Though many countries in the global South have implemented policies to expand mortgage access, home ownership remains inaccessible to low-income households – meaning both the formal and informal rental market is a necessary housing solution. Rent-to-buy programs aim to close the divide between tenants and owners, so that a household initially rents a dwelling, then buys it at the end of a probationary period, with costs reduced by the rent that has already been paid.
Algeria’s rent-to-buy program was set up by the National Agency for Housing Improvement and Development, which provided significant public aid, making it possible to keep rents low. Residents pay a personal deposit, and then the dwelling is sold for a third of the market price. However, the high costs of the program and its rollout in peripheral areas, have led to questions of its sustainability, resulting in the government opting for more traditional rental programs instead.
Source:
Le Duff, D., Schaefer, J., & Tutin, C. (2021) Rent-to-Buy: What Potential Does it Offer For Improving Access to Affordable Housing? Agence Française de Développement (AFD).