Africa's Housing Challenge: The Case of Accra

Accra's housing crisis exemplifies the challenges facing many rapidly growing African cities. While international organizations have promoted market-based housing policies since the 1980s, leading to a real estate boom, the shortage of affordable housing persists. Accra, for instance, faces an estimated deficit of 300,000 housing units despite significant construction in its center. This disparity stems from the disconnect between formal housing market costs and the realities of the informal economy, where approximately 74% of Accra's workforce earns low and unstable incomes, precluding access to traditional housing finance. Consequently, the majority of residents are excluded from the formal market, with 58% residing in informally constructed housing and 65% of households sharing single rooms.

Research on Accra's urban redevelopment reveals that policies aimed at stimulating the real estate sector through the sale of state-owned land have not yielded affordable housing solutions. Instead, the pursuit of profit by developers and the use of land as a tool for political patronage have resulted in an oversupply of under-occupied luxury properties.

Urban Redevelopment in Accra

Historically, Accra's housing production was dominated by state-owned enterprises and informal self-builders. However, with the adoption of neoliberal structural adjustment policies in the 1980s, Ghana shifted to a market-driven approach, privatizing public housing and positioning the state as a facilitator of private investment through incentives like tax breaks. This policy change amplified the role of commercial developers, leading to the proliferation of gated communities. However, this expansion was hampered by land ownership disputes rooted in customary land tenure systems.

The solution appeared to be the provision of state-owned land for private development. Since the 1990s, substantial tracts of state-owned land in central Accra, previously occupied by colonial-era bungalows, were allocated to developers. These areas were deemed underutilized, and redevelopment was seen as a way to increase density and housing supply. Despite official policy stipulating open advertising and competitive bidding for these plots, a "land grab" occurred. Valuable land was often allocated to politically connected individuals at below-market prices, highlighting the use of state-owned land as a resource for political patronage in Ghana's competitive political landscape.

This privatization fueled a construction surge in central Accra, with luxury apartments and townhouses replacing older bungalows. However, this development exacerbated housing inequality. These new properties, often priced upwards of US$80,000, are unaffordable for most Ghanaians. They are frequently purchased as rental investments, primarily leased to employees of multinational corporations.

Developers justify their focus on the high-end market by citing high construction costs. This has led to an oversupply of luxury properties, many of which remain vacant. Despite this, capital continues to flow into real estate due to the potential for land speculation and a scarcity of alternative investment opportunities in productive sectors. Moreover, high-end real estate is increasingly recognized as a vehicle for money laundering.

The Challenge of Affordable Housing

Addressing the challenge of empty luxury properties in a city with a 300,000-unit housing deficit requires exploring potential solutions. While participatory initiatives involving community groups have shown promise in improving housing conditions in informal settlements, scaling these efforts remains a challenge. Within the formal real estate sector, there's a growing recognition of the untapped market for affordable housing. Governments have encouraged this shift, forging public-private partnerships for large-scale "affordable" housing projects in peri-urban areas. However, the emphasis on subsidized homeownership, rather than social rentals, may still exclude low-income groups. Therefore, informality is likely to remain the dominant reality for the urban poor in the foreseeable future.