Advance rent mobilisation strategies of graduate renters in Ghana: a submarket of the private rental housing market

Abstract

The practice of advance rent, where landlords ask renters to pay a lump-sum rent covering 2 or more years, is gaining scholarly and political attention in Africa. Nevertheless, there is limited empirical research investigating how renters mobilize funds to meet this financial commitment. Existing literature suggests that renters, irrespective of their educational level, face difficulties in paying advance rent, hence compelling them to rely mainly on their bonding (family and friends) and bridging (employers and financial institutions) social capital to pay advance rent. Drawing on rational choice and social capital theories coupled with data from a novel (graduate) sub-market of Ghana’s rental housing market, this article finds that personal savings remain the most rational current and future source of funding options graduate renters draw upon to pay advance rent, albeit some still drawing on their social capital. The findings demonstrate that graduate renters do not use bonding social capital in their future mobilization strategies after they have drawn on the same in previous years, although they continue to rely on their bridging social capital and other strategies to mobilize funds for advance rent. The study suggests the need to rethink rational choice and social capital theories to incorporate inter-temporal dynamics among different social groups and to traverse the current binary conception of the rental housing market in Ghana to consider different sub-markets and how they respond to existing challenges in the housing sector.

Finding a home away from home: Housing choices of itinerant immigrant retailers in the Wa municipality, Ghana

“…The research participants reported instances of disagreements and or conflicts between landlords and tenants and between the tenants and co‐residents over home maintenance and utility payments. Contrary to previous studies in Ghanaian cities (Arku et al, 2012; Asante et al, 2022; Ehwi et al, 2020), the current study revealed that, when dealing with itinerant immigrants, landlords preferred short‐term tenure duration so that they can adjust rent to reflect changing economic conditions. This implies that the itinerant immigrants may constantly face eviction if they fail to meet rent obligations in any particular year.…”

Urbanization, Legacies of Elite Capture, and Multi-Dimensional Exclusions in Ghana: Towards Just Housing and Neighborhood Policies in African Cities

“…Minimum wage sits just a little over $1 an hour (see Bloomberg Tax, 2021) and with most of the population trapped in insecure lowincome informal jobs (Awaworyi and Danquah 2020;Ehwi et al, 2021;Morrison et al, 2021), the number of minimum wage earners is relatively small. Even those with higher educational attainments, including graduates, face financial hardships evidenced by the incessant demonstrations, strikes and other industrial actions for better working conditions in the country (Asante et al, 2021).…”

“…Those already in the market barely survive since they find it difficult to raise extra lump sums to renew their leases (Asante et al, 2021). Thus, Ghana's private rental housing sector, generally, commands high rents relative to income, which are seldom reinvested to improve the conditions of the houses, thereby encircling the lowincome class in 'a high-cost, low quality trap' Talukdar, 2008: 1924) in poorly serviced neighborhoods where they pay considerably high rents relative to the quality of the houses (Morrison, 2017(Morrison, : 2568.…”

Unpacking the Structure and Functioning of the Urban Rental Housing Market in Kumasi, Ghana

“…The urban rental market in sub-Saharan Africa is fraught with several challenges (Asante et al, 2021). Majority of urban dwellers reside in deteriorated, overcrowded structures and may o en experience limited access to basic ameni es such as sanita on, water and waste disposal systems (Appeaning-Addo, -2016; Obeng-Odoom & Amedzro, -2011) at a rela vely higher cost (Luginaah et al, 2010).…”

“…Landlords insist on the payment of two years advance rent, which are paid by new and exis ng tenants. The posi onality of the body of literature suggests the gap in supply of rental housing units in Ghana and the inefficiency of the state apparatus to protect tenants account for the total disregard of the laws (See Asante et al, 2021).…”