Vice President Dr. Mahamudu Bawumia has described implementation of the National Rental Assistance Scheme (NRAS) a new pathway for government to streamline the rental sub-sector in respect of the quantity and quality of rental housing.
The Scheme, he said, will provide low-interest loans to eligible Ghanaians to enable them to pay rent in advance in partnership with the private sector and be repaid on a monthly basis to match the tenure of the rent.
He indicated the scheme will, however, be supported by a bank guarantee to ensure sustainability.
Addressing the launch of the NRAS on Tuesday January 31 2023, the Dr. Bawumia stated successive governments have instituted several housing policies geared towards increasing access to various housing options across the country that have mainly concentrated on home ownership services.
According to him, globally however, rental housing forms an integral part of a well-functioning housing market and plays a critical role in increasing access to affordable housing options, particularly for the youth and low-to-middle-income groups.
He said, “As a people-focused government, providing meaningful shelter for citizens has formed a significant part of our developmental goals, and measures taken to address problems associated with the housing sector, especially the rental housing sector, have remained vital to our development agenda.”
“The scheme forms part of measures to enhance tenants’ creditworthiness and reduce the need for large rent advance requests by landlords.”
The Vice President disclosed that the NRAS will target individuals in the formal and informal sectors with identifiable and regular income and the rent advance loans will be paid directly into landlords’ bank accounts who would also have to register with the Scheme.
He stated that the eligibility criteria that have been adopted in the selection of beneficiaries for the Scheme does not only support the call to synchronise all platforms with the National Identification System but also the data produced from the implementation of the Scheme will facilitate government efforts at expanding its revenue stream through the improved collection of Rent Tax.
He disclosed that government, acting through the Ministry of Works and Housing, has submitted to Parliament for consideration and passage of a Rent Bill, to replace the existing Rent Act 1963 (Act 220), which was passed 59 years ago.
He said, “Its relevance has been outlived by the current population growth, urbanisation, and housing availability, among others.”
This, he said, is a significant stride as far as the housing sector and rent management of the country is concerned.
In his address, the Minister for Works and Housing Francis Asenso-Boakye stated that rental accommodation constitute a significant share of shelter services in the country, especially in urban areas, catering for 34.6% of households, while owner-occupied housing, accounts for 48.4% of shelter services in the country.
According to him, unfortunately governments’ previous housing policies and programmes have often focused on promoting home ownership, thereby neglecting the fact that rental housing is a key component of a well-functioning housing market.
“In view of the importance of shelter for humanity, the urgent need to provide support for lower income households and the youth to access the minimum standard of decent accommodation cannot be over-emphasised.”
“Currently, there is no mechanism by which eligible households, including the youth, can be supported to access decent rental accommodation and to effectively protect them from undue exploitation,” he said.
Mr. Asenso-Boakye noted that for his reason it has become imperative to address the short-to-medium term market failures in the renter-segment of the housing market, where landlords demand two or more years rent advance, and also streamline the processes for accessing rental accommodation for lower income households, towards the improvement of the quality of rental accommodation in the country.
Government, he said, has committed GH¢30 million to implement the initial phase of the NRAS to cover the Greater Accra, Ashanti, Northern, Western, Eastern and Bono East Regions.
These six Regions, he said, were selected because data from the Rent Control Department indicate they have a high rate of rent advance related issues.
“The objective of government, however, is to operationalize the Scheme throughout the country.”
“Indeed, government recognises the fact that public programmes of this nature may come with its own operational challenges during implementation. This notwithstanding, it is our fervent hope that the experiences and lessons that would be drawn will help government make the Scheme better across the country,” he added.
