Uganda: Will condominiums transform housing in Kampala?
A condominium, or condo, is the form of housing tenure and other real property where a specified part of a piece of real estate (usually of an apartment house) is individually owned, while use of and access to common facilities in the piece such as hallways, heating system, elevators, and exterior areas are executed under legal rights associated with the individual ownership and controlled by the association of owners that jointly represent ownership of the whole piece.
When Uganda passed the Condominium Property Act 2001, it was touted as the answer to the country’s deficit, the law laid out plans for the development of estates along Bugolobi, Buganda Road and Bukoto, the difference being that instead of renting, people would be able to buy the apartments on these flats and also where possible, they could build upwards instead of spreading out and taking more space. The country at the time had a housing deficit of one million units.
Twelve years later the deficit stands at 550,000. 160,000 of which are in Kampala and with an urban growth rate of 4.8 per cent, the 2010 housing census survey predicts that that two decades from now Uganda will have a housing shortage of nearly eight million units, of which 2.5 million will be in urban centers and one million in Kampala
The report also notes that the high urban growth rates, current urban housing deficit, high employment informality and very limited access to housing finance create an enormous challenge, making it hard for urban and state authorities to address the housing problem.
Condominiums have also sprang up in Luzira, Naalya, Namungona, Lubowa among other places. Under condominium property act of 2001, a real estate development company can build apartments and sell them as is and give the buyer a title deed for his property the same way you would sale a stand-alone house on a plot of land.
However condominiums are also not without their flaws and encumbrances. According to Paul Katamba, an urban developer, the limited space that comes with a condo is a disadvantage. Most Ugandans are accustomed to houses with compounds and the idea of owning a house whose only compound is a balcony is not exactly appealing.
“Assuming you were a broker, how would you market such a house to me” he asks. Katamba ,however, notes that the “type” of the people who buy condominiums usually build bigger houses upcountry where they can at least “stretch their legs” meaning they don’t leave permanently as is the case in Uganda currently where people sell everything in their villages and move to urban centres,
Condos may also not work for the average Ugandans because most of the developers are targeting rich Ugandans who can afford them which makes the idea of owning a condo very unlikely. The average cost of a three bedroom condominium apartment is Shs250 to Shs300m and if it is a mortgage, it will have to be paid in 10 years meaning whoever takes it out must be able to service it with at least Sh2m monthly putting condominiums beyond the reach of an average Ugandan.
The need for more affordable options
The option would be for some of these companies to undertake projects to develop low costs houses for low incomes earners as has been promised by Opec developments at the Nakawa housing estate.
This too, according to Katamba, may be hard to do, because, “How do we define low income? How low will these houses be priced? All those are questions that the developer must answer before promising low cost housing to people.”
The case of Ethiopia
In Addis Ababa, the Ethiopian government has rolled out three condominium housing projects where salary earners who are willing, get cheap houses and pay them off their salaries as a form of a loan, these projects are some of the ways through which the Ethiopian government hopes to solve its city’s housing problem. In Uganda, the National Social Security Fund has promised to roll out the same arrangement for its members.