This study assesses the potentiality of affordable housing investments in City of Kigali as a case study by exploring affordable housing market through determining affordable housing demand and market size, this was done by gathering data from affordable housing need reports carried out in Kigali and six affordable housing developers chosen selectively; examines the political economy toward affordable housing by the investment code and the set incentives on affordable housing; assesses the level of profitability in affordable housing by different indicators gathered from developers and housing contractors; also examines the challenges faced by real estate developers in affordable housing development by information gathered from different housing experts through reports and questionnaires. The data were analyzed and expressed in figures and ratios to get both qualitative and quantitative results.
This study found that there is a considerable market for affordable housing in Kigali; the political economy toward affordable housing is favorable due to institutional framework and set incentives; the profitability level found by return on investment is 27% within 12 months after project completion, this is high according to the return on investment and time it takes to sell; furthermore the challenges faced by affordable housing developers have some solutions, but not all have solutions so far.
It concludes that there is high potentiality of affordable housing investments in Kigali, also it gives recommendations to form investment partnerships and improve experts’ skills for achieving low cost housing.
Keywords: Urbanization, potentiality, affordable housing, housing demand, profitability.