By Mulengera Reporters
The much-anticipated Housing Baraza, a pioneering information-sharing forum organized by NBS TV, finally took place on Thursday at Serena Hotel where hundreds of stakeholders converged to make their voices heard.
NBS boss Kin Kariisa says desire to bring members of the public face to face with policy makers and other enablers like mortgage-giving financial institutions prompted them to start the Housing Baraza that will be held annually.
Kariisa said during the opening ceremony that sometimes landlords get angry with improper rental tax assessment by URA due to absence of accurate information. He said sometimes URA continues demanding rental tax in respect of houses that have taken long without tenants. “The NBS Housing Baraza is here to create dialogue between such house owners and URA so that there is shared understanding,” Kariisa explained.
Referring to Baraza major sponsors Housing Finance Bank (HFB), Kariisa said some desire to take out mortgages to graduate from renting to house owners but are often constrained by absence of information regarding which financial institution offers the best deal.
Kariisa, whose innovativeness the President saluted in a speech read for him by Deputy Premier Kirunda Kivejinja, was optimistic through such discussions the wedge between banks and the public, that accuses them of prohibitive interest rates on mortgage facilities, can be narrowed resulting into a win-win situation.
He said it’s important that the two parties are brought together for the Baraza to deepen understanding of each other. “The idea is to deepen understanding and that is why we assembled all these eminent experts to speak in the different panel discussions,” said Kariisa thanking KCCA, URA, NWSC, Knight Frank, HFB and other partners that made it possible for the inaugural Housing Baraza to be pulled off so glamorously.
It was indeed a well-attended event that was made livelier by Samson Kasumba whose well informed thought-provoking jokes kept guests smiling and laughing throughout. “The truth is Wavamunno changed TV in Uganda but Kin Kariisa permanently revolutionarized television,” is one of the many jokes Kasumba cracked at the conclusion of Kariisa’s opening speech.
BARYOMUNSI’S TIME
Besides the hundreds inside Victoria Hall, Housing Minister Chris Baryomunsi took advantage of the fact that millions more were watching the live broadcast on NBS TV to explain what government intends to do to address the glaring deficit for decent affordable housing in Uganda.
Referencing on a housing deficit of 2.5m houses (which keeps annually escalating due to rapid urbanization averaging at 5.4%), Baryomunsi said the NBS Housing Baraza couldn’t have come at a better time. Further statistics, as communicated in the documentary Kasumba played for guests, show that 60% of people in Kampala and surrounding towns live in rented houses and yet the housing scarcity annually escalates by 200,000 units.
Corroborating on what MD Micheal Mugabi (whose HFB controls 60% of the mortgage market) had said earlier, Baryomunsi said the annual Baraza was an opportunity for government to impress it on Ugandans that housing can be leveraged into one of the key growth drivers emulating Kenya and Rwanda where governments have prioritized it to be among the top 4 drivers of economic growth.
He agreed with Mugabi who had earlier on noted it’s imprudent for a government that has invested so much in infrastructure not to prioritize housing as a key growth driver. The Minister also agreed with earlier speakers that the private sector can’t do it alone meaning its high time government considers beginning to do more than just providing an enabling environment. The Public Private Partnerships must be harnessed so that government (whose role in the 1960s Baryomunsi had highlighted) once again becomes a strategic investor in housing since the privatization of NHCCL hadn’t made the situation better.
Referring to Akright boss Anatoli Kamugisha who was in the audience, Baryomunsi said government will be investing in provision of water, roads and electricity lines linking up to the upcoming residential neighborhoods in the areas surrounding Kampala. He said once government delivers on those, the final property prices (mostly plots) in those bu-estates would diminish by 30%.
Baryomunsi said government needs ideas generated at forums like the Housing Baraza as it comprehensively plans to mitigate the negative consequences resulting from Ugandan population being projected at 75m by 2040. He said by that time the housing scarcity will become so acute that only 2 in every 10 Kampalans will be living in houses they own.
Saying access to decent affordable housing is a basic need, Baryomunsi said there will be no winner in a Kampala were very few people own homes and houses. He said the big dilemma is that more and more people are increasingly becoming incapable of acquiring homes implying there is something wrong with the way banks are pricing mortgage facilities.
He said even in animal kingdom, a bird that can’t build its own nest will be shunned and struggle to get a female to mate with. He said the population growth rate currently averaging at 3.2% is something that must be discussed and mitigated because with every Ugandan woman being capable of producing five children during her reproductive, life there is no way the housing deficit will be addressed.
That the Uganda population doubles itself every 20 years is additional cause for worry, Baryomunsi noted. He expressed fear that as long as so many live under subsistence with no income to write home about, decent housing won’t become more affordable even if banks diminish mortgage prices.
He said the good news though is people living in grass thatched houses are diminishing in number saying his Kinkizi East no longer has anyone in grass thatched. He said planning for decent housing was being complicated because people upcountry prefer to live in scattered neighborhoods making it costly to provide amenities like water, electricity and roads. He said this is the reason government regrets allowing Acholis to leave IDP camps after the Kony war. Alternative would be leaving them there and providing decent human settlement for them, he said.
He said government has done a lot to facilitate citizens’ acquisition of decent housing including enacting the condominium law to increase on ownership of titled housing. He also referred to the recently enacted Landlord-Tennant Bill defensive of majority tenants against exploitation by landlords. He defended the prohibition against 3% increase of rent within 3 years saying this is the practice in Germany, UAE and elsewhere. He demanded evidence that charging in dollars betters the housing situation in Uganda and is the only way to attract private sector to invest in housing.
MORTGAGE RATES
Baryomunsi announced the Mortgage Liquidity Facility through which government would force down interest rates charged on mortgages by commercial banks. He said this fund would be managed in partnership with commercial banks and priority would be low-earning civil servants who often reach retirement without ever building a house.
They are copying this from Kenya and Tanzania where he said it has done well. The Minister said this fund will make it possible for civil servants to own houses in their 20s and 30s. He didn’t tell how soon implementation would come.
He said GoU would also use the tax regime to make housing more affordable by considering specific wavers for manufacturers of cement, steel and tiles. Gratefully the Kapeeka tiles manufacturer and the many cement factories now operating have already forced the prices down. Getting a glass manufacturing investor to do everything here locally was underway, he said.
Baryomunsi caused laughter when he said acquisition of housing would be expedited if all people acted like voters who he said will despise and not elect a politician who doesn’t show them his house. He said such pressure explains why many elected politicians own houses as a matter of priority before one thinks of standing.
CRUSHING BROKERS
Baryomunsi said the unscrupulous brokers, operating in a space that remains inadequately regulated, are partly responsible for distortion of real estate prices and cause frustration in the population by conniving to sell the same property to multiple buyers. He said government was fully aware of the extent to which these cause real estate prices to escalate and a law was being considered to regulate and bring them under control by fixing a maximum commission beyond which they can’t charge brokerage fees to parties involved in a land transaction. The new law will guide standards and uniformize prices for real estate and thereby make the market more predictable to those desiring to acquire their first home.
In his speech read for him by Kivejinja, Museveni commended NBS for the initiative and enumerated ways in which his NRM government has always been there for the low-income earners when it comes to property ownership rights.
He was grateful it’s those same people the NBS baraza seeks to emancipate by giving a platform through which they can denounce any injustices coming their way in the housing acquisition market.
Museveni also referenced on the NDP and said the fact that urbanization is at 5.4% and the need for housing annually increases by 200,000 units was a blessing in disguise because it simply means real estate is one area foreign investors should be attracted to co-develop Uganda with him.
Observing that decent housing is a credible indicator for improved living standards, Museveni said his government was ready to do more than just providing an enabling environment. This includes coming up with numerous interventions to force down the interest rate in the mortgage market while generally bringing down the cost of construction. (For comments, call, text or whatsapp us on 0703164755 or email us at mu7lengera2040@gmail.com).
