Visit of HUD Secretary Jackson

UNCLAS ACCRA 003001

SIPDIS

SIPDIS

E.O. 12958: N/A
TAGS: EFIN ECON GH
SUBJECT: Visit of HUD Secretary Jackson



1. Summary: Alphonso Jackson, U.S. Secretary for Housing and Urban
Development (HUD),exchanged views on addressing Ghana's housing
needs with President Kufuor and a range of government and private
sector representatives while visiting Accra November 26-29. The
Secretary highlighted the lack of secure title to land in Ghana as a

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major impediment to attracting investment in the housing sector and
suggested Ghana explore ideas used in the United States such as the
Low Income Housing Tax Credit to provide incentives to invest in low
cost housing. Secretary Jackson invited the Minister for Water
Works and Housing and other GoG officials to come to the United
States to meet U.S. government and private sector representatives
involved in the housing sector. See action request in paragraph 6.
End Summary


2. Secretary Jackson visited Accra in response to President Kufuor's
invitation to come to Ghana to share his views and expertise. While
in Ghana, Secretary Jackson met with: President Kufuor; Minister of
Water, Works and Housing, Hackman Owusu-Agyeman; Minister of Finance
Kwado Baah-Wiredu; Central Bank Governor Paul Acquah;
representatives from the real estate and banking sectors; and the
local Habitat for Humanity chapter. He delivered a keynote address
at a Regional conference on financing for affordable housing
co-sponsored by HUD and UN Habitat, participated in the signing
ceremony of a $30 million loan guarantee agreement between OPIC and
Ghana Home Loans, one of the very few banks in Ghana that provide
mortgage loans, and made a site visit to a slum area near Tema,
Ashiaman Tulaku, that is a part of a GoG-UN Habitat pilot project
supporting slum upgrading. The Secretary was accompanied by his
wife, Marcia Jackson and HUD staff members. Mrs. Jackson, a former
teacher, visited a local school to interact with the children and
the parent's association and to make a donation of books and paper
provided by the U.S. embassy, as well as educational posters
provided by HUD.


3. Secretary Jackson delivered a consistent message to all his
interlocutors. He emphasized that Ghana needed to ensure that
investors and developers could secure clear title to land (note:
currently it is extremely difficult to establish clear title to land
in Ghana due to overlapping claims, traditional practices regarding
control of land, and poor mapping and address systems. End note).
Absent clear title, banks will be reluctant to lend. Secretary
Jackson indicated there were many US-based developers who would be
interested in joint-ventures in Ghana but the land title issue
remains a major stumbling block. The Secretary also suggested the
GoG might consider models such as the Low Income Housing Tax Credit,
which provides tax breaks to developers in the U.S. who construct
rental housing for low income people as a means to construction of
affordable housing.


4. GoG officials and private sector representatives acknowledged
the importance of secure land tenure. Both the MCA Compact and a
World Bank project will address some elements of land tenure but
Ghana has a very long way to go before land (or houses) can be used
as collateral to leverage financing. President Kufuor and others
noted that the government is, as an interim step, trying to assist
through "land banks" for use by developers. Currently, the GoG has
50,000 acres of land, with clear title, available for residential
development. However, GoG recognizes it needs the private sector to
drive the process if it is to provide the estimated 500,000 housing
units needed. Private sector real estate developers who met with
Secretary Jackson suggested that bankers should be willing to lend

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in situations where a long term land-lease has been granted. Fifty
to ninety year leases are easier to obtain than clear title in areas
where land is held by traditional leaders. Secretary Jackson said
that while that was logical in some respects, U.S. banks would not
be willing to finance developers without clear title.


5. Secretary Jackson extended an invitation to the Ministers with
whom he met to come with staff to the United States to learn more
about various programs and approaches that have been put in place to
promote creation of affordable housing and to meet with developers
who might be interested in investing in Ghana's housing market. The
GoG officials welcomed the invitation.


6. Comment and action request: The Secretary's visit was well
received by GoG officials and the private sector, and his focus on
land tenure issues in Ghana was on target. The Ministry of Finance
has followed up with a request for more information about the Low
Income Housing Tax Credit as an incentive to build affordable
housing. Post would appreciate HUD assistance in providing that
information. The press coverage of the visit was positive. End
comment and action request.

BROWN