State offers purchase guarantees to developers of low-cost housing units

Private companies that will partner with the Government to build half-a-million houses will be allowed to sell the houses to the Government if they do not get buyers, a principal secretary has said.

The deal is in the form of a put option to sell the houses back to the Government after five years, Housing and Urban Development PS Charles Hinga said.

“We have guaranteed demand in a huge public service together with counties. For further assurance, in five years, if they do not sell the houses, we are going to buy them back in a put option,” he said. Mr Hinga was speaking at the Commercial Bank of Africa Economic Forum. He said the Government was determined to deliver on its housing pledges under the Big Four agenda and would break ground for the first batch of houses at Park Road, Nairobi, in three months.

“We are going to take five years to sink money into the National Housing Development Fund, in terms of proposed employers’ contribution to match employees,” said the PS. “We’ll use the fund to buy back any units that will not have been taken.”

During the Governors’ Conference next week, he added, the National Government would sign 70 projects with counties that will see developers get access to land, with the central government funding urban infrastructure.

“Land in Nairobi is the most expensive in the continent, yet the Government, counties, and State departments are the biggest land owners. What we are doing is to consolidate all this in a land bank, service it, and release it to the private sector for development,” he said.