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Nana Akufo-Addo's Speech To GREDA
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Nana Akufo-Addo
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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.

Hostels For

Hostel Rooms
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.
Source: Communications Directorate, NPP/ Ghana

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