DELIVERING LOW-COST HOUSING

Transcription

1 DELIVERING LOW-COST HOUSING A one-day symposium focusing on the synthesis of Local and Global strategies for sustainable development in Ghana BY HOUSING THE MASSES September 8, 2011

2 OUTLINE OF PRESENTATION INTRODUCTION BACKGROUND OBJECTIVE STAKEHOLDERS DEFINITION AND COMPONENTS COST CUTTING MEASURES CASE STUDY LESSONS LEARNED RECOMMENDATIONS CONCLUSION

3 Terminologies INTRODUCTION Low cost housing Could cut across income groups but below the general market price Affordable housing: Could also cut across various income groups and affordable to them but not necessarily below market rate Social housing: Could cut across income groups but is subsidized Low-income housing: Specifically affordable to the low-income earner

4 Defining Low-income housing in Ghana Housing that is affordable to income earners between the very low and middle low-income segment of society; that means people who earn an income within a period People who earn from Ghc4 ($2.66) a day (Ghc 112 ($24.66) a month) to about 25ghc ($16.66) a day (700ghc ($466.66)a month) Assumption for Housing Need for the Low- Income in Ghana: 80.5% fall in the low-income housing bracket and occupy 1 or 2 rooms for housing (UN-Habitat Urban Housing Profile 2010) Affordable housing for this income group should be less than 1/3 of their income meaning between Ghc 37.3 ($24.86) Ghc ($148.66) monthly for $ $15,000 houses BACKGROUND (Using Ghana Home Loans Mortgage Calculator)

5 OBJECTIVE To share the experience of Housing the Masses in the delivery of Lowcost housing Soliciting new ideas from participants to improve our contributions to housing delivery

6 STAKEHOLDERS STAKEHOLDER Beneficiaries ROLE Save towards the down payment and initial costs for acquiring a mortgage Develop a culture of loan repayment and make repayment a constant in their monthly expenditure Re-orient themselves towards using local building materials and acquiring house sizes for their needs and not their wants Government Development Partners Low-cost housing Construction Institutions Provide policy direction on low-income housing Provide annual budget for subsidizing low-cost housing through provision of subsidized land, infrastructure development (electricity, water and drainage) Planning standards should be favorable to low-income housing * Local governments to plan development with land owners Provide technical assistance and grants towards technical assistance, percentage of down payments, guarantee for mortgages Update themselves on effective and time cutting construction technology Acquisition of equipment Equip themselves with effective construction management skills for cost efficiency

7 STAKEHOLDERS CONTINUED STAKEHOLDER Financial Institutions Academia Housing and Infrastructure Construction Research Institutions Media Professionals ROLE Provide reasonably low-interest rates especially through Corporate Social Responsibility Enhance their skills and develop database to work with the large informal sector of the low-income group Include low-cost housing development in curricular for professions in the built environment Provide continuous research on low-cost building materials and technology, especially using local materials Publish and advertise low-cost buildings that use mostly local building materials Market buildings that use local building materials by carrying them on programs periodically Design for the low-income and make the buildings aesthetically pleasing but structurally sound Land Owners Make available land free of all encumbrances Plan with local government in the development of their lands

8 DEFINITION AND COMPONENTS OF LOW-INCOME HOUSING Definition: Housing (rental or ownership) affordable to the low-income (extremely low to middle-low-income groups) Housing = houses and infrastructure facilities Main Components of Low-Cost Housing Finance Land Building Material & Technology Design Project Management Important Blocks for General Housing Delivery Functional in Design Structurally Sound Aesthetically Pleasing Cost Effective

9 FINANCE Low-Income Housing Finance Supply Demand Financial Institutions (Construction/ Developers Finance) Subsidies (Gov t, Donors) Internal Cross Subsidies Financial Insts (Mortgages) Gov t (Rent or mortgage subsidies) Beneficiary savings for down payment Sinking fund (coops) Low-income housing finance needs a mixture of different sources of funds Need for adequate mobilization

10 NECESSITIES FOR SUSTAINABLE LOW-INCOME HOUSING FINANCE IN GHANA How can we provide sustainable financing for lowincome housing? Through established housing finance trusts/fund banks targeted to the income group Direct or indirect guarantees by government or a recognized national or international organization to back such institutions National sensitization and orientation on good savings culture and repayment of loans Thus there should be a clear national housing finance policy, plan or guidelines that addresses the low-income group

11 HOUSING FINANCE REALITY CHECK House cost for Target group: $24.6- $155.5 = $2,500 $15,000 Mortgages: $1,875 - $11,250 Required deposit: $625-$3,750 Monthly repayment = $ $ Terms and Conditions of payment $ $ Loan term: 15 years Interest Rate: 13.5 pa Bottom line: Low-income housing should be subsidized in one way or the other especially for those in the lower tier, whether for rental or ownership housing Source: Ghana Home Loans Mortgage Calculator

12 LAND Generally very complicated and expensive, thus making housing delivery difficult and expensive and resulting sometimes in the development of slums and illegal settlements Subsidy for land is crucial to affordability for the lowincome and could be from any land owner, through partnership (Government, traditional authorities, families, individuals) Land size usually influences the type of buildings single storeys or multi-storeys Location of land usually determines its price so you often find low-income housing projects located outside cities, making them ineffective Serviced land lowers construction cost and lower cost of land also results in lower construction cost

13 DESIGN Compact Functional (should suit user s basic needs) Building Materials (cost effective but sustainable) Adaptable Cost Effective 2 Bedroom Unit 80sqm Overall, design should be affordable to the target group

14 BUILDING MATERIALS AND TECHNOLOGY Locally produced and recycled materials cut down cost bricated-containers.htm CSEB Building -Joint UNDP/UN- Habitat/HM-DRH Project Building Forms: Combination of Rectangular (Male)and Circular (Female) Shaped Rooms Joined by short walls Container Housing in Amsterdam CSEB Building by Hydraform TECHNOLOGY Should be simple but effective Should be low-cost Should be sustainable and not create other problems (eg. Environmental Bamboo building by Sabre Trust at Ayensudo

15 PROJECT MANAGEMENT It is important to have a supervising Architect or Project Manager to ensure quality control Selected contractors and or builders should be well versed in the type of materials and technology used Both skilled and unskilled labor should be closely supervised for prudent and correct use of materials to avoid excessive waste Local labor also reduces cost

16 COST CUTTING MEASURES IN HOUSING DELIVERY Ensure Low cost financing, especially for the supply side Significant down payment through beneficiary cash savings or in-kind payment (produce) Local labor and longer contracts for artisans could reduce labor cost Simple construction technology reduces labor cost Partnerships on land acquisition and Grants or government subsidies ( land, infrastructure provision, developers tax holidays, technical assistance, establishment of a low-income housing finance institutions or fund) Inclusion of trainees to cut cost of labor

17 CASE STUDY Malzeri Demonstration Building Construction Project (Grant (Finance and Technical Assistance), Government Contribution, Community Contribution, Hands on Training)

18 TRAINING ON BRICK & BLOCK MOLDING Use and Maintenance of Soil Identification CEB Machines Laying of Bricks TECHNOLOGY TRAINING IS PROVIDED BY HOUSING THE MASSES & THE DEPARTMENT OF RURAL HOUSING Soil Sieving Making of Bricks Curing of Bricks Mixing of Soils and Cement Proper handing of Brick Block Molding

19 CONSTRUCTION TRAINING Construction of building profile Casting of foundation column concrete Making of foundation mats and starter bars for reinforcement Making of foundation and column trenches Finishing of foundation column concrete Training is given on the job so the community completes building construction by the end of the training period Training in both sandcrete and landcrete blocks Training is very important to ensure project sustainability Mixing of rich concrete for columns Setting of foundation footing mats

20 CONSTRUCTION TRAINING CONT D Construction of foundation footing Filling of foundation with laterite Ramming of laterite filling Setting of concrete concrete floor slab by the DRH and trainees Casting of concrete floor slab Raising of walls Development of windows and doors in walls Tying of Lintel and beam reinforcements

21 CONSTRUCTION TRAINING Roofing of building Placing of roofing sheets on building Building Roofing Painting of building Painting of final coat - OPD OPD Mixing of rich concrete for columns Setting of foundation footing mats

22 CONSTRUCTION TRAINING OPD Painting of building Mixing of rich concrete for columns Setting of foundation footing mats

23 CONSTRUCTION TRAINING OPD Painting of building Even with the high administrative cost of the demonstration training building construction project, the cost per square meter was GHC whereas that for its equivalent in traditional sandcrete blocks in the same location is GHC Mixing of rich concrete for columns Setting of foundation footing mats

24 LESSONS LEARNED 1. Cost of land and infrastructure significantly add to construction cost especially for the low-income housing 2. The high cost of both demand and supply side of housing finance leads to the high cost of housing including that for the low-income 3. Houses built with local materials will be accepted by the public especially if they are aesthetically pleasing 4. Involving beneficiaries in building design ensures functional and acceptable design 5. Move away from large buildings and large plots 6. Default on loans leads to high interest rates 7. Low-income earners are usually in the informal sector thus the need for formalization, to benefit from our young mortgage system

25 RECOMMENDATIONS 1. Housing should be decentralized to the Metropolitan, Municipal and District Assembly level to allow multiple interventions 2. A clear policy on land for housing and housing finance that include the low-income should be developed and operationalized by the government (national and local) 3. Government should facilitate the establishment of a low-income housing finance fund or institution that will deal with both rental and ownership housing for the lowincome earner 4. Local building materials should be marketed by research institutions (BRRI), the housing ministry and the media to make the public appreciate them 5. Schools with professions in the built environment should train students to build for the low-income 6. Our formal financial system should be provided the capacity to work with the large informal low-income segment of our society 7. Ghanaians should cultivate the culture of paying promptly their rent and loans to ensure reduced risk and lower interest rates 8. A good system of identification should also be established to formalize the large informal low-income segment of our society

26 CONCLUSION Cost of housing in Ghana can only be effectively addressed through a comprehensive approach that include: sustainable lower cost demand and supply side financing easily accessible and lower cost land Structurally sound, aesthetically pleasing and functional, designs that meet the needs of users With that we can achieve safe, secure, decent and affordable housing to all. THANK YOU