The Government is hunting for foreign investors to put money into a fund being set up to finance construction of 500,000 housing units.
The units, part of the State’s plan to provide affordable housing, are meant for low income earners in an effort to beat a 250,000 housing deficit in major urban areas.
Housing and Urban Development Cabinet Secretary James Macharia says the National Housing Development Fund is also targeting money from pension funds, Saccos and banks as well as individual Kenyans’ savings.
“We are planning to come up with a special bond, like the M-Akiba bond, to see if ordinary Kenyans can contribute by putting their savings in this fund,” he said last week.
During a meeting between the Government and Chinese officials on Friday, Mr Macharia also revealed China has agreed to put money in the fund.
“We have had talks with the Chinese government and they are looking into investing in this fund. They are into big infrastructure projects but given the returns that are expected when this housing project comes into fruition, they definitely want to be part of it,” he said.
Last month, the CS wrote to the National Assembly asking for Sh6 billion to deliver several things including the construction of the low-cost 500,000 homes.
Of the money, Sh4 billion is to be used in a project to upgrade slums while the rest will be used to build the low-cost houses by 2023.
Expensive mortgages and high interest rates on loans have made it hard for the majority of Kenyans to access financing for homes.
Macharia said the biggest challenge for developers was land, and the Government was coming up with an arrangement where developers can cheaply access land for construction.
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“There will be public-private partnerships where the Government can make land, especially idle land held by counties, available for developers to put up houses,” he said.