1. Why Affordable housing?
The Government of Rwanda targets to increase urbanization rate from 18% to 35% in 2024 to support economic growth. An urbanization of 35% by 2024 is the expression of an increase of urban population by about 2.7 Million people. The Housing Market study done in City of Kigali (IGC 2018) showed that 700,00 new dwelling units were needed by 2028, where 70% dwelling units lay in Affordable Housing category. The Government of Rwanda initiated the Affordable Housing program to find the solutions of housing challenges to low and middle income communities all over the country.
2. Affordability based on Household Income
Affordable housing program targets low and medium income households with monthly income ranging between 200,000 Frw and 1,200,000 Frw, considering that Household should not spend more than 30% of its monthly income on housing which applies for:
- Renting to own.
Families who pay more than 30 percent of their income for housing are considered cost burdened and may have difficulty affording necessities such as food, clothing, transportation and medical care. (UN Habitat).
Housing typologies: apartment of 1 to 3 Bedroom with net floor area ranging between 30 and 95 Sqm,
Construction technology: any good and cheap technology can be used,
Housing prices: from 5 Million to 35 Million ($6,000 to $40,000).
3. Targeted Beneficiaries
- Low and middle income household ranging from 200,000 Frw to 1,200,000 Frw,
- Should be citizen or permanent resident in Rwanda,
- Should be at least twenty-one (21) years old, except if the beneficiary is a full orphan,
- Not possess a real estate or a house in an urban area or lessee of such estate with a remaining lease period of above ten (10) years or not to be legally married to a spouse of an owner of such real estate or house,
- Not have a net yearly income above a value set by the Minister in charge of housing once every two (2) year,
- Commit him/herself not to sell a Government supported Affordable and High density housing unit within a period of at least ten (10) years by signing a declaration.
4. The Government support in Affordable Housing Projects
The beneficially of this project are low and middle income earners as stipulated in the Prime Ministers Instructions (PMI) No 001/03 of 23/02/2017 which also determines the conditions and procedures for obtaining Government support to Affordable and High density housing projects.
The Government support to the developer who fulfills the affordability requirements includes:
â€¢ Basic infrastructures which includes (materials and technology for roads, water treatment and supply, electricity, energy and street lighting, communication, accessibility to public transport and public transport services, and social amenities),
- Tax holiday and Reduction by 50% Corporate Income Tax (CIT),
- Cheap development loan through Housing Fund,
- Assisting the developer to purchase land the developable land,
- Facilitation in setting up manufacturing plant.
The Government support to the Buyer/Beneficiary who fulfills conditions of acquiring house in supported Affordable Housing Projects includes:
- Cheap and long term loans through Affordable Housing Fund,
- Pay only cost of House excluding cost of Infrastructures.