NEIGHBORHOODS FLATTENED TO MAKE WAY FOR URBAN

UNCLAS KIGALI 000534

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: BEXP BTIO ECON EFIN EINV ETRD PGOV RW
SUBJECT: NEIGHBORHOODS FLATTENED TO MAKE WAY FOR URBAN
DEVELOPMENT

1.(U) Summary: In implementing its vision of a modern Kigali,
the city government has begun demolishing poor neighborhoods
in Kigali city center. Evicted residents complain they are
being treated poorly, and unfairly compensated for their
expropriated properties. While the city is offering evicted
residents new housing options, the distance, the cost of the
housing and lack of employment opportunities in the new
location make relocation unattractive for many of the
displaced residents. End summary.


2. (U) On Sunday morning July 20, bulldozers began
demolishing homes in "Kiyovu Pauvre" (Poor Kiyovu). The
warren of mud brick houses and shops lying adjacent to posh
"Kiyovu Riche" (home to foreign embassies, up-scale homes and
many of Kigali's better restaurants),was targeted as prime
real estate in Kigali's urban development plan. Many of the
64 families evicted from the area complained that they were
not given ample time to relocate and were not adequately
compensated by the developer (government-owned Rwanda Social
Security Fund - RSSF) for their property. The Kigali City
Council advised residents last year of the intended
expropriations, but updated legislation governing property
valuation is still pending in Parliament. Local residents
claim RSSF offered compensation based on old laws which
consider replacement cost of the structures rather than the
market value of the property.


3. (U) The RSSF plans to install basic infrastructure and
construct commercial buildings on the site which will then be
sold to private investors. As part of the planned urban
development, the RSSF and the City of Kigali agreed to
provide alternative housing to evicted residents in the
Batsinda housing development on the outskirts of Kigali.
However, residents claim that the cost of the new housing
exceeds the compensation offered by the RSSF for the
destroyed homes, thus obliging displaced residents to assume
a mortgage, which many cannot afford.


4. (U) Embassy local staff who live near the site noted that
members of the community with larger homes (about 10-15
percent) were particularly upset with the amount of
compensation offered by the RSSF. Their counter-offer based
on market valuation was rejected by the RSSF as being too
expensive. Residents appealed to the Land Commission in the
Ministry of Land and Natural Resources but, before the
Ministry could investigate, the City ordered the destruction
of the homes, residents allege. The draconian action by the
City Council provoked outrage among the displaced residents
and even drew criticism from the normally pro-government New
Times and FOCUS newspapers.


You Can't Make an Omelet Without Breaking Eggs
-------------- -


5. (U) Kigali Mayor Aisha Kirabo Kakira asserted to the press
that the demolished homes were dilapidated and lacked basic
sanitation facilities, running water and electricity. While
acknowledging that the process was painful, she claimed that
the City advised residents a year ago about the impending
evictions and stated "it was a positive change and should be
welcomed." The mayor stressed evicted families were not left
out in the cold and were given the option of relocating to
the Batsinda housing development.
Qthe Batsinda housing development.


Build It and They Will Come
--------------


6. (U) The Batsinda housing development is a pilot project
undertaken by the RSSF, Kigali City and the Military Engineer
Regiment to provide affordable housing to low-income
residents evicted from expropriated land in Kigali. As of
the end of July 2008, an initial 250 units were completed,
with an additional 1000 units in various stages of
construction. The development is located on the outskirts of
Kigali, approximately 5 miles from the city center via a
dirt road. Each house has a living space of 200 square feet
including a kitchen, bathroom and two small bedrooms (which
critics assert are too small for larger Rwandan families).


7. (U) Although small, the units are well-constructed

(compared to the demolished homes) with hydro-foam block and
corrugated steel roofs on a cement slab foundation.
Amenities include a cistern fed by rainwater and a septic
tank/biodigester that provides biogas cooking fuel.
Electricity is provided through the electrical utility
company. Alternatively, residents are offered the option of
purchasing a solar panel subsidized by the City of Kigali
that would power several lamps for up to 5 hours.


8. (U) At $7,000 per unit, the cost of the new housing is
substantially higher than the average of $600 in compensation
offered for the expropriated properties in Kiyovu, and a
fortune for most residents of Kigali Pauvre, who make less
than $1 per day. Rusura Ephaim who is managing the Batsinda
development, told emboffs that the RSSF would provide
residents with low cost loans to purchase the properties but
admitted that the loan terms were still being negotiated and
he did not know how much they would have to pay in monthly
mortgage for their new homes. Ephaim also agreed the lack of
nearby services, transportation and employment were a major
concerns. Only ten percent of the new residents have jobs
and the site lacks such infrastructure as shops, schools and
medical clinics, he acknowledged.


9. (U) The issue of property valuation is a major impediment
to urban development in Rwanda. Property titles are
virtually nonexistent, there are only a handful of qualified
real estate appraisers and legislation governing property
valuation (drafted with the assistance of USAID) has yet to
be signed into law. A number of developers such as Stippag
have suspended property development projects due to the
uncertainty of land ownership, the high cost of construction
materials (the cost of cement doubled within one year) and
inflated property costs arising from speculation.


The Road to Batsinda is Paved with Good Intentions
-------------- --------------


10. (U) Comment: The GOR and City of Kigali have good reasons
to quickly implement urban development projects. Kigali is
one of the fastest growing cities in the world and the
problems it faces today from urban growth will be tenfold in
a few years' time. The low cost housing project in Batsinda
is in many ways a commendable effort to offer affordable
housing options to Kigali's displaced poor. However, in its
haste to implement these projects the GOR is running
roughshod over the legitimate concerns of expropriated
property owners and ignoring real hardships faced by
displaced residents. As the country seeks to modernize its
capital city, the increasing divide between rich and poor
will become more evident as low-income families are forced
further from the city center and its economic opportunities.
End comment.
SIM