State will up expenditure on housing to address shortage

A section of Soweto East in Kibera, Nairobi, showing the slum upgrading project. [PHOTO: PETER MUIRURI / STANDARD]

The Government is expected to increase expenditure on housing to address deficit in the sector. This is according to the Economic Survey 2016 released last week.

According to the survey, the Government will increase approved expenditure on housing significantly to Sh7.9 billion this financial year. This is even though the actual expenditure on housing decreased from Sh6.1 billion in 2013/14 to Sh5.9 billion in 2014/15 because few projects were completed.

Although the approved expenditure in 2014/15 was Sh7.4 billion, only Sh5.9 billion was spent representing 79.2 per cent utilisation. The increase is as a result of the housing sector being characterised by high interest rates on mortgages between 18 to 22 per cent, high cost of land and shortage of affordable housing. Estimates put the housing shortage at 200,000 per year.

The report goes on to say that Government has noted low level of urban home ownership, extensive and inappropriate dwelling units - including slums and squatter settlements.

Recently, the Government handed over 822 housing units in Kibera, which is part of a Sh2.9 billion project. 3,500 units will be constructed in the second phase.

The project which begun in 2012 consists of 144 three roomed units, 570 two roomed units and 108 single roomed units. Mathare slums is also set to be upgraded just like Kibera where the Government targets to give 10,000 housing units to each slum at a cost of Sh7.5 billion.

National Housing Corporation on the other had completed 45 units in 2015 compared to 243 in 2014. Six projects were on-going in various parts of the country as at end of 2015.

In the current financial year, the corporation plans to undertake eight projects in major towns across the country that will add national housing stock to a total of 3,820 units.

The National Housing Corporation also advanced Sh14.9 billion housing loans in 2014/15 to various counties.

The counties that benefited include Nyeri, Kiambu, Embu, Isiolo, Elgeyo Marakwet, Murang’a, Kakamega, Trans Nzoia and Machakos.

The building and construction sector, where real estate lies, was the most robust sector of the economy having grown by 13.6 per cent.