Housing solution for the low income

By Ferdinand Mwongela

As Kenyans scrimp and save to own a home, for the lower income class this dream is largely a fantasy.

Most have resigned to living in shacks under squalid conditions and it is not their fault. Developers in the booming real estate sector have expressed no interest in developing cheap homes for the poor. Instead, their focus has been the extremely lucrative business of building homes for the middle and high income groups.

A family stands outside their house.

But in the darkness, a light shines. Habitat for Humanity Kenya, a non-profit non-governmental organisation, has for the past 22 years been working closely with people in the low income bracket in both urban and rural areas to access quality housing at a cheap price.

"We facilitate the basic construction, which is very nice," says Simon Nyabwengi, the organisation’s National Director. Seated in his simple office, he adds that the target market for the organisation is people whose income ranges from Sh2,000 to Sh25,000.

Room for expansion

"We can make room for those earning up to Sh30,000 but those beyond this limit have to seek the mainstream mortgage facilities as we do not provide for them," says Nyabwengi.

He smiles cynically when I say housing units of up to Sh1 million are for the low income – because Habitat for Humanity Kenya finances the construction of houses with one or two bedrooms at an incredible value of Sh160,000 for the rural areas and Sh250,000 for the urban areas as homes there require to have toilets inside. Nyabwengi says the homeowner can, with time, expand the house depending on his financial abilities.

However, there is a catch. Not everyone can walk into the offices of Habitat for Humanity Kenya and seek financial assistance to build a home. One of the most basic demands of the organisation is that prospective beneficiaries must belong to a registered group with up to 30 members. This includes cooperative societies, or Saccos, associated with companies as long as the member seeking the loan earns less than Sh25,000.

The group must have a certified constitution and a savings account. Thus the person seeking a loan from Habitat for Humanity Kenya must be backed by members of the group as guarantors.

After successful application, Nyabwengi explains the money is then channelled through the group as that is the security. If a member defaults then no one else in the group receives any money.

"The group’s savings form some sort of security but the real collateral is the group, which is likely to be of people who trust each other," Nyabwengi says.

Unofficial Supervisor

The loans are dished out in instalments in what Nyabwengi calls "incremental building". For instance, for a Sh160,000 house, the beneficiary is first given a down payment of Sh55,000 to build the foundation. The person has to then repay this down payment for a period of between six to 24 months at instalments that range between Sh1,500 to Sh2,000.

After completing this repayment, one is eligible for the next loan of Sh70,000 to put up walls and the roofing. "One can move in once this is complete," says Nyabwengi.

After completing repaying this loan over a maximum period of 36 months, one is then awarded the remaining Sh30,000 for the finishing touches.

The group acts as an unofficial supervisor to ensure the money is put into the required use. "Once we give you the money, there is no reason why you should delay putting up the house," says Nyabwengi.

The beneficiary is also required to use the materials found cheaply in his or her area. For example, in Naivasha, quarried stones are common while in Bomet and Kisii it is burnt bricks.

In the rural areas, most beneficiaries prefer to work with family members and friends to build their homes as opposed to skilled and unskilled labour. However, in the urban areas, Habitat for Humanity Kenya usually constructs the house before handing it over to the owner.

"This is because most urban dwellers do not have the time to oversee the construction," says Nyabwengi.

One of the beneficiaries of the habitat for humanity kenya housing initiative. One is still under construction.

The basic urban house consists of a sitting room, a bedroom and a toilet. However, the design allows for future addition of more bedrooms.

Habitat for Humanity Kenya has projects in Bomet, Kisii and Naivasha. In Mai Mahiu, the organisation is building 116 houses for the internally displaced as part of their corporate social responsibility since, as Nyabwengi points out, they do not expect them to pay back.

Choronok group

Housing for Humanity Kenya is affiliated with Housing for Humanity International which, Nyabwengi says, brings together affiliate organisations from different counties who, however, operate semi-autonomously with the requirement that they keep to the mandate of the international organisation and maintain the brand name. The regional office in Pretoria south Africa ensures affiliate organisations do not veer off course and continue to provide housing to low-income earners.

Habitat for Humanity depends on fundraising and corporate sponsors to achieve this noble goal. According to Nyabwengi, venturing into other aspects of real estate development like high-rise flats would be contrary to the organisation’s principles and would result in dismissal.

"We intend to put up about 1,500 units every year," says Nyabwengi.

Habitat for Humanity Bomet Field Officer, Nancy Mateu, says communities have responded well to the organisation’s initiative. "There is no limit to the number of groups as long as they have been registered with the Social Services office," she says.

Currently, there are about 500 houses under construction for 25 groups in Bomet, Sotik and Bureti areas.

The Choronok group in Bomet is one of the growing list of beneficiaries. The chairman of the group, Joseph Mwei, bubbles with positive attitude towards life now that he is a proud homeowner. Since teaming up with Habitat for Humanity Kenya in 2004, Mwei says his group members have taken loans to build houses.

"Twenty group members already live in their own houses," he enthuses in Swahili. Additionally, more are under construction. Another group close to the Choronok group has already constructed and completed three houses.

Nairobi a hard nut to crack

Mwei was the fourth member in his group to complete his house, which he did in 2007. "Tumefaidika sana na hii Habitat for Humanity," he says. "Tunaishi kwa nyumba nzuri (we have benefited a lot from Habitat for Humanity. We now live in good houses)."

In the beginning, many people were sceptical and suspicious of the organisation’s motives when they promised cheap houses. Now those doubting Thomases have joined groups and applied for loans.

In Naivasha, an urban pilot project has seen several beneficiaries acquire low-cost incremental houses.

Nairobi, though, has proved a hard nut to crack. Nyabwengi cites lack of land as one of the major inhibitors since one of the organisation’s requirements is that a prospective beneficiary must own his or her land. This, perhaps, would explain why, despite being in the industry for so long, the organisation’s impact is yet to be felt on a large scale countrywide.