How to make affordable housing a reality in Kenya
By Oumar Diop | January 26th 2017
Goal eleven of the Sustainable Development Goals is about making cities inclusive, safe, resilient, and sustainable. According to UN Habitat, the key target of Goal Eleven was to ensure that all people have access to adequate, safe and affordable housing.
Creating a housing market that accommodates people with low-income should be a priority for Kenya’s policy makers.
Success on this front has, however, remained elusive. Escalating land prices has put housing nowhere within reach for low-income earners.
Making housing affordable and accessible requires creative solutions.
Industry players have tested affordable housing models. However, it is important to note that even though it is good to try out new technologies, use of alternative building technologies does not necessarily make houses cheaper. For example, one might use cheap construction materials but the design model requires more input and therefore increases the price of a house further to the end buyer.
Looking at the problem from a sector perspective rather than from a specific chain is necessary and creates more room for innovative solutions.
The government has played a distinctive role in solving the housing problem for the poor.
Examples include the Kibera Slum Upgrading Project and more recently, Nairobi Governor Evans Kidero announced a housing plan to build over 10,000 new housing units. These are well-intentioned projects, but evidence suggests they are likely to get mired in red-tape and do not benefit those they were intended for.
So, what can the Kenyan policy makers do to solve the housing problem among the poor? One is policy intervention. The government can formulate forward-looking policies that create solutions favouring the poor.
An example being zoning. Zoning refers to how the government controls the physical development of land and the kinds of uses to which each individual property may be put. This controls the demand and the price of land in that given area.
Taking away demand makes land less given to speculation and house prices in that given area cannot go beyond a certain level. County governments should also decide that in each zoned area, only houses going for a given price can be constructed. Zoning has worked in Canada, Australia and the United Kingdom.
Another policy intervention is subsidy. Subsidising decreases the price of houses in the value chain. Research has shown that the cost of subsidising housing is higher than the cost of not doing so. This is because housing is a basic need and contributes to human development and increases the Gross Domestic Product.
Additionally, the government can “incentivise” affordable housing through tax rebates. This encourages investors as well as developers to do more large-scale affordable housing projects. For example, The Low-Income Housing Tax Credit (LIHTC), a programme designed in the 80s, is the most important resource used in developing affordable housing in the United States today.
The programme has created 43,092 projects and 2.78 million housing units between 1987 and 2014. This project accounts for over 90 per cent of all affordable housing in the US.
Kenya and Africa at large should follow these steps and create an affordable housing market. We only need political will to take the first step.
I laud the individuals and organisations already taking the initiative. A classic example is the recently launched 5,000 for 5,000 Homes Competition by Shelter Afrique that seeks to spur designs which will cost no more than $5,000 (Sh500,000).
Shelter Afrique will develop 5,000 units using this design in different markets across Africa. This is just one organisation; let all policy makers and stakeholders stand up and implement housing programmes for low-income earners.
— The writer is the director of project management at Shelter Afrique.
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