Towards Affordable Low Cost Housing: Strategies of Low Cost Housing Development for the Low Income Population in Rwanda

Research Article

Austin J Bus Adm Manage. 2017; 1(3): 1015.

Towards Affordable Low Cost Housing: Strategies of Low Cost Housing Development for the Low Income Population in Rwanda

Harelimana JB*

Institut d’Enseignement Superieur de Ruhengeri Musanze, Rwanda

*Corresponding author: Jean Bosco Harelimana, Institut d’Enseignement Superieur de Ruhengeri, Rwanda

Received: August 08, 2017; Accepted: September 11, 2017; Published: September 21, 2017


The issue of affordable housing remains to be interested to the researchers all-over the world. Like elsewhere, in Rwanda the modern technology is being used in housing building towards more affordable house low cost. However, the constraints to obtain affordable houses are still experiencing on Rwanda market and can be regarded as financial, cultural, social, historical and institution framework. The high cost of capital, the high price to rent and to own affordable houses remains to be the main challenge for younger professionals and new tenants. On other side, high loan and mortgage interest rates hindering ownership of affordable houses for the middle and low income household sectors. As illustrated under section of discussions, consumer attitude/culture and level of income are the main factors towards affordable house. However, the Rwandan government may attract foreign investors such United Nations agencies, development banks, international NGOs, public and private partnership, World Bank and derivatives in their program to fund affordable housing in order to reduce the cost of capital and make it easier for all categories towards affordable housing.

Keywords: Affordable housing; finance; Strategies; Challenges; Low cost housing


When it comes to the health and vitality of our communities, affordable housing is the key. The need for quality, affordable homes is an important part of Sustainable Development Goals and the Rwandan vision 2050 as it seeks to evolve into a sustainable community. With the economic issues the world is facing the demand for affordability is greater than ever before [1].

The issue of housing affordability is becoming a more concern for several researchers in many worlds in Africa as well as in Rwanda [1-5]. The poor management of the growth of housing cost has been affecting negatively any African society in terms of finance. Therefore, reducing the effect of housing issues could be a potential benefit to both low and middle income households. According to Parrillo [6], one of the social problems includes housing where it brings issues due to various social, economic and cultural implications. As seen above, the matter of housing issues is threatening low and middle income society [7]. In these circumstances the housing issue is one of the most disturbing structural and functional social problems, with certain cultural aspect. This has been becoming a constraint for some middle-income groups, whereas it had previously mainly been an issue for those on lower incomes.

Thus, the aim of this paper is to identify the actual challenges and way forward related to the affordable and low cost housing. Based on secondary data from previous studies, this study measures different issues namely loan availability, housing affordability, housing scheme’s policy, consumer attitude, neighborhoods, housing quality, economic development. Therefore, it is hoped that the results and discussion of this paper would help to instill more understanding of the real issue related to housing. Because proper knowledge in identifying the main issue of affordable housing can assist the government of Rwanda and stakeholders to handle and effectively resolve these issues, which might affect the citizen as well as the whole county health. Indeed, it clear that though may require more effort from both public and private sectors but working together could lead to low cost affordable housing. For instance, government should provide grants as subsidiaries to soften high loans and mortgage interest rate which would encourage actors to borrow money and invest in affordable housing on low cost.

Literature Review

The modern technology has been involved in housing building towards more affordable house low cost. For instance Antje (2007) argued that compressed earth block technology along with using simple materials and simple construction technique have offered the people in Rwanda the ability to construct a simple, efficient and costeffective house. This simple house has more advantages of a concrete block construction without the cost. Furthermore, CBC [8] added that low cost materials are locally available, affordable and therefore, because of innovation and technology the poor families who constitute high portion of population can afford low cost houses. Indeed, most architects have received some training in design solution for building and construction that use conventional approaches, including low incoming project.

Actors and practices of low cost building materials and technologies

More research and development have been conducted for low cost building materials and technologies all over the world by involvement of many organizations both national and international, as well as non-governmental organizations.

The general speaking here was to lowering construction costs, especially in regard to housing in order to make it affordable to more people who predominantly in the low income households [1,3].

Challenges in the provision of affordable housing in Rwanda

The main constraint to obtain affordable houses can be regarded as financial, social and institution framework [9]. The financial factors tackle middle economy in the country, high cost of infrastructures, low level investments, difficulties in accessing financial resources and escalating cost of building materials. All these factors illustrated above make it tough for poor and middle class to afford house. The challenges do not only include financial factors but also social factors such as population explosion, rapid-rural to urban migration and high poverty levels. As cited by Daniel [10], institutional frameworks including housing policies in place have failed to help a conclusive environment for investment in affordable housing. Indeed, the land in urban areas in Rwanda has been raised in recent years. The speedy influx of people to the urban areas has generated high demand for land causing prices in residential areas to increase so fast. In order to identify the key challenges in the provision of affordable housing in Rwanda the study will consider the key aspects involved in the provision of affordable housing, as discussed below:

Land: In urban areas, land has been highly valued and is mostly in hands of the central government and the local authorities. The other landowners are speculators who looking to make a quick cash.

This has made land inaccessible to the more people including poor and middle class who need it most but cannot afford premium price. Indeed, according to Nabutola [1] the high demand of land with competing interest groups and individuals has pushed prices up.

Infrastructure: The opening of new land for housing development or the improvement of current information settlements require installation and maintenance of infrastructures like water, road, electricity and security [11]. These infrastructure facilities provide crucial component of shelter provision. Indeed, accessibility to sufficient urban basic services will crucially improve people’s economic capacities, heath and quality of life in general. In other hand, Bonyo suggested that lack of trunk infrastructure hindering housing development to the low income sector.

Financial resources for housing

The financial bottle neck is a major limitation factor in housing development. The sources of funds are few and the funds are on high price. Getting qualified for mortgages are still too severe despite the fact that housing is still in short supply. Renaud [12] estimated that Inappropriate fiscal policies on real estate financing, inability to finance house loans to groups, low affordability due to poverty, high interest rates on mortgages, absence of graduated payments of mortgages and lack of access to the large deposits of retirement benefit funds have hindered the development of the housing sector.

The financial set up in the housing market in Rwanda as indeed elsewhere is such that those offering funding seek to make a profit and declare dividends for the shareholders because that is what they are in business for. The money market is expensive due to relatively higher risks that raise interest rates.

Public-private partnership in housing delivery

The common objective of public-private partnership in housing delivery is to boost the productivity of housing sector, increasing housing affordability and improve access to basic infrastructure. Ikekpeazu [13-21] mentioned that in order to achieve the desired output of public-private partnership, the discernment of the housing sector as a vast arena of social problems and a drain on the economy must change. Housing must be considered as significant economic sector with vital linkages to the overall economy of a country.

Investment in affordable housing supports multiple social objectives

The evidence shows that investment in affordable housing supports multiple social objectives. This includes improvements to individual outcomes such as employability, crime, health and wellbeing and community cohesion. It is particularly important to assess the socio-economic impact of building affordable homes in light of the large set of households where demand for affordable homes cannot currently be met [3].

Indeed, this wide set of desirable socio-economic outcomes cannot be achieved through Housing Benefit or other operating expenditure on affordable housing alone. This is because many of these benefits are the result of affordable housing being better able to meet tenants’ needs than alternatives such as housing in the private rented sector. Therefore public investment in affordable housing is vital [1].

As result of investing in affordable housing, it will generate more opportunities for both actors and tenants. For instance, more unemployed people can get job opportunities and tenants could benefit from poorly insulated private sector home to a good quality, insulated affordable home would be less at risk of suffering from hygienic diseases and therefore, could save household expenditure that would be spent on those diseases.


The study has used primary and secondary data affordable and low cost housing measurements that collected from previous studies. Affordable housing and its trends were illustrated in details through critical review of literature. This study focused on the different criteria for affordable and low cost housing assessment. The same study arranged these criteria that indirectly impact affordable housing by examining each of their functions.

Results and Discussions

As depicted above, this study discussed some affordable housing trends using primary and secondary data filtered from previous studies. Different criteria have been discussed in depth in order to provide significant overview about affordable housing.

Strategies in place of driving to words low cost affordable housing

The proposed strategies will be vehicles to enable affordable housing providers to access lower cost debt for longer terms unlocking desperately needed “fit-for-purpose” funding into the sector in Rwanda.

To access the lower cost capital it requires the government, private sector, institutional investors and non-profit organizations to work together in new and collaborative ways (Figure 1).