Low incomes, few houses: How high rent prices leave tenants with empty pockets

The proximity of Kajiado County to the country’s capital is one of the reasons tenants are spending more than half of their incomes on rent as demand for housing in the area continues to skyrocket.

Kenya National Bureau of Statistics (KNBS) data shows that Kajiado County has the highest rent-to-household expenditure at 64.7 per cent, even as the rural part of Wajir posts the highest across the country at a record 73.9 per cent.

This means that households in Kajiado County are spending 64.7 per cent of their income on rent, with those in rural Wajir spending 73.9 per cent of the same.

The Wajir phenomenon has been linked to the high demand for shelter within areas closer to where aid is usually distributed, with Superior Homes Head of Sales Clive Ndege pointing out the scarcity of shelter due to the pastoral nature of the residents.

He explains that these high figures, especially in rural areas, may be influenced by the levels of income, which are lower compared to urban areas.

For example, Kisii County, which can easily be categorised as a largely rural has a rent to household expenditure ratio of 54.6 per cent. Similarly, tenants in West Pokot and Nyandarua counties spend 46.9 per cent and 46.8 per cent of their household expenditures on rent.

Capital city

This is a contrast when compared to Nairobi City County, where the rent-to-household expenditure rate is 38.0 per cent. A decade ago, Nairobi City County had the highest rent-to-household expenditure in a similar report by KNBS at 40.8 per cent.

“Comparison of rent burden among counties reveal that Nairobi County, which is the capital city, recorded the highest proportion of household expenditure on rents at 40.8 per cent followed by Mombasa and Kiambu Counties at 30.9 per cent and 29.0 per cent respectively,” reads the Kenya National Housing Survey Basic Report 2013/2014 by KNBS.

“While Mombasa is a city, Kiambu County has many ‘dormitory towns’ of Nairobi City, which have generally necessitated higher property and rent values in such towns.”

In the current Kenya Housing Survey Basic Report 2023/2024, Mombasa County has a rent-to-household expenditure of 34.6 per cent and 34.9 per cent for Kiambu County, which is a slight increase over the period.

Nationally, rent to household expenditure has increased from 33.8 per cent in 2013 to 36.9 per cent in the latest report.

The high rent to household expenditure in Kajiado County, explained Mr Ndege, is a result of slow development that is not matching population growth brought about by the migration of Nairobi City residents to the bedroom towns of the metropolitan area.

Kitengela, Ongata Rongai, Kiserian and Ngong, he listed, are the towns in Kajiado County that have become attractive to tenants seeking rental residential that are affordable when compared to Nairobi City units.

“However, this immigration has increased the demand for housing in Kajiado County, and the demand has not been paired up with the same level of supply. That means with your Sh30,000 earnings, then you end up paying Sh15,000 to Sh20,000 in terms of rent, which could explain the 64.7 per cent or call it 70 per cent going towards rent, which is the most affordable,” he explained.

While 30 per cent is always fronted as the recommended amount spent on housing for households, the law of demand and supply usually comes into play. A December 2024 report by Financial Sector Deepening (FSD) Kenya titled Developing a Tenant Purchase Scheme Credit Policy, details the confusion that comes with this figure.

“Industry standards often suggest that housing expenses should not exceed a certain percentage of gross income, with common recommendations at around 30 per cent. This figure is used for illustrative purposes. However, there is a significant lack of supporting data regarding the actual proportion of household income spent on housing,” the report says.

The highest rent recorded across the board in the latest KNBS report is Sh120,000 for a five-bedroom maisonette in Kajiado County. The data shows units in Kajiado County cost more when compared to Nairobi City. For example, for Sh38,000, you will get a five-bedroom apartment in Nairobi City. However, for Sh37,500, you get a three-bedroom apartment in Kajiado County.

A two-bedroom apartment in Kajiado County costs Sh17,500 monthly, while the same goes for Sh15,000 in Nairobi City County.

“In Kajiado, a rent of Sh120,000 was recorded for a five-bedroom house. In Nairobi City, households paid Sh70,000 for a three-bedroom townhouse and Sh65,000 for a three-bedroom bungalow. Among the lowest rents, households in Siaya paid Sh1,000 for single-room Swahili/compound houses with shared facilities and no designated bedroom,” the KNBS report says.

A three-bedroom in Kajiado County goes for the same price as a similar unit in Mandera County at Sh15,000.  The monthly rental price for a one-bedroom bungalow in Mandera County is twice the price, at Sh8,000, compared to a similar house size in Kajiado County.

Isiolo County

In Kisii County, a two-bedroom apartment goes for Sh12,000 a month, while the same goes for Sh15,000 in Nairobi City County, Sh13,000 in Kitui County, Sh12,500 in Isiolo County, Sh15,000 in Bungoma County, Sh13,250 in Kakamega County and Sh17,000 in Kajiado County.

For Sh35,000 a month, you will get a four-bedroom bungalow in Isiolo County or a four-bedroom maisonette in Machakos County.

In Nyeri County, a four-bedroom maisonette goes for Sh42,000.

There are some counties where rent prices of units do not surpass Sh10,000, which speaks to the quality and demand of housing in those areas.

For example, the most expensive unit in Nyamira County is a two-bedroom flat that goes for Sh7,750, while in Siaya County, the pricey unit is a one-bedroom apartment that costs Sh8,500.

Mr Ndege notes that Kisii County is one of the most densely populated areas.

The lack of available land for rental developments is due to subdivision through inheritance.

“This scarcity of housing increased demand and consequently rental prices,” he said. Considering these are rural areas, with a decent house going for between Sh5,000 to Sh7,000, he noted, this is quite significant in someone’s monthly earnings.

“For an economy where most of the businesses are in the informal sector or small-scale farming, then this will take a bigger chunk of their income, which goes towards rent,” he said.

Mr Ndege’s argument is confirmed when you consider the minimum wages in the country. The lowest income earner in the country takes home Sh8,109 according to Legal Notice 125 of July 1, 2022, which gazetted the current wages.

Lowest paid workers in the cities of Nairobi, Kisumu, Mombasa and Nakuru make Sh15,201 a month. Those in former municipalities such as Ruiru, Mavoko and Limuru take home Sh14,025, while the rest are to be paid Sh8,109.

During one of the sessions rallying Kenyans to embrace the affordable housing programme and the relevant tax, President Ruto singled out Kisii and Nyamira towns as those which are in dire need of new units.

“If there are two counties that really deserve affordable housing, it is Kisii and Nyamira. The plots are few, and people are many. And if we are not careful, if we do not do the right thing, we will not be able to feed ourselves, if we continue subdividing the land we have instead of producing food,” he said.