Rwanda has stepped up efforts to provide affordable housing amid an overwhelming demand for quality low cost housing.

Rwanda Social Security Board (RSSB) has announced plans to build up to 10,000 affordable housing units in Rusororo, one of many ongoing similar projects in different parts of the city.

These, however, still feel like an uphill climb considering the country's population growth rate and proportion of the low income segment in the face of a rising cost of living.

“We are trying to rationalize our land bank for our upcoming projects. One of them is the Rusororo affordable housing estate, on which we shall build up to 10,000 affordable units to address the housing needs of the country’s low income population” said Philippe Watrin, RSSB chief investment officer.

He said they are currently working on getting locally made materials to enable them supply houses that are affordable.

“It’s not an easy equation to solve. We are assessing the right materials to use so we can see that the affordable housing units we build fit into the income capacity of the people” he said.

A sharp rise in the cost of land and construction materials plus a general economic contraction that has hit low income earners has shrunk the chances of many  Rwandans to own homes.

But tough economic realities of many losing sources of incomes and others living hand to mouth means many cannot even take advantage of the subsidised housing schemes.

Low uptake

An example is the Gira Iwawe affordable housing scheme established by the Development Bank of Rwanda (BRD) in 2019 with $150 million funding from The World Bank.

The scheme meant to support low income earners own their first homes had a target of 6,000 beneficiaries in the five years to 2024, but it has only garnered 300 beneficiaries so far.

Bank officials say repayment capacity has been a big problem and it has significantly affected uptake as many of those targeted are unable to make the financial commitment.

The scheme, which works with a number of banks, targets first time home owners or families that earn between Rwf1.2 million to as low as Rwf200,000.

An aspiring home owner identifies a house with a value of Rwf40 million then they approach one of the banks for a mortgage payable in 20 years at 11 percent interest.

The scheme was also hindered by shortage of real estate projects to supply the needed houses. The national land use and development master plan estimates Rwanda’s population to hit 22.3 million by 2050.

With 2.8 million housing units in 2019, the country is required to build 150,000 units every year until 2050 to meet the 5.5 million units the country will need to house its population.

This is a tall order given that between 2010 and 2020 only 28,000 state-financed dwelling units were delivered through formal channels.