How affordable is affordable housing in Ghana?


The definition of affordable housing has been and still continues to be a controversial issue all over the world, both in academia and industry. Recently, Ghana adopted one of the widely used definitions, the ratio measure which states that, a housing unit is deemed affordable whenhousehold expenditure either in terms of rentals and/or purchasing power does not exceed 30 percent of gross income.

In this respect, the Ministry of Works and Housing (MWH) prescribes a minimum of two bedroom (BR) housing unit as the recommended benchmark towards achieving anything close to social equity in housing standards.

This extract provides an overview of a recent study undertaken by the Centre for Settlements studies, KNUST, seeking to understand affordable housing definition from the perspective of low income informal earners. While the study focuses on a specific target group, it is hoped that it will help provide critical insights on the background information needed for engendering a national discourse towards consensus building on housing affordability in the Ghanaian context.


The study was undertaken in three urban settlements in Kumasi, namely; Atonso, Ayigya-Zongo and Asawasi.  The respondents targeted were low income workers in the informal economy. Typical households in these settlements live in one room multi-habitation housing units popularly called compound houses.Table 1 below provides asummary of the affordability analysis undertaken on the data gathered.

Column A shows the typical income of the households in the selected communities while column B shows the typical rent given their current housing status. Column C is the rent/income ratio of the respondents based on their current housing situation while column D is therent/income ratio established using an average market rental of GH¢ 250.00 in Kumasi for a standard two bedroom “self-contained” house.


Data collected from the respondents in low income earners in Kumasi indicate that the average rent/income ratio for the households in their current accommodation which are typically compound houses is 8%, far below the 30% benchmark adopted by Ghana.

However, if one is to go by the Ministry of Works and Housing’s standard of a minimum of two bedroom “self-contain”housing unit using conventional materials, the rent/income ratio averages more than 50%, exposing the stark reality of extreme difficulties the Government is likely to face if it has use his standard in providing housing for low income earners in the country. It would mean that, most low income earners will not be able to access these houses based on their current income.

What then should be the solution? One option would be for the Government to provide housing subsidies for low income earners but the question is, Is the Government ready to take on that responsibility in the midst of mounting pressures from  all corners. The other alternative isfor the Government to look towards design solutions geared towards cost minimization in the use of construction resources.

Generally, it is acknowledged that, households consider their social and material experiences in making housing choices. In this instance, the income level of the respondents dictated the type of housing choice with all the rental values falling reasonably well below the 30 percent benchmark. However, it is also clear that these housing units are sub-standard and do require upgrading. The policy implication as stated earlier will be for government to ensure cost-efficient designs that can accommodate rentals that are reasonably less than the 30 percent benchmark.

The recently affirmed Sustainable Development Goals (SDGs) enjoin all Nations to strive for affordability and energy efficiency as a pathway for development. The evidence indicates that, the use of local materials such as laterite based soils can help reduce housing cost by about 60 percent. Ghana is in crisis as far as housing the populace is concerned and there is urgent need for Government to show exemplary leadership by heavily promoting the use of local materials in public buildings.

Given the strategic position of the Ghana Real Estate Developers Association (GREDA), as major stakeholders in the housing industry, there is the need for Government to begin engagement with them through a Public Private Partnership (PPP) arrangement. In this respect, government could introduce incentives for GREDA members who are innovative with the use of local materials towards the delivery of affordable and energy efficient housing units.

Defining housing affordability is an enigma. Despite several school of thoughts, different societies tend to have different conceptions on how it should properly be defined. Nonetheless the ratio approach is quite popular all over the world and has also been adopted by Ghana. However, the ratio approach works best when among others, housing supply exceeds demand which is not the case in Ghana.

Affordability analysis of three urban settlements in Kumasi has shown that it would be highly impossible for Ghana to attempt to provide decent housing for low income earners going by the affordability measure adopted. This sets the tone for consensus building and innovative approaches especially towards using local materials in housing delivery.


The writer acknowledges the contribution of Akwasi Andoh Bempah who undertook the data collection for his MPhil in Urban Management Studies at the Centre for Settlements Studies, KNUST.

Divine Affordable Housing

Source: myjoonline.com

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