Building plans applications approvals fell for three consecutive years

The number of building plans application approvals have been falling for the past three years. This is according to a report by Architectural Association of Kenya (AAK).

The report, dubbed ‘Status of The Built Environment’ covering the period between January to June, released yesterday cites the time it takes for approvals to go through as one of the reasons.

“The average number of days taken for approvals to be issued is now 41.35 days, but it should be 30 days or less in the automated development permit and this is what we are advocating for. This negatively affects the number of building plans approvals leading to low value of development projects approved and also total permitting fees collected by the Nairobi County Government,” said AAK President Mugure Njendu.

The third edition of the report in quarter one of 2017 showed there were 1,140 development plans approved while in 2018 it was 1,167. This year up to June there were only 955 plans approved, with a value of Sh84 billion, translating to Sh333 million permit fees collected by the county.

The residential sector had the highest approvals at 74.32 per cent of total approvals, public use class (11.23 per cent), industrial class (8.63), commercial (5.93) and educational (0.21).

The report by AAK matches that of the Kenya National Bureau of Statistics data in March this year, which showed that last year’s approvals were the lowest since 2014. Developers blamed a misfiring economy that hurt demand for housing and office space.

Consumption of cement also dropped by five per cent to 5.49 million tonnes last year from 5.79 million in 2017, reflecting the reduced pace of putting up new buildings in the country.

The AAK President also said that a lot of construction projects, about 85 per cent, are going to foreigners. She attributed this to lack of financing and capacity by local contractors.

“To us as an association it has been our key advocacy matters. Eighty per cent of the value of the current large infrastructure projects are done by foreign contractors according to National Construction Authority and we need to ask ourselves why it is like this because it is having an effect on our economy. Our contractors lack capacity and the huge financial muscle that is needed for big projects like the foreign contractors have,” she said.

According to the report, the residential sector reported increased activities mainly driven by the government’s affordable housing agenda.

In commercial and retail, there was increased uptake of retail space, thanks to global and local retailers expanding operations.

“There was a decline in rental yield in the first half of 2019. This is attributable to an open increase in retail space supply, which saw average occupancies drop. Property managers reduced rental charges to attract tenants,” said the report.

At the same time, businesses continue to move away from the Nairobi CBD in search of exclusive locations, ample parking space and less congestion.

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