Housing Invesment Chronicles: the case of Côte d'ivoire

In Côte d’Ivoire, access to affordable housing is a major concern for the population as well as for the public authorities.

The housing deficit is estimated at more than 600 000, of which 200 000 are in Abidjan alone. This deficit is growing rapidly due to the combined effect of high population growth (2.6 percent per year) and low housing supply (current production provides only a few thousand homes per year on the market, while the estimated need is at least 25 000 homes per year for Abidjan and 25 000 homes per year for the interior of the country).

While this problem affects all social categories, it particularly affects the low-income households. Indeed, recent data compiled by the Centre for Affordable Housing Finance in Africa (CAHF, 2018) show that the costs of building the cheapest homes remain out of reach for a large part of the country’s population. This suggests that solving the problem of access to affordable housing would be difficult without the establishment of financing mechanisms adapted to the realities of low-income households.

It is in this context that the CAHF has launched a study to help design and implement housing finance solutions that consider the realities of low-income households.

The aim of the study was to establish the housing investment profile for low-income households in Côte d’ivoire:  The aim was to collect and analyse relevant data to understand how these households invest in their housing and the constraints they face throughout the process. The specific objectives are organized around the following five thematic axes:

• The socio-economic characteristics of low-income households;
• The occupancy status and housing characteristics;
• The decision and motivations for investing in housing;
• The process of investing in housing (acquisition and securing the land, construction, etc.);
• The funding used as well as the main barriers to accessing housing finance.

For this study, a survey was conducted in the district of Abidjan from 28 June to 27 July 2019, on a random sample of 602 households (Cocody and Plateau municipalities, which are known to be the home of high-income households) were excluded from the survey

Overall, the results suggest that low-income households in the District of Abidjan are predominantly renters (69 percent), and the majority of these tenants (67 percent) have housing investment plans.

However, analysis of the owner’s profile shows that in almost 7 out of 10 cases, access to the property was as a result of an inheritance. Very few low-income households actually invest in housing. And when they do, it’s mostly on equity; bank financing for the purchase or construction of housing is rather rare (4 percent).

Given the importance of home ownership to tenants, it is important to put in place measures that can facilitate investment in housing. The analysis of housing investment approaches, as presented in this report, suggests that, among other things, there should be:

• Strengthen the capacity of real estate developers to offer a more diverse range of housing and especially at more affordable prices. The majority of households who chose to build rather than buy a home did so for economic reasons (58%) or because they found it difficult to find a “home suited to their needs” on the market (23 percent).
• Strengthen the capacity of professional land developers to offer a diverse range of serviced and secure land at affordable prices. Failures in this area have led many households to turn to unserviceable, unsecured and sometimes non-compliant lots with existing urban planning plans.
• Simplify land security and building permit procedures. Most landowners have only provisional titles for their land or no title at all, and the majority of those who build do so without a building permit. This situation automatically makes them ineligible for the real estate loans offered by the local banks.
• Find effective solutions to improve quality and lower the cost of building materials on the market.
• Develop suitable housing finance products for households working in the informal sector. These households are most low-income households and are automatically ineligible for the real estate loans currently offered, since almost all banks make it a condition of access to these loans that applicants must be employed.

The full report is available in French.