Market Dynamics and Institutional Challenges in Urban Rental Housing: An Evidence from Kumasi, Ghana

Abstract

Housing as shelter is a basic necessity against the adversaries of the weather, a haven of safety for precious items, a privacy for social life, security for better behaviour, and as a real estate property. As an asset, it is valuable for life self-fulfilment and actualisation consequent upon its economic and socio-cultural externalities. This study analyses Kumasi's rental housing market, structured across public, formal private, and informal sectors, each exhibiting distinct market failures. The public sector operates as a state monopoly with subsidised rents causing chronic shortages, while the formal private sector's oligopolistic structure leads to affordability challenges. The dominant informal sector suffers from severe information asymmetry, with landlords exploiting pricing power amid housing shortages. Methodological limitations include reliance on rental agent data rather than direct landlord-tenant engagement. The problems in the housing sector include fragmented market actors and heterogeneous products. Findings highlight the need for regulatory reforms to improve transparency, including establishing a Rental Housing Secretariat and standardised contracts. The research advocates integrating rental housing into urban policy, challenging Ghana's homeownership bias. Practical recommendations include regulating rental agents, incentivising affordable housing development, and strengthening tenant protections to address power imbalances. The government should scale down its direct intervention in housing provision and policy terms, giving rental housing the appropriate attention it deserves as a complementary option to homeownership. Alongside, the private sector will be tuned in as the engine of rental housing delivery. This work contributes to housing justice by proposing market-based solutions to informality and affordability challenges in Ghana's urban housing sector.