Gov’t invests GHc30m in National Rental Assistance Scheme; to streamline the rental sub-sector
Government has committed Ghc30m for the takeoff of the National Rental Assistance Scheme (NRAS) that is expected to provide eligible Ghanaians with a mechanism to pay low monthly rent has been launched in Accra. The new scheme will effectively remove the need for rent advance payment, which has been an albatross on low-income earners.
Launching the event, the Vice President, Dr. Mahamudu Bawumia said, in partnership with the private sector, the Scheme will provide low-interest loans to eligible Ghanaians to enable them to pay rent in advance. These loans will be repaid on a monthly basis to match the tenor of the rent and will be supported by a bank guarantee to ensure sustainability.
The Scheme’s implementation will initially commence in six (6) regions: Greater Accra, Ashanti, Western, Eastern, Northern and Bono East Regions. The regions were selected because data from rent control indicate that they have a higher rate of rent advance issues.
The Scheme will target individuals in the formal and informal sectors with identifiable and regular income. The rent advance loans will be paid directly into landlords’ bank accounts, who would also have to register with the Scheme.
The Minister of Works and Housing, Francis Asenso-Boakye announced that government has committed GHc30m as a seed capital to roll out the scheme, adding that the plan is to operationalize it throughout the country.
Further, he stated that the new scheme will help rental accommodation which constitutes a significant share of shelter services in the country especially in the urban areas, catering for about 34/35percent of households whiles owner occupied housing account for 48percent of shelter services in the country.
According to him, previous housing policies and programmes have often focused on promoting home ownership, neglecting the fact that rental housing is a key component of a well-functioning housing market.
The Secretary General of the Trade Union Congress (TUC), Dr. Anthony Yaw Baah urged the scheme to consider single mothers as well as extending it to the other regions to make it sustainable.
The General Secretary of National Tenants Union, Frederick Opoku urged the government institute a taskforce to monitor, enforce and sustain the scheme.
Residential renting in Ghana has been on an increasing trend for the past two decades. This is as a result of the high demand for affordable rental properties. The problem is compounded by an uncompromising demand of landlords to collect a year or two years of prepaid rent from potential tenants.
Research has shown that only 5percent of Ghana’s population can acquire their own homes without any form of assistance, with 60percent requiring support that is facilitated by the state to access housing whilst 35percent will require additional direct support before they can have access to housing.
Potential applicants would be required to be a Ghanaian, possess a valid Ghana Card, must be an adult of eighteen years and above, verifiable employment and earned income, must have a verifiable bank statement or mobile money statement, rent payable must not exceed 30percent of the house hold income
In a bid to resolve the challenge, 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).
The current Act was passed by Parliament fifty-nine (59) years ago, and therefore, its relevance has been outlived by the current population growth, urbanization, and housing availability, among others.
Additionally, to enhance the service delivery standards of the Rent Control Department, processes have begun in earnest, and a service provider has been engaged to digitalize the work of the Department across the country.
Digitalization will provide a consolidated platform for the operations of the Rent Control Department while at the same time improving revenue generation and collection for the country.
