With the looming housing deficit, this article attempts to explain Real Estate, Social Housing and Affordable Housing to ignite a debate on how we resolve the housing problem. It offers a brief explanation of the three topics to get readers share their views on housing.
Real Estate is defined in different ways because it covers a broad spectrum of issues. One writer defines real estate as an immobile and physically tangible product or an intangible ownership rights to the tangible product that could be either real or personal property. As a financial asset it is defined either as a debt or equity or a combination of both.
From the perspective of residential living and based on its use, real estate can be divided into three broad categories: residential, commercial and industrial. For example, residential real estate include houses, block of flats, bungalows, undeveloped land, whereas commercial real estate includes office buildings, warehouses, shopping malls, retail supermarkets, cinema halls etc and industrial real estate include factories, mines and farms. In other words, real estate ranges from a simple structure to the complex skyscraper or intelligent building.
Social Housing, however, is defined as housing offered by government agencies or non-profit organisations to those on low incomes or with particular needs. The UK Housing and Regeneration Act 2008 define social housing as low-cost rental and low-cost home-ownership accommodation.
In the UK social housing is provided by local authorities and non-profit organisations referred to as Housing Associations (or Registered Social Landlords). These organisations receive subsidy from central government to develop and manage the housing scheme for the intended customers. By their very nature these Social Landlords are heavily regulated in relation to rent levels, building standards and financial stability than private sector housing.
Since Social Housing schemes are residential properties they are therefore also classified as real estates. In development terms, real estate is the process of adding economic value to the real estate enterprise through various stages of development. According to James Graaskamp the real estate development process involves three major groups— a consumer group, a production group, and a public infrastructure group. In that sense, the procurement of Social Housing schemes follows the same development process except that the residential real estate property is develop for a consumer group who can afford. Others argue that residential real estate properties are developed for the articulate and politically sophisticated society.
Another ambiguous term in the housing movement is “Affordable Housing.” The UK government defines affordable housing as: …”subsidised housing that meets the needs of those who cannot afford secure decent housing on the open market either to rent or buy.” However, historically the term affordable housing was used interchangeable with references to social housing. This is because affordable housing had an element of government subsidy and was offered at rent levels below market rates by non-profit organisations. With time things evolve and therefore in 2010 the UK Coalition Government introduced “Affordable Rent” as a new terminology within the Social Housing sector.
This allowed Housing Associations to offer tenancies at rents of up to 80% of market rent levels within the local area. In other words, the rents were to be at least 20% below local market rents (including service charges where applicable). This new housing policy also provided affordable routes to home ownership. The policy encouraged shared ownership, rent to buy, equity loans schemes and other low-cost homes. It can, therefore, be concluded that social and affordable housing are housing schemes aimed at providing housing to low-income earners or making housing affordable to those excluded from the commercial housing market.
For over 30 years the residential real estate development approach has been the main driving force behind housing supply in Ghana. The housing sector is therefore disorganised, fragmented and lack strategic direction with no agenda to reform it. Housing initiatives are used to showcase ruling government achievement rather than being part of a strategic plan aimed at tackling the housing deficit. Housing is conceived and micro-managed by Cabinet with no National Housing Strategic Agency overseeing the development.
This has resulted in too many uncompleted and uninhabited schemes stack in remote locations. The housing sector needs urgent attention and central Government cannot achieve its desired objective unless it focuses on addressing all issues affecting the Housing Value Chain which includes Land and Tenure, Finance and Mortgage, Design and Building, Construction, Building Materials, Infrastructural Services and Community Development.