Inside the government’s affordable housing scheme

The government has embarked on an ambitious project aimed at addressing the perennial housing problem in different parts of the country.

World Bank’s Kenya Economic Update: Housing—Unavailable and Unaffordable notes that Kenya has targeted the provision of 200,000 housing units annually for all income levels.

However, the production of housing units by 2017 was less than 50,000 units annually, well below the target number, culminating in a housing deficit of over 2 million units, with nearly 61 percent of urban households living in slums.

This deficit continues to rise due to fundamental constraints on both the demand and supply side and is exacerbated by an urbanization rate of 4.4 percent, equivalent to 0.5 million new city dwellers every year.

Under the last leg of President Uhuru Kenyatta two-year term, he has set an annual target of 500,000 low-cost housing units to meet 200,000 annual deficit. This is part of the Big Four Agenda, which also captures manufacturing, access to healthcare, and food security.

In his Jamhuri Day Celebrations speech, President Uhuru Kenyatta said the Government had laid an appropriate legal and policy foundation that would provide the platform to transform the country-housing sector.  

“As promised, we have established the Kenya Mortgage Refinance Company, whose sole remit will be to work with the banking sector and the cooperative movement through SACCO’s, to make available affordable mortgage finance for those wishing to own a home,” said President Uhuru.

“The Kenya Mortgage Refinance Company will help to extend the tenure of housing loans from the current average of seven years to at least twenty years.  It will also assist in driving interest rates on mortgages to single digits,” he added.

Already the government has opened an online portal where Kenyans who want homes need to register.

According to the BomaYangu website, for you to be eligible to own a house, one must be a Kenyan Citizen, be over 18 years of age and have a valid national identity card.

The website further explains that one must be able to complete his or her profile by submitting personal details, housing preferences, and the type of the house they are applying for.

Details are verified with the relevant government stakeholder for authenticity.

“Allocation of houses to qualified applicants would start as soon as the construction of the affordable houses begins. The allocation process for the available houses would be done in a regular, fair and transparent system free of any human intervention and contact,” read part of the BomaYangu website.

According to John P. Karanja, Director Finance and Operations at ACAL the realisation of the provision of Affordable Housing is not only in President Uhuru’s Big 4 agenda but it is also part of the fulfillment of the constitution Cap 4, article 43.

He notes that this guarantees every Kenya the right to accessible and adequate housing and reasonable standards of sanitation.

And to this end, he says counties have a pivotal role to play in the realisation of this agenda by proactively being engaged in the provision of affordable housing in their areas of jurisdiction.

According to Karanja, the counties have since signed memoranda’s with the national Government to construct at least 2,000 affordable housing units per year.

He says that the counties are supposed to provide land on which the houses are to be constructed.

Most of these houses are targeted in the urban areas where there is a great challenge of decent housing; this has in the past led to the proliferation of unplanned settlements or slums.

"Provision of affordable housing and social housing has never been a private sector agenda, and as this segment of real estate is not attractive enough for the investor," he reckons.

"As such, there has been an oversupply of houses in the upper and high-end segment of the market whereas the low-end markets remain underserved."

“Government should become more innovative in exploring workable ways to encourage private developers to enhance or develop building technologies to bring down the cost of construction.”

He suggests that the Land Value capture concept should be considered as an alternative model to address the housing agenda.

The government should free some of their strategic land asset that is under-utilized to developers, and provide the supporting infrastructure e.g roads, water, electricity, sewerage, green spaces etc.

This may take a form of regeneration of the old Government houses, settlement schemes, slums, and un-developed areas by offering development rights to developers in exchange of provision of a proportion of affordable houses.

“The success of the housing agenda will be anchored on the county’s urban spatial planning capacity and their focus on development control as guided by their individual master plans. Further to this, counties must be strategic in improving the living standards of the people by offering employment and business opportunities within the county.”

“This will, therefore, create opportunities for developers to spearhead the development of alternative building technologies; this can be enhanced through collaboration with TIVET, Universities, and Manufacturers.”

According to Public Works Permanent Secretary Prof Paul Maringa, the affordable housing units should be achieved by the year 2022.

The PS notes that the move shall be met by concerted efforts by both levels of government, budgetary allocation and partnerships with financial institutions.

“The low-cost affordable housing units shall be met through budgetary allocation, the partnership with a financial institution, private developers, cooperatives and manufacturers of building materials,” said the PS.

In a recent assessment of the project in Embu County, seven cabinet secretaries noted that the government was on track in delivering the units.

The delegation from the National Development Implementation and Communication Cabinet Committee led by Interior Cabinet Secretary Fred Matiang’i expressed hope that that the government will surpass the target this year.

Transport and Housing Cabinet Secretary James Macharia said they acquired experienced contractors and skilled workforce who were doing the job well and could even put up one million houses.

Macharia said an inspection of various housing projects in several parts of the country verified that the agenda was achievable contrary to naysayers who said it was not possible.

“We have seen people question that the Housing project can be done, but we are here to prove that it is possible to provide affordable houses to the citizens. Kenya has a deficit of 200,000 houses annually while 6.4 million Kenyans live in slums. The housing project will eliminate slums in Kenya,” he said.

Macharia said the housing unit in Embu for instance, opposite Izaak Walton Hotel, would be completed on time, that is, by June 1 this year.

Counties such as Meru has zoned and set aside 16.9 acres of serviced land across the county for construction of the affordable housing.

This is in line with President Kenyatta’s big four agenda. The land; 2.7 acres in Meru, 6 acres in Timau, 4.2 acres in Nkubu and 4 acres in Mikinduri is known, profiled, has access to water and good roads leading to it.

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Affordable Housing Scheme