Stephen Malpezzi
Published: 1990
Total Pages: 146
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Over the past forty years, rent control has been a feature of housing in Ghana. This study focuses on the housing market in Kumasi, the second largest city in Ghana. The authors examine the characteristics of rent control in force there, and assess the costs and benefits of rent control, on landlords and tenants alike. These controls have been successful in ensuring that housing is very inexpensive for most households, in both absolute terms and in proportion of income devoted to rent. Because of these controls, landlords have been deprived of economic returns from their property. Therefore, they have tended to withdraw stock from renting to use for their own family members and to reduce maintenance. Rent control is not the only constraint on the housing market in Kumasi or in Ghana. This study also describes other supply side and regulatory constraints, including those affecting land, finance, and choice of building design and materials. A number of options for relaxation (decontrol) are studied with the aid of a simple present value model. Along with decontrol of new construction it is recommended that floating up and out of controls over a period of about 5 years, should be considered, along with policy changes to ensure ready supplies of land, finance, and building materials. Finally, building a political consensus behind decontrol is not independent of but is more important than the technical means chosen for decontrol or relaxation.