2. The Income-housing Affordability Nexus in Kigali City Zoning Regulations
2.1. Households Income Sources in Rwanda
2.2. Housing Development and Market Trends in Kigali City
- Social housing: A housing typology that is affordable by households below the poverty line, earning less than 120.00 US dollars per month. This is under-development by the government through a subsidy system;
- Affordable housing: This is demand for households earning between 120.00 and 772.00 US dollars per month. This is the largest segment of the housing market. These households have some payment capacity and could access a special rental market which may include the rent-to-own leasing mechanisms, etc.;
- Mid-range housing: Targets households whose incomes vary from 772.00 to 4110.00 US dollars per month. Households whose income is less than 1320. 00 US dollars can also buy these dwellings under the affordable housing scheme and apply for the related bank loan, as stated in the current affordable housing schemes. Others can use their income or apply for mortgage financing to fund their houses;
- Premium housing: This addresses housing demand from the high-income group whose monthly income is greater than 4110.00 US dollars per month.
2.3. Regulatory Framework for Housing Development in Kigali City
3. Analytical Approach to the Housing Affordability
- The PIR below 3 reveals the general situation of “affordability” in which the household is sufficiently able to purchase the house, without difficulties in covering other basic needs;
- The PIR beyond 3.0 to 4.0 shows that the house is “moderately unaffordable”, but its cost does not have much negative impact on further household consumption;
- The PIR beyond 4.0 to 5.0 shows that the house is “seriously unaffordable”. Households must adjust the housing type to their income levels, otherwise the cost for housing can seriously affect their living conditions;
- The PIR beyond 5.0 portrays a situation where the housing is “severely unaffordable”, even if the household may extend the loan period.
4. Data Sources
5. Results Presentation and Discussion
5.1. Trends in Housing (Un)Affordability Based on Households’ Incomes
5.2. Strategies to Promote Housing Affordability in Kigali City
5.2.1. Access Through Private Low-cost Rental Housing
5.2.2. Progressive Housing Ownership through Rent-to-Own
5.2.3. Decreasing Housing Costs and Change in Investment Strategies
5.2.4. Access through Self-help Housing Development with Local Materials
5.2.5. Improving the Existing Houses through Informal Settlements Upgrading
5.2.6. Slum Conversion into Shared Residential Apartments
Conflicts of Interest
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1 US dollar was equivalent to 906.6 Rwandan Francs on 04 September 2019. See https://www.bnr.rw/index.php?id=23.
Access to housing for people whose monthly income is less than 220.63 US dollars will be promoted through the social housing schemes that the government has recently started to implement across Kigali city.
This type of zoning is applied in urban fringes, which are still rural areas.
Highly affects the housing affordability.
Moderately affects the housing affordability.
Data were acquired from the price lists on different housing packages which are developed by RSSB.
The exchange rate was 886 Rwandan Francs for 1 US dollars on 17 January 2019.
These costs were calculated based on different housing designs and estimates of their costs collected from different engineers and architects operating on the housing market in Kigali city.
|Housing Category||Number of Unit||Percentage|
|Instruments and Tools||Indicative Provisions Related to Housing Development|
|Section 5.5 promotes the good management of urban land through:|
- Densification in the planned residential areas through the development of high-rise buildings and horizontal semi-detached houses;
- Restructuration of informal settlements, including the expropriation of land rights, clearance of houses located in public areas, provision of basic infrastructure and services and resettlement of displaced communities;
- Real estate development through the sale of state land to individuals or real estate agencies in order to replace existing buildings with new ones that are bigger, taller, and more luxurious;
- Production of a high number of buildable plots and their diversification, so that they can accommodate the highest number of settlement units;
- Promotion of access to housing funding schemes.
|National human settlement policy (2009)||Principle 3.1: The Government of Rwanda recognizes the fundamental right to housing for every citizen. It is determined to provide the population with easy access to decent housing and improve their housing conditions.|
|Strategy 2.2: Rehabilitation of residential areas should give priority to home security for their residents, by means of various solutions including rehousing.|
|Organic law repealing organic law n° 08/2005 of 14/07/2005 determining the use and management of land in Rwanda (2015)||Article 2 allows for the expropriation of the private land for public interest, including the development of social and affordable housing.|
|Law N° 32/2015 of 11/06/2015 relating to expropriation in the public interest (2015)||Article 7 grants the public agencies or private investors the rights to carry out the expropriation for the implementation of various urban development projects, including the construction of affordable houses.|
|National Urbanisation Policy (2015)||The densification pillar promotes urban compactness, including the development of high building densities for different categories of income group.|
|National housing policy (2015)||Section 3.2 promotes access to housing for all people;|
Housing development options include: private urban rental housing; shared condominium ownership; rent-to-own; owner mortgage; self-construction with local materials mainly sourced on site; and incremental housing development and improvement;
Section 3.3 supports affordable housing development: a housing unit whose cost is around a third of the household’s income.
|Law n°15/2010 of 07/05/2010 creating and organizing condominiums and setting up procedures for their registration||Article 3 and 4 allow different property owners to own and develop a land plot, like the construction of shared apartments in a condominium tenure.|
|7 Year Government Programme: National Strategy for Transformation|
|The priority area 5 of the social transformation pillar promotes the improvement of household living conditions through:|
- The relocation of households living in in high-risk zones through the development of affordable and sustainable housing models for urban and rural areas;
- Operationalization of the affordable housing fund to facilitate citizens to acquire affordable and decent housing. The fund will offer affordable interest rates to both private sector and beneficiaries.
|Zoning Category||Types of Residential Housing Unit||Maximum Number of Floors||Total Areas in Km2 by 2040|
|R1: Single-family residential||All types of single-family houses in form of a detached villa||G3 + 1||17.23|
|R1A: Mixed single-family residential||All types of single-family houses and low-rise apartments: detached and semi-detached Villas||G + 1||57.73|
|R1B: Rural residential4||All types of single-family houses: detached and semi-detached villas||G + 1||18.66|
|R2: Low-rise residential||All types of single-family houses and low-rise apartments: detached and semi-detached villas||G + 3 (apartments)||35.48|
|R3: Medium-rise residential||Low- and medium-rise apartments, detached and semi-detached villas.||G + 7 (apartments)||38.45|
|R4: High-rise residential||Low- and medium-rise multifamily and high-rise apartments||G+15 (apartments)||1.53|
|Real Estate Developer||Housing Package||Housing Price in US Dollars||PIR: ≤3.0|
|PIR: >3.0 ≤ 4.0|
|PIR: >4.0 ≤ 5.0|
|PIR: > 5.0|
|% of Households||Income Range||% of Households||Income Range||% of Households||Income Range||% of Households||Income Ranges|
|Abadahigwa Kuntego Ltd.||3-bedroom house||30,535||19.62||902.93–1354.41||15.89||677.20– 846.50||9.35||564.33–620.77||55.14||225.73–507.90|
|Groupe Palmeraie Développement||2-bedroom, 1st and 2nd floor||32,500||19.62||902.93–1354.402||15.89||677.2–846.5||9.35||564.33–620.77||55.14||225.73–507.9|
|2-bedroom, 2nd and 3rd floor||36,500||15.17||1015.8–1354.402||12.15||790.07–959.37||13.54||620.77–733.63||60.75||225.73–564.33|
|2-bedroom, ground floor||39,000||10.28||1128.67–1354.402||13.08||846.5–1072.23||12.15||677.2–790.07||64.49||225.73–620.77|
|3-bedroom, 1st, 2nd & 3rd floor||42,500||8.41||1185.11–1354.41||11.21||902.93–1128.67||12.15||733.63–846.50||68.23||225.73–677.20|
|(Un)Affordability trends||Affordable||Moderately unaffordable||Seriously unaffordable||Severely unaffordable|
|Household Details||Housing Developer|
|Abadahigwa Kuntego Ltd.||Groupe Palmeraie Développement||Shelter Afrique|
|Percentage of surveyed households||Monthly income in $||Annual income in $||Cumulative percentage of surveyed households||3 bedroom||2 bedroom, 1st and 2nd floor||2-bedroom 2nd and|
3rd floor and
|2-bedroom Ground floor and parking||3-bedroom 1st, 2nd & 3rd floor||1-bedroom||2-bedroom||3-bedroom||4-bedroom|
|Number of Units and Unit Price|
|(Un)Affordability trends||Affordable||Moderately unaffordable||Seriously unaffordable||Severely unaffordable|
|Household Details||Housing Developer|
|Groupe Palmeraie Développement||Shelter Afrique|
|Percentage of surveyed households||Monthly income in $||Annual income in $||Percentage of surveyed|
|Cumulative percentage of households||3 bed room||2 bedroom, 1st and 2nd Floor||2-bedroom 2nd and 3rd Floor and|
|2 bedroom Ground Floor and parking||3 bedroom 1st, 2nd & 3rd Floor||1 bed room||2 bed room||3 bed room||4 bed room|
|Number of Units and Unit Price|
|(Un)Affordability trends||Affordable||Moderately unaffordable||Unaffordable|
|Less than 30% of household income||Between 30% and 40% of household income||Over 40% of household income|
|Factors for Housing Unaffordability||City and Country||References|
|Nairobi (Kenya)||Kampala (Uganda)||Dar Es Salaam (Tanzania)||Kigali|
|Low household income||++5||++||++||++||[29,41,65,75,76,77,78]|
|High construction costs||++||++||++||++|
|Limited access to bank loan||++||++||++||++|
|Taxes on the investment||++||++||++||++|
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