Collective Self-Help, Financial Inclusion, and the Commons: Searching for Solutions to Accra’s Housing Crisis

Abstract

Accra is experiencing a housing crisis caused by the failure of both the state and the market to provide affordable shelter for the city’s low-income population. The launch of a new National Housing Policy in 2015 indicated a growing interest on the part of policymakers to support an alternative approach to low-income housing pioneered by civil society that is based on the principles of collective self-help and financial inclusion. This article conceptualizes this approach as an attempt to incorporate previously excluded surplus populations into the circuits of capital by extending finance to low-income city dwellers. However, this approach diverges from more conventional market-based approaches by promoting collective forms of organization, tenure and resource management—or “commons.” To scale this approach up beyond isolated pilot projects and ensure that it is genuinely affordable to the poorest groups, it is argued that collective self-help must be accompanied by subsidies from the state.

Keywords:

• Ghana
• Accra
• housing crisis
• housing policy
• self-help housing
• finance
• commons

The twenty-first century urban housing crisis is a global crisis, by no means limited to cities such as London and New York (Madden & Marcuse, 2016). In the Global South, where the majority of urbanization will take place this century, it is thought that more than a billion people are living in poor-quality, overcrowded, and insecure housing (Satterthwaite, 2014). Accra, the capital city of Ghana, is experiencing a housing crisis characterized by a lack of affordable, decent, and secure shelter for its low-income inhabitants. Both state provision in the postindependence era and market delivery since 1990 have largely failed to produce housing that is affordable to the urban poor. Unaffordability is compounded by rising land values, the persistence of inappropriate colonial-era building regulations, a dependence on imported building materials, and a lack of access to finance for all but the wealthiest groups. Consequently, the vast majority of Accra’s residents must rely on informal housing built outside of formal regulatory and planning systems to meet their needs. Although some of this informal housing is high quality and built by relatively wealthy individuals, much of it is characterized by overcrowding and a lack of access to basic infrastructure and services. It is estimated that 45% of Accra’s population lives in this slum housing (Obeng-Odoom, 2013a). Prior to the launch of a new National Housing Policy (NHP) in 2015, this crisis had been compounded by the lack of a comprehensive housing policy, a situation that the former National Democratic Congress (NDC) government (2009–2017) itself characterized as a policy “vacuum” (Government of Ghana, 2015, p. 1).

Ghana’s 2015 NHP indicates a growing interest on the part of policymakers to support an alternative approach to low-income housing that is based on the principles of collective self-help and financial inclusion. Focusing on a cooperative housing project in the Ashaiman neighborhood of Greater Accra, this article explores how this approach was pioneered by a transnational civil-society organization working in partnership with the United Nations Human Settlement Program (UN-Habitat). This article conceptualizes this approach as a form of “market-oriented inclusive growth” (Roy, 2014, p. 139) that seeks to use finance as a means to incorporate surplus populations previously excluded from urban housing markets. Rather than seeking to include people on an individual basis, as previous market approaches have attempted, however, this approach seeks to incorporate them into financial markets on a collective basis by extending loans to organized groups of the urban poor (McFarlane, 2012; Mitlin, 2011). As such, this should be understood as an “alternative-additional” housing approach (Hodkinson, 2012, p. 426) that seeks to supplement mainstream market approaches through the promotion of common property resources (Caffentzis, 2010).

The promotion of self-help housing for low-income groups is not unprecedented, and critics have previously pointed to the failure of such approaches to scale up beyond isolated projects and to achieve affordability for the poorest groups (Burgess, 1977, 1978, 1985; Davis, 2006). This article argues that achieving scale and inclusion for collective self-help housing will be particularly challenging in twenty-first century Accra, a city experiencing soaring land values that are pricing the poor out of housing markets. As such, collective self-help and financial inclusion can only be a viable solution to Accra’s housing crisis if combined with state subsidies to lower the prohibitive cost of land and construction. Ghana’s 2015 NHP envisaged a key role for the state supporting collective self-help by facilitating access to land and finance for grassroots initiatives. After the December 2016 election victory of the New Patriotic Party (NPP), however, it remains to be seen whether Ghana’s new government will provide material support to enable this approach to be reproduced at the city scale and beyond.

This article draws on primary and secondary data collected and analyzed over the period 2010 to 2017. Forty-eight interviews were conducted in Accra between October 2010 and July 2011 with a range of key urban development actors, including government ministers, civil servants, planners, local authority officers, nongovernmental organization (NGO) staff, and activists. The names of all respondents have been changed to ensure their anonymity. The author conducted participant observation of the lived experience of Accra’s housing crisis by staying with low-income households in a compound house with no toilet or running water in the inner city neighborhood of La. In addition, documentary analysis was conducted of the NHP, government survey and census reports, and materials produced by nonstate actors such as UN-Habitat and Shack/Slum Dwellers International (SDI). The article begins by contextualizing Accra’s housing crisis and the failure of housing policy to address the needs of the urban poor. It then introduces Ghana’s 2015 NHP with its focus on collective self-help and financial inclusion as means to address the previous failure of state and market provision. Next, the article discusses the civil-society initiative that piloted this approach in Accra. The final part of the article engages with ongoing debates about self-help housing and slum upgrading in the Global South to explore to what extent this approach offers the potential to provide urban housing on a large scale that is genuinely affordable to the lowest income groups.

Accra’s Housing Crisis

Accra, Ghana’s capital, is a historic port city with a population of 1,848,614 (Yeboah, Codjoe, & Maingi, 2013). Accra developed from a series of small villages and European forts into a major urban center after its selection as the administrative capital of the British Gold Coast colony in 1877. Prior to colonialism, housing was built by the family or village unit to meet their own needs and most people lived in large family compound houses built on communal land. As such, there was no real private market for the buying and selling of land or housing. For most of the colonial period, the British did not directly involve themselves in the provision of housing for Accra’s indigenous population. Apart from a few isolated exceptions, housing policy was limited to the provision of high-quality housing for public servants and expatriate employees of European companies. This housing was built in well-ordered and sanitary residential areas that were strictly segregated from those of the local population. As such, a system of social stratification and spatial segregation rooted in dramatic housing inequalities began to emerge in the nineteenth century as a feature of colonial urban development (Grant, 2009; Konadu-Agyemang, 2001; Tipple & Korboe, 1998; UN-Habitat, 2010).

After independence from British Colonial rule in 1957 and the creation of Ghana, successive national governments understood housing as a right and sought to take an active role in the direct provision of urban housing for the masses. State-owned enterprises such as the State Housing Corporation (SHC) and Tema Development Corporation (TDC; established in 1955 and 1952, respectively) were tasked with building housing for rent and for sale, and large amounts of urban land were expropriated from the local communities of the indigenous Ga ethic group for this purpose. In addition, from 1974 the Social Security and National Insurance Trust (SSNIT), the government-owned body responsible for social security payments, engaged in building rental housing for public servants. However, state-owned enterprises failed to meet targets and direct state provision had a limited impact on overall production. For example, of a national target of 4,000 units for the period 1967–1969, only 521 units were completed by the SHC (Tipple, 1987 in Konadu-Agyemang, 2001, p. 166). According to Tipple and Korboe (1998, p. 248), the SHC built as few as 24,000 units between 1957 and 1990. This supply-side failure has been explained by Konadu-Agyemang (2001) as resulting from a combination of factors: the high construction costs of public housing units because of their high standards; the poor performance of public housing agencies who were plagued by inefficiency and corruption and struggled to collect rents; and Ghana’s economic decline over the 1970s and 1980s that resulted in dwindling public funding for housing. In addition, state-built housing was largely unaffordable for the lowest income urban residents and was captured by wealthier groups instead (Konadu-Agyemang, 2001). As such, the majority of city dwellers relied on either self-built or informal private rental housing to meet their needs. As Accra’s population grew in the postindependence period, this resulted in a housing crisis characterized by “overcrowding, unaffordable housing prices, poor physical housing conditions and poor sanitation services” (Arku, 2009, p. 263).

Against this background of the failure of state provision to meet the needs of Accra’s inhabitants, the 1990s saw the government adopt a new market-led policy approach. Rather than a national response to a national problem, it is important to recognize the influential role played during the 1980s and 1990s by international organizations such as the UN and World Bank in advocating the withdrawal of states from the direct provision of housing. Instead, governments were to play the more limited role of enabling the private sector (Gruffydd Jones, 2012b). According to Tipple and Korboe (1998, p. 246), the Ghanaian government adopted these policies “without altering them for local circumstances.” This policy shift was initiated by the Urban II Housing Sector Reforms program implemented in 1990 as part of the structural adjustment program prescribed by the Interntional Monetary Fund (IMF) and World Bank (Sarfoh, 2010). Under these reforms, subsidies were withdrawn from state-owned enterprises and state spending on housing was cut to 1–2% of the government’s budget (from 10–12% in the 1950s). As a result, state-owned enterprises were compelled to operate as commercial entities (Arku, 2009). Public rental housing was privatized, and the SHC sold off over 90% of its housing stock (UN-Habitat, 2011). Incentives, including a five-year tax holiday and exemption from stamp duty, were offered to international real estate developers to encourage foreign investment in housing (Arku, 2009). In addition, the Home Finance Company (HFC) was established in 1990 to provide private mortgage finance to Ghanaians, and a process of land administration reform was initiated with a view to encouraging investment by ensuring security of land tenure (Obeng-Odoom, 2013b). The impact of these market-based reforms has been marked, and Ghana has experienced a significant growth in both housing production by commercial developers and foreign direct investment in the housing sector since 1990 (Arku, 2009; Grant, 2009).

Despite this clear policy shift toward a market-based approach, between 1990 and 2015 Ghana lacked a national policy framework to guide and steer the activities of public and private actors in the housing sector. Policy documents were drafted in 1986 and 1992, but were never formally adopted (Government of Ghana, 2015; UN-Habitat, 2011). In this situation, which the former NDC government (2015, p. 1) characterized as a policy “vacuum,” there has been a lack of government initiatives to meet the housing needs of low-income groups (UN-Habitat, 2011). As a result, the formal private sector has failed to provide housing for the majority of Accra’s inhabitants. Following a pattern repeated across the Global South (Mitlin, 2011), commercial developers have sought to maximize profits by focusing on the upper end of the market where the greatest profits can be made (Arku, 2009; Tipple & Korboe, 1998). This is evident in the proliferation of exclusive, high-security residential developments, or gated communities, that are marketed to Ghanaians earning money abroad and foreign expatriates whose number has grown in Accra following economic liberalization (Asiedu & Arku, 2009; Grant, 2009). Grant (2009, p. 62) refers to these as “transnational houses” because most buyers have lived abroad and their cost is dramatically out of sync with local incomes. UN-Habitat (2003) report that the house price-to-income ratio is 14:1, making Accra one of the most inequitable housing environments in Africa. According to Obeng-Odoom (2013a), two-bedroom houses in Accra cost between US$30,000 and US$60,000, whereas Ghana’s gross national income per capita was US$590 in 2009. In addition, access to housing finance is out of the reach of low-income Ghanaians. For example, the HFC will only lend to individuals with regular employment (Arku, 2009). This necessarily excludes the majority of Accra’s residents, 71% of whom are engaged in informal employment (UNDP, 2007). In addition, microfinance lenders who seek to reach those excluded from the formal financial sector have largely focused on lending for enterprises rather than housing (UN-Habitat, 2011). Paradoxically, therefore, the urban poor of Accra face “a huge scarcity of affordable houses in the midst of a real estate boom” (Grant, 2009, p. 64).

Unaffordability has been compounded by rising land prices, a reliance on imported building materials, and the persistence of inappropriate colonial planning regulations. Growing investment in real estate development has contributed to increasing land prices and land speculation, resulting in low-income groups being priced out (Arku, 2009). According to Yankson and Gough (2014), land prices in the Nungua area of Accra increased by around 650% between 1995 and 2005. Speculation is also encouraging the alienation of communal land by traditional authorities, such as chiefs and the heads of large families, or quarters, for their own personal gain (Aryeetey, Ayee, Ninsin, & Tsikata, 2007; Konadu-Agyemang, 2001). This process of commodification has resulted in the dispossession of the wider community and has contributed to the unavailability of land for housing for low-income groups (Owusu, 2008). In addition, disputes over landownership, which are commonplace in Accra, restrict the supply of land for housing development (Yankson & Gough, 2014). The survival of colonial-era building regulations has contributed to the high cost of housing built by the formal private sector because of insistence on mandatory minimum plot sizes and the proscription of indigenous building materials such as mud and bamboo in urban areas (Konadu-Agyemang, 2001). In addition, economic liberalization has contributed to the high cost of housing by increasing the flow of building materials into the country, encouraging dependence on expensive imported materials (Arku, 2009).

Because of the failure of commercial developers to build affordable housing for rent or sale, the majority of Accra’s inhabitants continue to rely on the informal private sector, characterized by housing built outside of formal regulatory and planning systems. According to UN-Habitat (2011), informal housing comprises about 90% of all housing in Ghana’s cities. Without access to finance, homeowners must rely on personal savings to build their own housing incrementally (Tipple & Korboe, 1998). Although informal housing is often associated with poverty in sub-Saharan Africa, some of this unplanned incremental housing is of high quality and built by relatively wealthy individuals (Yeboah, 2000). However, those who cannot afford homeownership (or who cannot live rent free in a family home) must rely on rental housing, the majority of which is informal (Yankson & Gough, 2014). Affordability for low-income groups remains an issue in the informal rental sector, with landlords commonly demanding several years of rent in advance (Konadu-Agyemang, 2001; Obeng-Odoom, 2013a).

Although some housing produced in the informal sector is high quality, a large proportion of Accra’s low-income population live in poor-quality housing characterized by overcrowding, poor access to services, and unsanitary conditions. Obeng-Odoom (2011, 2013a) estimates that about 45% of Ghana’s urban population lives in this slum housing, of whom the vast majority also work in the informal economy. Overcrowding is a big problem, with 53.6% of households in Accra occupying a single room, a mean number of 2.1 persons per room, and 75% of households sharing a dwelling with other households (Ghana Statistical Service, 2008). Because of a lack of state capacity and poor coordination between planning institutions, municipalities and the customary land sector, development has outpaced planning in Accra (Owusu, 2008, 2012). As such, the growth of informal neighborhoods has not been accompanied by the extension of water and sanitation services (Songsore, 2008, 2009). Only 46.7% of households have piped water, and only 33.2% have a flush toilet in their homes (Ghana Statistical Service, 2008). As such, many low-income households must rely on private water vendors and public sanitation facilities. In addition, over 80% of the population does not have access to home solid waste collection (Boadi & Kuitunen, 2005). This results in unauthorized dumping, contributing to poor environmental conditions in low-income neighborhoods (Owusu, 2010).

As a result of the deepening housing crisis, squatting has become increasingly commonplace in Accra since the 1990s (Grant, 2009; UN-Habitat, 2011). The largest and most famous squatter settlement in Accra is Old Fadama, located on state-owned land on the banks of the Korle Lagoon in the central neighborhood of Agbogbloshie. The settlement provides affordable, centrally located housing to approximately 80,000 people (2010 figures), most of whom are migrant workers from Ghana’s northern regions (People’s Dialogue on Human Settlements, 2010). Life in a squatter settlement is precarious; the city authorities have been threatening to evict Old Fadama since 2002 as part of their plans to decongest the central business district of unauthorized informal structures and trading activities. Decongestion has been justified as an entrepreneurial strategy to compete with other cities to attract tourism and investment by transforming Accra into a modern “Millennium City” (Gillespie, 2016a, p. 67). Through a combination of grassroots pressure and interventions from successive governments that feared the political costs of decongestion, the settlement has managed to avoid wholesale eviction to date (Gillespie, 2016b). However, a large-scale demolition exercise was carried out in 2015 following an episode of serious flooding in the city, making thousands of people homeless in the process. As such, the city authorities’ revanchist approach to dealing with informality has only served to heighten the housing insecurity of Accra’s low-income residents (Obeng-Odoom, 2011).

In sum, Accra is experiencing a housing crisis characterized by a lack of affordable, decent, and secure shelter for its low-income residents. Both the state and the formal private sector have failed to meet the needs of the majority of city dwellers, who must instead rely on the informal sector. Although some informal housing is good quality, much of it is characterized by overcrowding and a lack of basic services. In addition, those who resort to squatting to meet their shelter needs live under a constant threat of forced eviction. The informal sector has historically accounted for 80% of national housing output (Arku, 2009). Prior to 2015, however, there had been a lack of initiatives to support informal development. It is against this background that the former NDC government developed a new policy approach to better support grassroots housing production.

The 2015 National Housing Policy

In March 2015, the NDC government launched its new NHP (Government of Ghana, 2015). Formulation of the NHP began in 2005 and involved consultation activities with various local and international stakeholders. The NHP explicitly seeks to address the “vacuum” that has been created by the lack of a comprehensive housing policy (Government of Ghana, 2015, p. 1). The document contains a range of objectives, including increasing supply by creating an enabling environment for the private sector, encouraging investment in rental housing, maximizing land utilization, improving the existing housing stock, ensuring orderly settlement growth, making housing more accessible to the poor, involving communities and other nontraditional groups in low-income housing provision, and upgrading existing slums and preventing the emergence of new ones. It is beyond the scope of this article to review all of these objectives and the numerous initiatives that are proposed to achieve them. Rather, this discussion will focus on how the NHP specifically seeks to address the shortage of affordable housing for the low-income urban population.

The NHP estimates that 5.7 million extra rooms will be needed by 2020 to address the shortage of urban housing. Increasing supply by enabling greater private-sector participation in the housing sector and encouraging investment in rental housing is identified as a key measure to achieve this end. Rather than engaging in the direct provision of housing, the NHP frames the role of the state as creating an enabling environment through a range of initiatives, including facilitating access to land for developers, engaging in public–private partnerships, and providing fiscal and monetary incentives for investors. To some extent, therefore, the NHP represents a continuation of the market-based policy approach that has characterized housing interventions in Ghana since the 1990s. However, a civil servant involved in the drafting of the NHP acknowledged in a research interview that the formal private sector has not met the needs of low-income groups excluded from access to finance:

The private sector has mainly concentrated on the upper income levels, because that is where the market is and that is where they can get their money. And also because Ghana hasn’t got a system like in the West where you have mortgage schemes that can cater for people who want to buy. And so it has always been “you have the money, we build for you.” So the private sector has mainly catered for the upper income. (Ebo, Officer, Ministry of Water Resources, Works & Housing)

The policy document itself recognizes that previous attempts to enable the formal private sector have failed to benefit low-income groups:

The set of incentives previously provided to Estate Developers did not adequately promote affordable or low-income housing. The Five (5) year blanket tax holiday granted new estate developers led to more upper income than lower income housing. (Government of Ghana, 2015, p. 36)

As such, the NHP acknowledges that conventional public and formal private-sector approaches have to date failed to address the housing needs of Ghana’s urban poor:

Conventional approaches to the delivery of housing in both the public and private sectors, have (had) limited impact in solving the housing deficit. Only a small proportion of houses delivered have filtered to the low-income population where the need is greatest. Even in instances where housing schemes were deliberately targeted at the urban poor, such schemes still remained out of their reach. (Government of Ghana, 2015, p. 2)

To remedy this past policy failure, the NHP pledges to “focus and target the provision of affordable and social housing” (Government of Ghana p. 36).

Several policy initiatives are recommended for making housing more affordable to those excluded by past policies. These include a scheme to provide rent advance guarantees for low-income renters who cannot afford cash deposits, and the promotion of low-cost local building materials such as bamboo and compressed earth. Significantly, the NHP also identifies an important role for community in low-income housing provision. Community is defined by the NHP as including:

groups of individuals living in close proximity to each other and/or other social groups, grassroots entrepreneurs or associations able to identify a need and come together to access project funds. The size of the community varies depending on the type of project intervention and includes people from all areas that make direct use of the project. (Government of Ghana, 2015, p. v)

It is envisaged that citizens will be encouraged to organize themselves into local cooperatives and associations so that they can take responsibility for accessing finance, implementing housing programs, and repaying loans. Both local and central government will be responsible for enabling this self-help development. Local authorities will facilitate access to “soft loans” and provide training so that individuals and households can develop their “managerial skills” (Government of Ghana, 2015, p. 23). The Ministry of Water Resources, Works and Housing will facilitate access to finance and land from the customary and state sectors. In addition, the NHP expects that “Traditional Authorities will commit to the social/affordable housing delivery agenda of Government by donating land appropriately” (Government of Ghana, 2015, p. 37).

The emphasis in the NHP on enabling community echoes recent civil-society experiments in alternative approaches to housing provision based on the principles of collective self-help and financial inclusion for low-income groups. As such, this policy shift indicates a growing interest among policymakers in the possibilities of scaling up these experiments as the basis for low-income housing provision nationwide. One such experiment is a housing cooperative established in the Ashaiman neighborhood of Greater Accra by the Ghanaian affiliate of a transnational civil-society organization. It is to this example that we now turn.

The Amui Dzor Housing Cooperative

Accra’s housing crisis is characterized by the failure of both the state and commercial developers to meet the shelter needs of the urban poor. According to Mitlin (2011), this story is commonplace in the cities of the Global South, prompting civil-society organizations to develop an alternative approach to shelter provision that seeks to enable collective self-help through providing access to finance. One of the key organizations that Mitlin identifies in this respect is SDI, a transnational network of community-based organizations and NGOs in 33 countries across Africa, Asia, and Latin America (sdinet.org/). SDI’s local affiliates draw on a standard range of activities, known as rituals, to address the development challenges faced by informal-settlement dwellers. Chief among these rituals is the participation of members in savings groups, with a particular emphasis on mobilizing women. These neighborhood-based groups are networked into national federations of the urban poor, which are supported by a local NGO affiliated to SDI. These federations are networked together through SDI, and regularly participate in international exchange visits to facilitate horizontal learning and the sharing of skills, experiences, and models. In addition to negotiating with city authorities and national governments to prevent forced evictions, federations mobilize their members to engage in self-help development projects. This typically entails participatory surveys to generate data on informal settlements and self-help upgrading projects that mobilize these data to improve housing and sanitation conditions within these settlements (d’Cruz & Satterthwaite, 2005).

SDI has established the Urban Poor Fund International (UPFI) to provide microfinance loans to local savings groups to fund small-scale settlement upgrading projects. The UPFI is used to channel money from international donors into national funds managed by federation leaders and staff from the support NGO, where it is combined with local savings and sometimes supplemented by contributions from the state. International donors that finance the UPFI include the UK Lottery Fund, the Sigrid Rausing Trust, and the Bill and Melinda Gates Foundation. Upgrading projects financed by the UPFI are run on a cost-recovery basis whereby savings groups generate revenue to repay the loans so that the funds can be recycled to other groups. Interest rates on these loans are set below commercial rates but are sufficient to cover inflation and administrative costs. The UPFI is designed to reach those traditionally excluded from housing finance by providing credit to collectives rather than individuals (Mitlin, 2008). Participation in savings groups gives members the skills and capacity to manage finance and demonstrates evidence of creditworthiness to institutions that would otherwise be reluctant to extend access to finance (d’Cruz & Satterthwaite, 2005).

SDI first established itself in Accra in 2003 after the city authority’s decision to forcibly evict the Old Fadama squatter settlement. Following the organizing model employed in other countries, SDI established a local affiliate NGO, named People’s Dialogue on Human Settlements (PD), to support the creation of the Ghana Homeless People’s Federation to organize the residents of Old Fadama into savings groups. Both organizations have engaged the authorities in an ongoing process of negotiation to seek an alternative to the forced eviction of the settlement (see Gillespie, 2016b). In the meantime, the Federation has expanded into the Ghana Federation of the Urban Poor (GHAFUP), a national network with savings groups in 22 cities and a total membership of over 18,000 (http://www.pdghana.org/). In Old Fadama, GHAFUP has accessed SDI’s UPFI to build a toilet block, a bathhouse, and a hostel for female market porters, or Kayayei. These facilitates are run by the Federation on cost-recovery lines, with a small fee being charged to members of the public who use them. The money collected goes to pay off the loan borrowed from the UPFI so that other savings groups can use the recycled funds for similar projects (interviews with Mensah and Nana from GHAFUP in Old Fadama).

SDI is also a partner in UN-Habitat’s Slum Upgrading Facility (SUF). The SUF is a program to establish commercially financed self-help housing projects by extending loans to collectives of informal-settlement dwellers in cities across the Global South. Since 2007, the SUF has established pilot projects in Indonesia, Sri Lanka, Tanzania, and Ghana, with a view to demonstrating the viability of the approach (Gruffydd Jones 2012a). The neighborhood of Ashaiman in Greater Accra was selected as the Ghanaian pilot project. GHAFUP savings group members in Ashaiman formed the Amui Dzor Housing Cooperative, and participated in an international exchange to learn about cooperative housing built by SDI affiliates in India. The SUF helped to negotiate a mortgage from a commercial bank and an additional loan was taken from the UPFI to finance construction of a three-story housing block containing 31 one- and two-bedroom apartments (see Figure 1). Federation members negotiated with the traditional authorities to acquire land and worked with professional architects in the design and construction of the building. To be eligible for one of the units, members had to use their savings to provide a deposit of 1,000 Ghana Cedi (GHC; US$610 at 2011 values). Tenants then pay rent, GHC75 ($46) a month for a single bedroom unit, to repay the UPFI loan and mortgage. The repayment period is 10 years, after which the cooperative will own the building. To achieve affordability, the cost of each single bedroom unit was reduced from GHC10,000 ($6,099) to GHC6,500 ($3,965) through a combination of subsidies. The Government of Ghana contributed approximately GHC30,000 ($18,298) to the construction costs. After participating in the exchange visit to India, the traditional authorities agreed to grant the land for the project at significantly below market value. In addition, the building features 15 commercial units and a public toilet on the ground floor, both of which generate income that goes toward paying off the debt. UN-Habitat and SDI hope that this pilot project will be a model that can be scaled up to provide affordable housing for the urban poor across the city (interviews, Adu and Kojo, GHAFUP members, Ashaiman and Kofi, PD officer; Dobson, 2012).

Figure 1. The Amui Dzor Housing Cooperative.

The housing approach piloted by the Amui Dzor Housing Cooperative is an example of what Ananya Roy (2014, p. 139) terms “market-oriented inclusive growth.” In her work on Delhi, Roy identifies a recent shift in urban policy away from slum clearance, and its accompanying processes of dispossession and displacement, toward an agenda that seeks to extend the benefits of economic growth to the urban poor. Key to this agenda is what she calls a “bottom billion capitalism” that involves the “stretching of market forces to include the world’s billion people living under conditions of extreme poverty” (Roy, 2014, p. 140). This is to be achieved in Delhi primarily through the establishment of private property rights that will enable informal settlements to be integrated into formal real estate markets, an approach influenced by Hernando de Soto’s (2000) controversial argument that property titling enables the entrepreneurial poor to lift themselves out of poverty by mobilizing their homes as capital. In the approach being piloted in Accra, however, it is finance that is identified as the basis for the inclusion of the urban poor. According to the United Nations Development Programme (UNDP) (2007), 71% of Accra’s population is employed in the informal economy. As such, they are part of the global surplus population that is excluded from regular formal wage labor (Denning, 2010; Li, 2009; Sanyal, 2007). In Accra, this surplus population has historically been unable to access housing finance, contributing, in turn, to their exclusion from formal housing markets (Arku, 2009; UN-Habitat, 2011). According to Mitlin (2008), SDI’s UPFI model seeks to turn this situation on its head by using finance as a means of inclusion, incorporating previously excluded groups into the circuits of capital. The aim is that “capital, so often a mechanism for exclusion, becomes a trigger for progressive social change” (Mitlin, 2008, p. 7).

In developing this alternative approach to low-income housing provision, Federation members and PD officers understand themselves as responding to the failure of government to address the housing crisis. According to Adu, a GHAFUP member from Ashaiman,

[the] government has failed a lot…. It is a duty of the government to provide housing. Or if not provide the housing, [it] must help people to acquire houses. So in that direction, I think government has failed to provide for the housing needs for this community.

Consequently, he argues, “people need to organize themselves to look for, to find solutions.” Kwame, who has supported the Federation at Ashaiman in his role at PD, argues that this alternative approach to low-income housing provision is a response to the lack of policy initiatives to meet the shelter needs of low-income groups:

My interest is in how do you meet the shelter needs of Ghanaians…there is no policy on that. We don’t have any document that tries to address where people will sleep, homelessness, child needs for housing…we don’t have that in this country.

As such, those involved in the Amui Dzor Housing Cooperative understand themselves to be taking action within a policy vacuum. Previous government housing interventions that focus on enabling the formal private sector have failed to address the shelter needs of low-income groups. Because of the failure of policymakers to address Accra’s housing crisis, therefore, civil-society actors have taken the initiative to develop an alternative approach to low-income housing provision that would enable collective self-help through providing access to finance. Until recently, there was a lack of government policy to support self-help housing development in Ghana (Arku, 2009). However, the launch of the new NHP in 2015 indicates a growing interest among policymakers in collective self-help and financial inclusion as the basis for housing provision for low-income groups. The final part of this article will explore the potential of this approach for addressing Accra’s housing crisis.

Collective Self-Help and Financial Inclusion: Challenges and Opportunities

Although the approach developed by GHAFUP and PD in partnership with UN-Habitat is a response to the housing crisis in twenty-first century Accra, the emphasis on self-help means that it must be situated within ongoing debates about housing for the poor that have their origins in 19th century Europe (see Hodkinson, 2012). In The Housing Question, Friedrich Engels (1872) famously criticized followers of the anarchist Proudhon who believed that the poor could be transformed into property owners by enabling them to purchase their houses from their landlords, using their rent as installments. Engels argued that the housing shortages that characterized the rapidly growing industrial cities of nineteenth century Europe could not be solved with reforms that promote alternative forms of housing within the capitalist system. Rather, he argued that the housing crisis could only be addressed through “the abolition of the capitalist mode of production” (Engels, 1872, p. 99). This tension between anarchist and Marxist approaches to housing resurfaced in the 1970s in relation to the deepening housing crisis facing many cities in the Global South. Inspired by the ingenuity of urban squatters in Latin America, John F.C. Turner (1976) critiqued large-scale bureaucratic state housing schemes as expensive, inefficient, and inappropriate. Instead, he championed self-help housing by the poor as being more cost effective and appropriate to people’s needs. Turner argued that the state should play a supporting role by providing low-income groups with access to the resources they need, such as land, materials, and finance. Turner’s influential arguments legitimized a shift in World Bank policy in the 1970s toward promoting self-help slum upgrading through sites and services schemes whereby the government provides land and infrastructure and people build their own houses (Davis, 2006; Gruffydd Jones, 2012a, 2012b; Hodkinson, 2012.

Responding to this shift in thinking and policy, which Davis (2006, p. 72) characterizes as an “amalgam of anarchism and neoliberalism,” Rod Burgess (1977, 1978, 1985) developed a critique of self-help housing from a Marxist perspective. Burgess argued that self-help approaches could not produce housing that was genuinely affordable to the lowest income groups on a large scale as they failed to address the structural cause of the housing crisis: the commodification of housing. Burgess was criticized by some for adopting a position that was overly deterministic and that dismissed the possibility of any policy intervention to make a positive difference to the housing conditions of the poor (Gilbert & Linden, 1987). However, his critique of self-help approaches has remained influential. Davis (2006) echoes both Engels and Burgess in his argument that expecting the poor to address their own housing needs is increasingly unrealistic in urban contexts characterized by rampant land commodification and speculation. In addition, contemporary policy approaches that emphasize self-help have been characterized by some as a form of neoliberal governmentality that seeks to facilitate commodification and cultivate an entrepreneurial subjectivity among informal settlement dwellers. For example, Jones (2012a) characterizes UN-Habitat’s promotion of slum upgrading as a strategy to promote the marketization and financialization of housing in informal settlements; whereas Di Muzio (2008, p. 317) argues that the discourse of self-help associated with slum upgrading and microfinance interventions has the effect of individualizing responsibility for welfare and “displacing any notion of entitlement and collective well-being.”

Contrary to these criticisms, however, Mitlin (2011) and McFarlane (2012) observe that SDI’s model of self-help diverges from mainstream market approaches by promoting collective forms of organization, resource management and tenure among the urban poor. These “collectivist practices…exceed the confines of entrepreneurialism” (McFarlane, 2012, p. 2796) and demonstrate an “ambivalence towards the market as the sole means of addressing shelter inadequacies” (Mitlin, 2011, p. 1228). This ambivalence toward the market was evident in interviews with those involved in the Amui Dzor project. One Federation member spoke of the necessity of savings and self-help in a market environment where housing is a commodity and “money is everything”:

We encourage members to save. Because it’s money that’s everything. And if you don’t have it, housing’s not for you! You have to save towards housing. (Kojo, GHAFUP member, Ashaiman)

However, Kwame, a PD officer, was critical of the mainstream market approach based on “enabling” the private sector and promoting individual homeownership:

What you see is that there are efforts by government to facilitate, what do they call it? An enabling environment for the private sector to provide housing for people. Government as an enabler. But it doesn’t gel, it isn’t right, because clearly there are certain groups, certain things that are so important that you don’t leave it to the private sector. OK, so if the only hope we have as a country is that the market forces would save the poor or the low-income, you are dreaming.

Members of the GHAFUP Amui Dzor Housing Cooperative in Ashaiman spoke about the need to organize themselves into a cooperative because government policies had failed to produce low-income housing for informal workers in their neighborhood. One member explained that Federation-built housing was important because people are excluded from the housing market on an individual basis:

To find [a] solution to slums in Ghana, there must be a federation. Because almost every person living in slums cannot afford to build his or her own house (Adu, GHAFUP member, Ashaiman).

As such, those involved in this approach understand it as an alternative to, rather than a straightforward extension of, the mainstream market model that has previously excluded low-income city dwellers. Although this approach ultimately seeks to integrate surplus populations into housing markets using the mechanism of finance, it seeks to do so on the level of the collective by promoting cooperative, rather than individual, property ownership.

Following Caffentzis (2010), this collectivism should be understood in the context of recent experiments in promoting common property resources as a means to address the failures of neoliberalism. According to Caffentzis, neoliberalism’s crisis of legitimacy since the 1990s has provoked transnational governance actors to search for a Plan B to mitigate the problems created by unfettered privatization. As a result, and breaking with doctrinaire neoliberals who advocate the privatization of resources, international institutions such as the World Bank are increasingly supportive of commons to the extent that they aid the functioning of markets. According to Hodkinson (2012, p. 426), housing approaches that provide an alternative to mainstream market provision fall into three categories: alternative-oppositional approaches that consciously seek to challenge the mainstream; alternative-substitute approaches that provide a replacement to the mainstream but in a nonoppositional way; and alternative-additional approaches that seek to supplement and co-exist with the mainstream. Drawing on this typology, collective self-help housing can be understood as alternative-additional in the sense that it seeks to supplement the mainstream market approach rather than replace or contest it.

To understand the potential of this alternative-additional approach to address unmet housing needs in Accra, it is necessary to address questions around the twin issues of inclusion and scale (Mitlin, 2011). Regarding the former, critics have argued that self-help upgrading projects have a tendency to exclude the poorest groups (Berner & Phillips, 2005; Burgess, 1985; Davis, 2006). According to Burgess (1985), state-assisted upgrading is more expensive than informal housing due to the need to acquire land with legal tenure, follow building regulations, and use industrial building materials. In addition, these projects typically require beneficiaries to contribute a cash deposit and make regular repayments, excluding the poorest who lack savings or a reliable income. Writing about a sanitation upgrading project in India, McFarlane (2012, 2805) warns that making the poor responsible for their own infrastructure provision “endorses a model of unequal geographical distribution” where only those proactive, disciplined communities who organize themselves into savings groups are given access to resources. Berner and Phillips (2005) warn that self-help approaches based on full cost recovery necessarily exclude the poorest groups and reinforce structural inequalities. As such, they argue that self-help approaches must be accompanied by the redistribution of resources by the state to make them affordable to the poorest of the poor:

Self-help approaches can and should be part of strategies to tackle exploitation and marginalization, but should be considered as complements, not as alternatives, to accessible public services and the redistribution of income and wealth. (Berner & Phillips, 2005, pp. 27–28)

Critics have also cast doubt on the ability of self-help approaches to achieve significant scale in a capitalist society. As long as housing remains a commodity and a source of profit for various factions of capital, Burgess (1978) argues, it will be impossible for the state to provide low-cost finance, materials, and land to enable the urban poor to build their own affordable housing. Consequently, state-assisted self help will be limited to “token schemes” and “isolated experiments in self-help building” (p. 1129). This assessment is echoed by Davis (2006) and Di Muzio (2008), who argue that the small-scale project-based approach of self-help upgrading has failed to make a significant impact on the housing crisis in the cities of the Global South.

Can the collective self-help approach piloted by the Amui Dzor Housing Cooperative be scaled up beyond isolated pilot projects and address the needs of the poorest of the poor? According to one Federation member, the Amui Dzor project is a “demonstration house” and the intention is to scale up by establishing more cooperative groups within Ashaiman “so that we will be able to upgrade the whole community” (Adu, GHAFUP member, Ashaiman). However, although UN-Habitat (2011, p. 110) researchers acknowledge that Amui Dzor is an “impressive project,” they suggest that the complexity of the financing “means that it is not replicable over many projects.” Questions are also raised by the emphasis on finance as a means of inclusion, and whether this is suitable for the poorest groups. In urban Ghana, a context where informal employment is the norm and many people lack a regular and reliable income, defaults on loans are highly likely (Obeng-Odoom, 2013a). For example, Obeng-Odoom’s (2009) study of an NGO-led self-help housing scheme in the Ashanti region revealed that 64% of beneficiaries were not keeping up with repayments. This raises questions about how a housing approach based on financial inclusion will protect low-income beneficiaries from repossession in the event of default.

It is also debatable whether the housing units built by the cooperative are genuinely affordable for the lowest income groups. According to UN-Habitat (2011), the poorest 35% of urban households in Ghana can only afford rents of GHC10 ($6 at 2011 values) per month. Although incomes may be higher in Accra, research suggests that households in Ashaiman can only afford housing costs of GHC24.85 ($15) per month (UN-Habitat, 2011). Given that the monthly rent of GHC75 ($46) for cooperative members is more than three times this amount, it is likely that similar projects will only produce genuinely affordable low-income housing if they are subsidized to a greater degree than this pilot project is. The Amui Dzor project relied on land being granted at a below-market rate by the traditional authorities. However, given that many traditional land custodians have taken advantage of the growing demand for urban land to enrich themselves, relying on the voluntary contributions of these actors raises doubts about scalability (Aryeetey et al., 2007; Konadu-Agyemang, 2001). As such, to achieve scale and inclusion, it is inevitable that the state will need to take the leading role in providing significant subsidies for self-help housing projects (Mitlin, 2011).

Supplying subsidized urban land on a large scale will be a particular challenge in a context of speculation and rising values. However, according to Kasanga and Kotey (2001), 40% of land in the Greater Accra area has already been compulsorily acquired by the colonial and postcolonial state, ostensibly in the public interest. In principle, public land is available to anyone who applies for a plot for residential development. In practice, however, the beneficiaries tend to be elites such as “senior civil servants, politicians, top army and police officers, contractors, business executives and the land administrators” (Kasanga & Kotey, 2001, p. 23). To address this injustice, the government should consider enabling collective self-help housing for low-income groups by granting public land to housing cooperatives at zero cost. In addition, the NHP contains an initiative to introduce “tax measures and other mechanisms to discourage speculation on residential land and the retention of vacant land in urban and semi-urban areas” (Government of Ghana, 2015, p. 19). As Obeng-Odoom (2013a) has argued, a tax on vacant urban land could have the positive effect of improving affordability, encouraging the development of vacant plots, and generating revenue that could be used by the state to redistribute wealth from rich to poor by building social housing. As such, this redistributive policy would be a welcome initiative that could address one of the key root causes of housing unaffordability in Accra.

Conclusion

This article has explored how, in the context of Accra’s housing crisis, civil-society actors have pioneered alternative approaches to low-income shelter provision that have subsequently been incorporated into national housing policy. Because of the historical failure of both state and market to provide affordable, decent, and secure shelter for Accra’s low-income population, SDI’s Ghanaian affiliate (with the support of UN-Habitat) has piloted a housing approach based on the principles of collective self-help and financial inclusion for the urban poor. It is argued that this approach can be understood as an example of what Roy (2014, p. 139) terms “market oriented inclusive growth” in that it seeks to incorporate previously excluded surplus populations into the circuits of capital by extending finance to low-income city dwellers. However, this approach deliberately diverges from more conventional market-based approaches in its promotion of collective forms of organization, tenure, and resource management (McFarlane, 2012; Mitlin, 2011). As such, it can be characterized as an “alternative-additional” housing approach (Hodkinson, 2012, p. 426) that seeks to promote common property resources to supplement, rather than challenge, the functioning of markets (Caffentzis, 2010).

To scale this approach up beyond isolated pilot projects and ensure that it is genuinely affordable to the poorest groups, this article argues that collective self-help must be accompanied by subsidies from the state. This is particularly important in an urban context where the poor are increasingly priced out of land markets by speculative activities. As Berner and Phillips (2005, p. 20) argue, without this redistribute element there is a danger that that responsibilizing the poor to house themselves will be nothing more than a “neo-liberal wolf dressed up as a populist sheep.” Ghana’s 2015 National Housing Policy indicates that policymakers have now recognized that the market-based approach pursued since the 1990s has failed to meet the needs of the low-income population. The policy’s emphasis on community involvement in low-income housing provision also demonstrates an interest in supporting collective self-help by working with traditional land custodians to provide access to land and finance for affordable housing development.

After the December 2016 elections it remains to be seen whether this policy initiative will be adopted by the new government and whether the state will be able to coordinate the supply of subsidized land and affordable finance required if collective self-help housing is to achieve scale and affordability. It is worth noting that there is a history of policy frameworks failing to be implemented in Ghana’s cities. In 2012 a National Urban Policy Framework was launched to regulate the growth of urban settlements. However, this framework has yet to be implemented (Cobbinah & Darkwah, 2016). In addition, Ghana is burdened with servicing large debts in a context of declining revenues from commodity exports, leading the former NDC government to sign up to a new round of IMF-imposed conditionalities (Jones, 2016). It is possible that this new debt crisis will constrain the ability of the state to subsidize affordable housing on a large scale. Because of these uncertainties, therefore, there is a need for future research to determine the impact of collective self-help on the urban housing crisis in Accra and beyond.

Disclosure Statement

No potential conflict of interest was reported by the author.

Notes on Contributor

Tom Gillespie is a lecturer in the Global Development Institute, University of Manchester, Manchester, UK.

Acknowledgments

I wish to thank Stuart Hodkinson and the three anonymous reviewers for their comments on earlier versions of this article.