Advance rent payment and its influence on access to housing by the urban poor

Abstract

Globally, rental housing is more flexible and affordable to the urban dwellers than homeownership. However, urbanites must make payments in advance to access rental housing in Ghana. This study explores the influence of advance rental payments on access to housing by the urban poor and its consequences on the creation of orderly human settlements. The study used a survey of 250 respondents (200 renters and 50 homeowners), and seven interviews to assess advance rental payments and their effects on the urban poor in Asawase, Ghana. Findings show that renters could afford housing if rents were paid monthly. Using the UN-Habitat’s recommended room occupancy rate of 2.5 persons and the current market rents in Kumasi, renters would have paid less than 30% of their monthly income on housing. However, homeowners demanded rent payments in advance, which priced out many of the urban poor from the housing market. This is because many renters were informal sector workers who could not accumulate the lump sum money needed for advance rent payments of approximately 2–5 years. As a result, some renters could not afford decent housing and were thus living in squalor, congested rooms, containers, and wooden shacks. The study recommends flexible rental housing payments to enable poor renters to pay for housing with less financial burden. It also proffers measures to control illegal sub-divisions in urban areas by moderating advance rent payments.