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REPUBLIC OF MALIOne People – One Goal – One Faith

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MINISTRY OF URBAN DEVELEOPMENT AND HOUSING ------------**------------

MALIAN HOUSING OFFICE

SYMPOSIUM 2015 – SHELTER AFRIQUE

« Affordable rental housing in Mali »

PRESENTED BY: Mr. MAMADOU DIABY,

DIRECTOR GENERAL OF THE MALIAN HOUSING OFFICE

MAY 2015

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SUMMARY

□INTRODUCTION

□SITUATION OF THE SECTOR

□MEASURES TAKEN□Regulatory texts□Taxation

□Hire-purchase

□CONCLUSION

□ RECOMMENDATION

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INTRODUCTION□ This is a communication about the situation of rental housing sector in Mali

which varies a lot from town to town.

□ In response to desire to offer a ‘‘house’’ to the majority of Malian people as a response to the housing crisis in Mali, the sector has been ignored and consequently, it has declined in the recent year. However, constraints related to acquisition of building grounds and the real estate in Malian big towns and particularly in Bamako make access to private property a monumental task.

□ This situation definitely leads to the scaling-up of the numbers of squatters or increase in housing needs in the informal sector for the low and middle income earners who are unable in the current economic crisis period to acquire land or houses.

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SITUATION OF THE SECTOR□ Despite its significance, especially in big towns, the rental sector has to-date

attracted very little research especially in studies related to housing policy. Also the existing statistics are none-exhaustive hence do not allow one to capture the issue seriously and Cleary.

□ According to the data from the study on housing conducted by the Ministry of Urban Housing in 1992, it appears that :□ In urban areas, 53,9% of the population lives in owner-occupier houses where as

33,9% lives in rental ones.□ In rural areas 92,1% live in owner-occupier houses and 1,8% in rental ones.

Report on urban indicators of the housing programme, 1992.□ Regarding the unique case in Bamako, those leaving in owner-occupier houses

represent 58,1% and 36,9% in rental houses.

□ These statistics require careful analysis and interpretation given the dramatic expansion of the spontaneous settlements in Bamako, on the one hand, and social housing programmes initiated by the Government curtailing the expansion of the said spontaneous settlements, on the other.

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SITUATION OF THE SECTOR□ Furthermore, it is not easy to make a presentation on the population

categories affected by the rental houses in a very exhaustive manner due to lack of clear data regarding the rents paid.

□ Generally, there are two types or rentals :□Private rental : essentially in the form of individual units, public-

private rentals (rental property portfolio) being quasi-inexistent.

Yet, it is the ‘‘private rentals’’ which can certainly allow ‘‘professionalization’’ of this sector and create optimum conditions for regulation and planning.

□Public rentals : essentially made up of housing referred to as ‘‘administrative’’ in individual or collective form.

  This kind of rentals tends to disappear with the abolition of ‘‘housing for executives’’.

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SITUATION OF THE SECTOR

□Finally, the setting up of social housing has raised a new

type of rentals – hire-purchase. In this type of housing,

the beneficiaries remain tenants of houses that will

eventually become theirs at the end of amortization of

the debts.

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MEASURES TAKENREGULATION OF THE RENTAL SYSTEM

□Housing rents are regulated by the decree No 130/PG-RM of 29th August 1967 bearing modalities on setting of rent ceiling of building developments and the decree N° 146/PG-RM of 27th September 1967 bearing the regulation of rents for residential quarters in Mali.

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MESURES TAKENProvisions of the decree N° 130/PG-RM of 29th

August 1967 :□ In the aim of ending the arbitrary fixing of rent by landlords/ladies, the

Government of Mali adopted the decree given below which fixes the rent ceiling as follows : □ Amortization: 4% per year of the construction cost of the building, □ Maintenance forecasts : 2% per year of the construction cost of the building.□ Margin : 5% per year.

□ Over and above these elements, there is a service delivery tax.

□ Furthermore, there are plans to set up a Permanent Commission in charge of fixing rents.

□ Moreover, it is required that all landlords/ladies of a building development for rental should send the necessary documents to the Ministry, Chair of the Permanent Commission for Rents to determine the construction cost of the said building, one month before renting it out .

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MEASURES TAKENProvisions of the decree N° 146/PG-RM of 27th

September 1967 :

□ It should be noted that the provisions of this decree govern relations between landlords/ladies and tenants.

□ It defines the obligations of the landlord/lady and the tenant and specifies that the rent ceiling should not in any case exceed 11% of the value of the building per year.

□ However, at the technical level, determination of the rent ceiling poses problems if one wants to apply the laws in force. In deed, it specifies that the scales serving as the basis for calculating the rent must be revised in January every year. Developed in 1967, these scales were revised only once in 1990 by the National Directorate for Urbanization and submitted for opinion to the Department of Equipment and Housing.

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TAXATION

□ In the rental sector, taxation include:

□ Tax on land revenues represent 15% of the amount of rent for the hard

and semi-hard buildings, and 10% for adobe buildings.

□ Registration fee is 3% of rent amount.

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HIRE-PURCHASE

□ As indicated above, hire-purchase emerged with the policy to set up

social housing initiated by different governments of Mali.

□ Hire-purchase is not yet regulated in Mali, meaning that there are no

official laws governing it.

□ However, it is subject to notary acts between the landlord/lady and

the tenant, which define the different clauses,

□ It is essentially under government programmes for access to

housing.

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HIRE-PURCHASE

□ For sale of housing properties, commissions of attribution, made up of

representatives of government institutions and civil society have been set up

in Bamako in the Ministry in charge of housing, in the regional headquarters

at the regional governors’ offices and in other secondary towns, at the

prefecture.

□ These are housing facilities meant for all categories of the Malian

population : Malians in the Diaspora, employed and none-employed having

income ranging between 56 920 and 200 000 FCFA.

□ The payment period is between 20 and 25 years.

□ Monthly payments range from 17 330 to 94 000 FCFA (34.66 to 188 $US).

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CONCLUSION□ From the general observation, it seems that 33,9% of the Malian urban

population leaves in rental housing with a big majority of the low-income earners deprived of access to land and housing property.

□ Furthermore, the rental sector involves the following actors :□ Administration, through Malian Office of Housing and the Directorate General of

Public Goods Administration.□ The private sector through real estate agencies, brokerage agencies and real

estate promoters,□ The informal sector through proprietor family.

□ Apart from the activities carried out by the administration in this field, those of the private and informal sector remain difficult to capture.

□ All in all, the decrees established have not achieved the expected results. The landlords/ladies continue to arbitrary determine rents as they wish and the measures supporting the implementation of the said laws are quasi-inexistent.

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RECOMMENDATIONS□ For the target population, (low-income earners), support to the rental sector

should aim at improving living conditions, stabilization of rent costs and specification of landlord/lady-tenant relations

□ Other actions to cushion landlords/ladies and tenants could be carried, for example the generalization of written renting contracts in order to better manage evictions and regulate rent increments. Furthermore, necessary support should be accorded to Tenant Associations.

□ Support to the rental sector should also consist of promotion of policies that may interest and attract small investors through secure regulation of real estates, tax aid and access to promoter credit.

□ Finally, the objective to be achieved should be to increase supply of rental housing, which shall contribute towards improving the quality of property portfolio and lower rents.

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Thank you