Towards a well-informed rental housing policy in Ghana: differentiating between critics and non-critics of the rent advance system

Abstract

Purpose In Ghana, the practice of landlords demanding that renters pay rent advance (RA) of between six months and five years is well noted. Surprisingly, renters appear divided into the benefits and drawbacks of the rent advance payment. Ahead of the 2020 general elections, the two leading political parties in Ghana promised to establish a rent assistance scheme to help renters working in the formal and informal sectors and earning regular incomes to pay their RA. This paper aims to scrutinize the differences in the demographic, employment and housing characteristics between the critics and non-critics of the RA payment in Ghana and the factors that predict the likelihood of being a critic of the RA system. Design/methodology/approach The study is exploratory and draws empirical data from surveys administered to 327 graduate renters from 13 regions in Ghana. It uses non-parametric and parametric tests, namely, Chi-square goodness-of-fit and T-test to explore these differences between both critics and non-critics of the RA. Findings There are statistically significant differences between critics and non-critics in terms of the association between their educational attainment on the one hand and their marital status, employment status and employment sector on the other hand. The research also reveals that monthly expenditures, number of bedrooms and RA period significantly predict the likelihood of being a critic of the RA payment or otherwise. Practical implications The study provides evidence which policymakers can draw upon to inform housing policy. Originality/value The study is the first to study the housing characteristics of graduate renters and to quantitatively distinguish between critics and non-critics of RA payment in Ghana.

Urbanization, Legacies of Elite Capture, and Multi-Dimensional Exclusions in Ghana: Towards Just Housing and Neighborhood Policies in African Cities

“…Income levels in Ghana are low. Minimum wage sits just a little over $1 an hour (see Bloomberg Tax, 2021) and with most of the population trapped in insecure lowincome informal jobs (Awaworyi and Danquah 2020;Ehwi et al, 2021;Morrison et al, 2021), the number of minimum wage earners is relatively small. Even those with higher educational attainments, including graduates, face financial hardships evidenced by the incessant demonstrations, strikes and other industrial actions for better working conditions in the country (Asante et al, 2021).…”

“…Perching is different from squatting which relates living on a property to which one has no title/right/lease/permission. reviews suggest, however, that the Scheme risks just legitimizing the illegal lumpsum payment practice without actually addressing the crisis (Ehwi et al, 2021;Morrison et al, 2021).…”

Unpacking the Structure and Functioning of the Urban Rental Housing Market in Kumasi, Ghana

“…The rental housing market is dominated by informal sector operators (Arku et al, 2012), who acquire their own land and engage the services of tradesmen to build incrementally, based on resource availability (Amoako & Frimpong Boamah, 2015). The rental sector provides housing units for all income categories of households and accounts for approximately 90% of housing stock in urban Ghana (Ehwi et al, 2021). The dominance of the sector makes it central to housing research, policy and development.…”

“…As a result of increasing demands coupled with limited supply, the pricing of rental housing is le at the mercy of suppliers leading to the exploita on prospec ve renters . Inherently this has led to limited compe on in the supply of urban rental housing units whereby the informal private rental en ty charges exorbitant rents (Gavu et al 2019) and Advance Rent (AR) (Ehwi et al, 2021). On the demand side, urban dwellers are faced with challenges of limited informa on and restricted choices of decent and affordable units (Adu-Gyamfi et al, 2020).…”

“…Majority of urban dwellers reside in deteriorated, overcrowded structures and may o en experience limited access to basic ameni es such as sanita on, water and waste disposal systems (Appeaning-Addo, -2016; Obeng-Odoom & Amedzro, -2011) at a rela vely higher cost (Luginaah et al, 2010). Ehwi et al (2021) observe that, most housing units are also rented with limited furnishing; necessita ng renters to assume the cost of furnishing. Compounding the affairs is that urban dwellers have to pay their rents in advance contrary to Ghana's Rent Act, 1963 (Act 220).…”