Stimulating the Supply of Rental Housing by Small-scale Landlords: The Case in Ayigya, Kumasi

Increasing urbanization and rapid population growth has made housing one of the most critical issues in Ghana. Despite the fact that more than half of the population are tenants, the national policy hardly recognizes the value of renting as an alternative tenure option. The huge shortage of rental accommodation in the city of Kumasi vis-a-vis demand manifests the failure of the country's housing delivery system. Ayigya is a sub-urban area in Kumasi whereby 65% of the population are tenants and only a very small population of rental providers. Supply of rental units in the area far lags behind the demand of rental accommodation wherein most of the rental stock are characterized by overcrowding and lack of basic services. The small-scale landlord is identified as a private actor that has a potential to contribute positively to the supply of rental housing in Ayigya. The main problem identified in the study is that the landlords are not expanding their stock thereby increasing the shortage of rental accommodation. This research seeks to understand the nature of landlords in Ayigya and identify the factors that promote and/or inhibit the small landlords to expand their rental stock. The study further aims to select suitable instruments that could be recommended to stimulate more investments from the small landlords. The study being exploratory employed both quantitative and qualitative research instruments namely: survey, in-depth interviews, case studies and a focus group discussion. Surveys are conducted to both landlords and tenants in Ayigya while in-depth interviews are utilized for key informants from the government. A focus group discussion with landlords complemented the survey results. To draw out lessons and successful strategies in supporting small-scale landlords, three case studies are chosen on the basis of replicability, success levels and relevance. The main research findings highlighted that the small-scale landlords in Ayigya have high level of desires to produce more rental units but certain factors are hindering them to do so. Most constraints are a result of a lack of a basic framework for a healthy functioning rental housing market such as: lack of finance, access to affordable serviced land, high costs of building materials and labour, unrealistic planning and building regulations, inadequate provision of infrastructure, and presence of rent control. The study concludes that there is a need to remove the constraints faced by small-scale landlords and offer incentives to stimulate new constructions by this group of providers. Decontrol of rent distribution in combination with facilitating access to credits and loans, affordable serviced land, tax incentives, and settlement upgrading are few of the instruments which will enable small landlords to expand their stock. Likewise, there is a need for the Ghanaian government to formulate a national housing policy which recognizes the value of rental housing as an alternative tenure option and an important sector that can positively contribute in addressing the housing needs of the country.