Housing is undoubted more
than one third of global wealth. All over the world, meeting the need for
housing in adequate terms especially for low and middle-income households have
been difficult due to the high cost of housing. In essence, the prices of the
houses in the market are beyond the affordability levels of about 90% of
households in Ghana, which translates into a housing deficit of about 1.6 million
units for a population of about 25 million. The term affordability can be
construed in two ways; first in terms of households’ ability to purchase
outright with cash from savings and secondly, in terms of being able to service
mortgage repayments if such housing finance facility is available. Affordability
is mainly a demand-side factor linked to the level of income, which stems the
housing financing debate.
This article only discusses
the supply-side to housing provision and its possible linkages to colonial
legacies. It is widely debated that the colonial history of most developing
economies and the adoption of colonial legacies by these countries have had a
devastating effect on how far they have reached on the development lather;
thus, the concept of colonial extractions and path dependence respectively. So,
we trace the colonial legacies of building standards and rent controls in Ghana
and attempt to find meaning and linkages with the current high cost of housing
in Ghana.
All cities need building standards: London has had them since the early Middle-Ages (1216), when
thatched roofs were banned due to the hazard of fire[1]. The link between building
standards, housing costs and housing affordability is quite simple. High
building standards all things equal are expected to increase the cost of
housing, which reduces affordability. In 1947, Britain suddenly and
substantially raised its housing standards (the Parker-Morris standards) after
the Second World War during the rebuilding process of the country as part of a
much larger social reform programme introduced by the British government of
1945-50. These standards were implemented through the Town and Country Planning
Act. This was during the “Golden Decades” of growth in Europe which experienced
substantial increases in household incomes. In other words, housing
affordability increased all things equal, since the rise in income suggested
that most people could afford better housing than they had at a premium. Despite
the income rise, these new standards were arguably too high as argued.
Subsequently, these new
building standards were implemented in the British colonies at a time when the
average income in Ghana was about one-twentieth (1/20) of Britain’s. This will
undoubtedly increase the cost of housing especially in the urban areas, since
the old “atakwame”- mud and thatch buildings were forbidden as the case was in
London. Homebuilders were to use sandcrete and concrete blocks which had better
resistance to fire and were more durable. The trade-off between using these new
materials (in the wake of shortages) and the cost of housing was a compromise
on affordability. It wasn’t obvious in the urban centres at the time because
these areas were small and mainly occupied by the elite, who had incomes
equable to their British counterparts and/or lived in houses provided by the
colonial government. In essence, these elites may not have paid out of pocket
to enjoy these new houses and hence, didn’t anticipate the impact on the cost
of housing of implementing the British Town and Country Planning Act of 1947 in
Ghana.
It would be erroneous to
suggest that these building standards were forcefully handed over to us by the
colonial government upon Independence. This is because, our leaders had the
option to accept or reject. Options actually give us the right but not the
obligation to enforce these standards, which were perhaps inappropriate for the
low level of incomes in Ghana. Adam Smith’s classical invincible hands that
worked against cutting our cloth according to our size was the fact that it
would have been an act of extraordinary courage and insight for newly installed
governments to lower building standards to suit income levels at the
time. According to Collier and Venables (2013), “the new African political elite wanted to join modernity not to dilute
it. And so Africa was stuck with building regulations which, had they applied
to 19th century London, would most probably have frustrated formal housing for
ordinary households”. In fact, they were too ambitious for Ghanaian
household incomes and in my candid opinion remains so today.
Regulations cover building
standards, such as wall thickness, room size, and depth of foundations, and
also the minimum size of plot. Now, we have to build largely with foreign
materials mainly because our industries cannot efficiently produce them
locally. Given the ever macroeconomic instability, underpinned by the cedi’s
depreciation in Ghana since the days of Adam, not Adam Smith, the cost of these
materials keep increasing although income growth is as sluggish as a snail.
Implied from the renowned economist Thomas Malthus, the economic progression of
housing cost outpaces the arithmetic increases in income; thus, the reduction
in housing affordability and increasing housing deficits in Ghana. So, we have
gotten to where we are today because of decisions we made in the past (path
dependence) and this limits the opportunities available to us today. Can the
elites in government today opt to reduce building standards when such a
decision in the minds of many could indicate “backwardness” instead of progress
in this times of materialism?
The typical evidence of the
impact of these standards in Ghana is our desire to build big houses on large
tracts of land, which are expensive and unaffordable. Has it ever occurred to
you the origins of these desires, which are typically not indigenous to Ghanaian
rural folks? Deductively, most of these were inherited from the British
building standards as determined by the Town and Country Planning Act of 1947;
contained and shared by the colonial elites who worked for the British
government. But shouldn’t we also abandon such desires even now that our
teachers have long abandon such desires and adherence to such draconian
building practices? In fact, the British along the line reduced those building
standards in the UK because of this same housing affordability problems they
perpetuated. In effect, these building standards have beyond the economic
impacts, given us an insatiable social lifestyle which is only sustainable in
luxury. However, housing is first and foremost a necessity, not an ostentatious
good (Luxury). Can we choose to meet necessity rather than luxury and social
status? Maybe not.
Since the adoption of
capitalist principles, which required a total shift from government provision
of housing to market provision, where governments are expected to play the role
of facilitators and enablers, housing affordability has even become more of a
problem than HIV/AIDS in Ghana. Going forward, we need to delink the connection
between the luxury type of building materials we use and building styles we
design as well as the building standards that specify and enforce them.
Perhaps, utilizing the vertical space in the form of flats, terrace buildings
and condominiums may be well suited as a cost-cutting tool; but this requires a
lot of research and social engineering.
The direct impact of high
cost of building materials resulting from these high building standards could
be mitigated by finding or developing building materials whose prices do not
correlate with foreign exchange fluctuations. And this reminds me of the many
research works conducted by the College of Architecture and Planning of the
KNUST that lie on dusty shelves unused. During an exhibition two years ago in the same
institution, laterite blocks were developed but up to now has had little to no
impact in the market. By this approaches, we would be able to reduce the compounding
impact of an unstable macroeconomy on the cost of building materials, labour
cost and the ultimate housing cost. Further, reducing our room sizes and plot
sizes by reforming our Building Codes and Standards could be cost-cutting,
which will lever affordability. After all, we still enjoy the small rooms in
the UK; don’t we? Some may typically qualify as store rooms as per Ghanaian
standards.
However, I am not suggesting
this on the back of weak research and no evidence-based. I rather believe that
the starting point is to commission a comprehensive research on the impact of
Building standards on housing cost and affordability in Ghana. Such evidence
would be instructive on where the latitude lies for reducing some of the luxury
building standards to attune to “necessary” standards. In summary, our colonial
legacies and extractions might have influenced housing cost and affordability;
perhaps negatively and continues to do so today – path dependence.
Kenneth
Donkor-Hyiaman
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