Towards a well-informed rental housing policy in Ghana: differentiating between critics and non-critics of the rent advance system

• DOI: https://doi.org/10.1108/IJHMA-12-2020-0146
• Published date: 02 April 2021
• Date: 02 April 2021
• Pages: 315-338
• Subject Matter: Property management & built environment,Real estate & property,Housing markets
• Author: Richmond Juvenile Ehwi,Lewis Abedi Asante,Emmanuel Kofi Gavu

Towards a well-informed rental

housing policy in Ghana:

dif‌ferentiating between critics

and non-critics of the rent

advance system

Richmond Juvenile Ehwi

Department of Land Economy, Cambridge Centre for Housing and Planning

Research, University of Cambridge, Cambridge, UK

Lewis Abedi Asante

Department of Estate Management, Faculty of Built and Natural Environment,

Kumasi Technical University, Kumasi, Ghana, and

Emmanuel Kofi Gavu

Department of Land Economy,

Kwame Nkrumah University of Science and Technology, Kumasi, Ghana

Abstract

Purpose –In Ghana, the practice of landlords demanding that renters pay rentadvance (RA) of between

sixmonths and f‌ive years is well noted. Surprisingly,renters appear divided into the benef‌its and drawbacks

of the rent advance payment. Ahead of the 2020 generalelections, the two leading political parties in Ghana

promised to establisha rent assistance scheme to help renters working in theformal and informal sectors and

earning regular incomes to pay theirRA. This paper aims to scrutinize the differences in the demographic,

employment and housingcharacteristics between the critics and non-critics of the RA payment in Ghana and

the factors thatpredict the likelihood of being a critic of the RA system.

Design/methodology/approach –The study is exploratory and draws empirical data from surveys

administered to 327 graduaterenters from 13 regions in Ghana. It uses non-parametric and parametrictests,

namely, Chi-squaregoodness-of-f‌it and T-test to explore these differences betweenboth critics and non-critics

of the RA.

Findings –There are statistically signif‌icant differences between critics and non-critics in terms of the

associationbetween their educational attainment on the one hand andtheir marital status, employment status

and employment sector on the other hand. The researchalso reveals that monthly expenditures, number of

bedroomsand RA period signif‌icantly predict the likelihood of being a critic of the RA payment or otherwise.

Practical implications –The study provides evidence which policymakers can draw upon to inform

housing policy.

Originality/value –The study is the f‌irst to study the housing characteristicsof graduate renters and to

quantitativelydistinguish between critics andnon-critics of RA payment in Ghana.

Keywords Ghana, Rental housing, Advance rent, Critics and non-critics

Paper type Research paper

The authors are grateful to everyone who participated in the study. Acknowledgment is due

Dr Hannah Holmes for proofreading the revised manuscript. We are also grateful to the four

anonymous reviewers for their helpful comments on the original manuscript.

Rental housing

policy

315

Received10 December 2020

Revised12 February 2021

Accepted15 February 2021

InternationalJournal of Housing

Marketsand Analysis

Vol.15 No. 2, 2022

pp. 315-338

© Emerald Publishing Limited

1753-8270

DOI 10.1108/IJHMA-12-2020-0146

The current issue and full text archive of this journal is available on Emerald Insight at:

https://www.emerald.com/insight/1753-8270.htm

1. Introduction

It is argued that renting as a housing tenure affords several benef‌its. It facilitates easy

mobility within labour markets (Ardayaf‌io-Schandorf, 2012), relieves the periodic f‌inancial

commitments that comewith homeownership such as paying for insurance, repair and other

forms of maintenance (Scanlon, 2015), allows young people to tailor their housing needs to

their limited budget (UN-HABITAT, 2003) and minimises or eliminates debt distress

associated with mortgage f‌inance (Brown et al., 2005). Despite these espoused benef‌its,

studies from both advanced and developing countries alike have discussed several

challenges associated with rental housing more generally. These include poor landlord-

tenant relations (Lister, 2005), underinvestment in housing quality (Scanlon and Kochan,

2011), unjustif‌iable evictions (McKee and Soaita, 2018), amongst others. However, there are

some challenges peculiar to different (sub)regions. For example in Sub-Saharan Africa

(SSA), rental housing is often characterised by arbitrary rent increment bylandlords (Adu-

Gyamf‌iet al.,2019), pre-mature evictions (Cadstedt, 2010), gender stereotyping(Asante and

Ehwi, 2020), poor housing quality (Ehwi et al.,2020;Scheba and Turok, 2020), intrusive

behaviours of landlordsand a lack of privacy (Obeng-odoom,2011a, 2011b).

One challenge that has recently begun to gain scholarly and political attention is the

practice of Rent Advance (hereafterRA). This is the practice where landlords require renters

to make an upfront lump-sum payment which is equivalent to between 6 months and 5

years’worth of rent. Evidence shows that the practice is gaining popularity in Ghana,

Nigeria, Tanzania, Angola and other countries (See for instance Africanews, 2018;

Andreasen et al.,2020;Cain, 2017;Olawande et al.,2012). Scholars identify different

rationales for this practice, which include prevalent housing shortages (Adu-Gyamf‌iet al.,

2019), hedging against inf‌lationary effects of local currencies (Asante and Ehwi, 2020),

carrying out extensions or transforming existing stock (Malpezzi et al.,1990) and as a

security measure against the possibility of renters’sudden loss of income. The payment of

the RA also obviates the obligation to make periodicrent payments during tenancy until the

tenancy ends and another leaseis renegotiated, then another RA must be paid, thus creating

a vicious cycle (Asante and Ehwi, 2020).

Scholars interested in the subject have explored a wide range of issues associated with

the RA payment. In Ghana, for example, Luginaah et al. (2010) were the f‌irst to extensively

focus on the subject, shedding light on the psychologicalimpacts of renting a home and how

the payment of the RA exacerbates renters’mentalhealth issues. Arku et al. (2012) followed

with a qualitative examination of issues regarding landlords’rationale for demanding the

RA, the mobility implications of the RA, renters’insecurities and vulnerabilities and how

renters mobilise funds to paythe RA. Recent studies have also brought new perspectives to

the debate on the payment of RA. For example,Owusu-Ansah et al. (2018) used public choice

theory to scrutinise the monopolistic power that emboldens landlords to demand RA for

longer tenancy periods. Adu-Gyamf‌iet al. (2019) emphasised how the payment of RA can

compel renters to aspiretowards becoming homeowners, while Asante et al. (2018) explored

the diff‌icult combination renters faceby renting and building concurrently. Recently, Ehwi

et al. (2020) have explored the f‌inancial precarity renters endure as a result of furnishing

their informal rentalhousing units and paying RA.

Despite these insights, available evidence regarding renters’perspectives about the

payment of RA (Asante and Ehwi, 2020;Luginaah et al.,2010;Owusu-Ansah et al.,2018)

bifurcates into those who seem very critical of the RA, often citing the f‌inancial precarity

that the long duration over which the RA is charged imposes on renters and thosewho are

happy to pay RA because of the tenure security that follows after making this lump-sum

payment. While there are merits to both perspectives, these studies do not discuss why

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