land costs, high cost of building
materials, poor infrastructure, lack of a clear industry legal
policy and regulatory framework.
And yet there are examples to show that it is possible for
local developers to play a key role in providing housing for
Ghanaians. The GREDA Teshie-Nungua Estates in Accra is a good
example of such a public-private-partnership working for the
public good. Under this arrangement, land was secured by SSNIT,
financing was provided by the defunct Bank for Housing and
Construction. This 3 party arrangement, supported by other
building material suppliers, such as GHACEM, made it possible
for developers to mobilize other resources to deliver housing
units for middle class working families.
Government will support similar models, which will facilitate
strong collaboration between land agencies,
family/stools/skins, banks, insurance companies, mortgage
houses, building material suppliers and real estate
developers. I strongly believe that given the right support
and assistance, you will be able to help us achieve our goal.
We intend to deal with the perennial housing financing problem
through the issuing of Government backed Housing Bonds, and
create the avenue for private capital and pension funds to
channel their long-term funds into the “Housing Fund”, which
will provide funds to support the private sector. We believe
that this program will enable us raise over GHC 1billion
annually over the next four years for our social and public
housing programs.
A vigorous construction industry will create thousands of
highly skilled jobs in carpentry, joinery, masonry, plumbing,
electrical, metal workers and other construction industry
related jobs. We will establish linkages with industry to
ensure that students under the Vocational training programme,
receive practical training during their period of study.
Companies that support this program by accepting students on
attachment will be entitled to some tax breaks and I would
encourage all GREDA members to support this program.
New housing projects will spawn the creation of new local
building material industries to produce materials such as
cement blocks, bricks, door locks, louver blades, roofing
sheets, light steel frames, reinforcement bars, floor tiles,
toilet bowls, doors etc. which will lead to the further
creation of thousand of jobs for our youth. .
We shall also vigorously promote initiatives like the
Collateral Replacement Indemnity Program (CRIP), under which
insurance companies will be encouraged to underwrite the
down-payment portion of a mortgage, particularly for
first-time home-buyers. Premiums will be included in the
monthly mortgage payment. Our research has shown that the
initial 20%-30% down-payment required by mortgage companies
and banks, as a pre-requisite for disbursing mortgages, is
usually a major obstacle for most applicants in taking a
mortgage to purchase a home. A proportion of pension funds and
SSNIT contributions will be made available to workers for use
as a down-payment to secure a mortgage. Under this
arrangement, thousands of Ghanaians will be able to purchase a
home.
Let me now address the issue of affordability. There is no
point in coming out with these programmes if they turn out to
be out of the reach of the majority of people. The housing
problem we have, affects mostly those who are starting their
working lives and do not have spare cash. Affordability is a
long- term fix. I believe that the policy options I have
outlined, will address the structural issues that impinge on
affordability making it possible for developers to build
houses more cheaply. We will encourage the standardization of
designs for both rural and public housing, leading to
efficiency and lower construction costs.
Companies that partner with the housing agency and participate
in our social housing projects and certain types of public
housing projects will benefit from exemptions in duties and
taxes on imported building materials. In the medium term,
through our program of industrialization, we will promote the
setting up of local building material producing industries to
produce many of the materials locally thereby making the
houses more affordable.
Finding a solution to the housing problem will help to resolve
many other significant problems. There are many industries
that will spring up to support the construction programmes,
this will lead the creation of many highly skilled and well
paying jobs across various sectors of the economy. Through
various incentives, we would encourage developers to build
houses in less financially attractive areas for our teachers
and nurses to support the health and education sectors.
To make sure that we find long lasting solutions we shall
tackle the housing deficit problem within the broader
framework of other legislative and institutional reforms. We
will promulgate the National Housing Policy and Urban Plan,
Land Use and Spatial Planning Bill to harmonize all spatial
planning laws in Ghana.
We are also committed to completing the restructuring of the
Land Title Registration and the Land Administration Projects
to improve efficiency in land administration. We will ensure
that this important national project is completed within the
shortest possible time.
Finally, Ladies and Gentlemen, we will complete the 6000 units
of affordable housing started under the Kufuor regime. If one
wanted an example of the spiteful attitude that the NDC
brought to government, there is no better example than the
abandonment of this project simply because it was started by
an NPP government. They have had four years, they have not
added a single housing unit, they have denied 6000 Ghanaian
families the right to live in well-constructed houses.
I have taken the time to set out in specific detail our policy
proposals, in order to offer Ghanaians a clear choice.
Vote for me, Nana Akufo Addo as President and I lead an
efficient team to transform the housing industry in Ghana,
create more jobs and improve the living conditions and
accommodation challenges of Ghanaians
It is time to rid this nation of this do-nothing, insensitive
government. They did not come to do anything, they have not
done anything, they are not capable of doing anything; lets be
rid of them, lets vote for the NPP and move Ghana forward.
Thank you, God bless you, God bless Ghana.
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