Real Estate Agent Disapproves Of National Rental Assistance Scheme: "It Will Not Help Ghanaians"

• The government of Ghana has partnered with private entities to launch the National Rental Assistance Scheme that will allow Ghanaians to make monthly rent payments
• The CEO of a real estate agency in Ghana has voiced his disapproval of the government's recently launched rent programme
• Speaking exclusively with YEN.com.gh, the real estate expert outlined four reasons why he believes the rent program is not feasible

On Tuesday, 31st January 2023, Vice President Bawumia on behalf of the Ghanaian government formally launched the National Rental Assistance Scheme in order to address the nation's housing shortage. The initiative is to help solve Ghana's housing deficit which stands at about two million units partly because landlords in the country charge one or two years' rent advance as opposed to the maximum six months' advance rent stipulated in the country's rent laws.

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The rental scheme is to help any adult citizen of Ghana who works for a business or themselves to afford monthly rent payments rather than making a rent advance. The applicant pays a monthly contribution to the National Rental Assistance Scheme after the scheme pays the full rent to the prospective landlord.

Real estate agent disapproves of the National Rental Assistance Scheme

Raphael Odjerbio, the CEO of a real estate agency in Ghana called Rajo City Realty, spoke exclusively to YEN.com.gh to heavily criticise the scheme and outline some reasons he believes make the rent programme a non-starter.

He explained that the rent problem in Ghana has dragged on for far too long as a result of the government's failure to contribute its quota in the affordable housing sector. He added that the Rent Control department was not pulling its weight to force landlords to abide by the country's rent laws.

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The real estate expert went on to highlight four reasons why he believes the National Rental Assistance Scheme will not be efficient. YEN.com.gh mentions the reasons below.

The rent scheme will not benefit many in the informal sector

Raphael Odjerbio believes that the rent scheme should benefit all citizens, whether they are in the formal sector or not. The real estate expert stressed that it was rather unfortunate that some citizens in the informal sector earning below GH₵500/month may not be eligible to access a rent loan from the scheme.

He told YEN.com.gh that the majority of people looking to rent in Ghana are in the informal sector and can afford not more than GH₵500/month on accommodation. Thus, a huge chunk of such people, who may not be receiving a salary on a monthly basis may not qualify for the loan.

However, YEN.com.gh was not able to retrieve credible data that backs the agent's claims of people in the informal sector who rent accommodations up to GH₵500/month.

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The rent scheme contradicts itself

The second reason the property expert gave was that the National Rental Assistance Scheme contradicted itself. He told YEN.com.gh:

The scheme contradicts itself because the rent control law allows a tenant to pay 6 months' advance rent but the scheme will pay 1 year or 2 years' advance rent to the landlord on behalf of the tenant

Raphael stated that the government's programmes and policies should align with the rent law, and not rather embolden landlords to do the wrong thing. He stressed that the rent scheme does not solve the underlining issue of long rent periods. It rather makes it easier for landlords to receive their monies from tenants.

The rent scheme will create unemployment

The CEO of Rajo City Realty told YEN.com.gh that the National Rental Assistance Scheme would create unemployment for young graduates who are making income from rental properties by working as realtors or real estate agents.

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He believes that the rent scheme is trying to directly link tenants to landlords, thereby cutting off real estate agents who will go unemployed. He said:

The scheme's long term plan is that they are trying to get landlords to register directly without agents. This will make agents go out of business.

Raphael added that there will not be any more properties or tenants in circulation after renters get the apartments they are looking for. This is because renters will simply renew their tenancy with their landlords after their time is up since they would not have to pay a lump sum.

YEN.com.gh spoke with Nii Mantse, a landlord who owns an apartment complex in Haasto. He disagreed with Raphael by saying that there will always be real estate agents in the system because property owners rely on them to fill their vacant apartments. He explained:

I have a good working relationship with some agents. They know the kind of tenants I want in my house so I will prefer to continue working with them.

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The rent scheme undermines the role of real estate agents

According to the property guru, the rent scheme undermines the role of real estate agents and agencies who are key players in the real estate industry. He explained that well-established agencies that pay taxes also contribute to the government's revenue so the government must consider policies that are favourable to them.

However, YEN.com.gh's research suggests that the scheme will not interfere with the jobs of the agents. It states on the official website of the National Rental Assistance Scheme that it is the responsibility of the renter to search for their own apartments. This means that renters will still need the services of agents when property hunting and the government will not interfere with the jobs of agents.

Why landlords in Ghana charge 1 or 2 years' advance

In an earlier story, YEN.com.gh wrote about why landlords in Ghana charge a year or two's rent advance. Ghanaian landlords insist on longer lease terms, often requiring one or two years' payment upfront whereas other nations only pay a monthly fee. Although Ghanaians have complained about the expense of paying for one or two years' worth of rent, landlords are determined not to change their stance. Additionally, the government has not put rigorous laws into effect that would guarantee that the rental market is more favourable to Ghanaians.

Source: YEN.com.gh