In the bustling city of Accra, Ghana, a wave of gentrification is forcing residents like Cecilia Nyametse, a janitor, into dire living situations. Struggling with the soaring costs of rent in Cantonments, an affluent neighborhood, Cecilia has resorted to squatting in a security office on a construction site for the past nine months. She represents the thousands who find themselves unable to cope with the exorbitant rents in the city.
This issue doesn’t discriminate based on income levels. Isaac Ansah-Addo, a doctor supporting a family of five, relocated from Accra to Kasoa, an area on the city’s outskirts notorious for its high crime rate. The reason? Escalating rent costs. Isaac was paying an upfront sum equivalent to US$3,360 for a three-bedroom house in Spintex, a suburb of Accra. Despite earning US$500 monthly, he found himself financially strained, depleting family savings to cover accommodation expenses. Relocating to Kasoa, where his rent dropped to US$95 per month for the same space, became a more sustainable choice.
Ghana’s real estate sector, fueled by urbanization and a burgeoning middle class, has experienced tremendous growth. However, this surge has led to an unprecedented spike in property prices, rendering homeownership increasingly unattainable. On average, a one-bedroom house now fetches over US$100,000 and can soar up to US$1 million, as per meqasa.com, an online marketplace.
Compounding this issue, landlords frequently demand a year’s rent upfront, blatantly flouting the six-month limit stated by rent laws. The lack of housing supply emboldens property owners to disregard regulations, with the Rent Control Department – the sector’s regulator – struggling to enforce compliance due to logistical constraints.
In response, the government has initiated the National Rental Assistance Scheme, offering rent loans to aid low- to middle-income earners in managing advance payments. This program assists tenants in securing accommodation based on their income levels, with the government directly paying the hefty upfront amount to landlords, subsequently repaid by tenants in manageable monthly installments.
However, despite these efforts, challenges persist. The exorbitant rents have compelled individuals like Nyametse to resort to squatting in uncompleted buildings, a predicament shared by many seeking employment opportunities in Accra. These circumstances have led to the proliferation of squatter settlements and slums, accommodating approximately 58 percent of the urban population, with an annual growth rate of 1.8 percent.
Simultaneously, the burgeoning real estate market has become a lucrative avenue for private landlords, selling their properties to commercial firms that repurpose them into offices and luxury apartments. The rapid transformation of residential spaces into high-end developments is displacing long-standing communities, often driven by demand from the African diaspora and investors.
This trend has triggered concerns from groups like the Coalition of La Associations (COLA), striving to safeguard indigenous interests against government leasing of lands to private developers without consulting local communities. The scarcity of affordable housing is pushing lower- to middle-income earners out of the market, posing a risk of abandonment in prime areas within the next decade.
Moreover, the practice of listing rents in US dollars, while catering to the purchasing power of the African diaspora, violates Ghana’s fiscal laws, prompting criticism from economic and regulatory bodies. The dollarization of real estate transactions poses economic risks, contributing to currency depreciation and liquidity shortages.
While the real estate sector argues the necessity of pricing in foreign currency due to market volatility, this practice exacerbates housing challenges for the ordinary Ghanaian. The implications extend beyond economic concerns, as environmentalists highlight the detrimental impact of rapid development on Accra’s ecological balance, risking ecological disasters such as flooding due to the loss of green spaces.
In the face of these challenges, stakeholders, regulators, and community leaders must collaborate to devise sustainable solutions that ensure equitable access to housing while preserving Accra’s socio-environmental fabric.
