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Urithi housing affirms socioeconomic model to deliver in affordable housing on time

REAL ESTATE
By Farrel Ogolla | March 12th 2019

Urithi Housing Cooperative Society projects [photo courtesy Standard]

 

Days after Urithi Housing Society came on the receiving end of investors complaining over the slow pace at which some of the projects were being done, the society now says theirs is a resource pooling approach known as the socio-economic model of housing that ensures completion and delivery of projects within pre-determined timelines.

According to the housing society, the model is entirely dependent on members, whose contributions are key and vital in initiating and executing any project that seeks to provide housing, be it public or private.

Upon payment of a pre-determined deposit or down payment, the balance of the cost is spread out and paid over a period of between 12 and 48 months.

Samuel Maina, the chairman of Urithi Housing Society, now say the society has resorted to adopting this model.

He says this is because monthly subscriptions vary from one member to the other depending on their economic ability.

And with the adoption of this model, investors will be assured of occupying their residence on time.

"For the project timelines to be achieved, we have to factor in the speed of members to make their contributions. However slow remittance by some members has contributed to delays being experienced as most times the society has to move with the speed of the slowest members in payment,” said Maina.

He added that speed is determined by how fast you get money from members. But due to the uncertainty and unpredictable nature of contributions and cash flows, we adjust accordingly."

“The pricing does not change over time "simply because the model mitigates on the cost of labor, land and materials. Hence making it affordable without changing the initial price,” he added.

Being an off-plan project, there are critical steps, approvals and mandatory procedures that must be undertaken. Market sounding is the first of the many steps and acts a notice of the intention to undertake the project. 

Then follows mobilization which entails recruiting members and other stakeholders, which process is followed by the pursuit of statutory and other approvals by various government bodies, both national and county level.

Once the necessary approvals have been granted, the groundbreaking marks the beginning of construction work, whose completion is entirely dependent on members’ fidelity to make subscriptions.

He noted that there are incidents where a member pays their subscriptions in full and expect that they would get their units but the principle here is that member’s pool together to own together.

“The explanation is very simple. While you may have paid yours in full, the model works in such a way that those who pay upfront help kick-start the project and sustain it by making the first commitment which is key to property ownership and the subsequent subscriptions take us through to the tail end,” said Maina.

He says Urithi has over the past six years, completed and handed over thousands of housing units in Springview, Thika, Plainview, Juja, Gem1 in Witeithie and Lanet Homes (Nakuru and Juja).

Maina also assured investors that the society intends to complete and hand over all housing projects currently under construction in the next 12 months.

The projects include Utange - Mombasa, Gem2 and Rongai Homes which are set for completion in the next quarter for handing over to the members, while investors in the Osteen Terrace Gardens will be delivered by the last quarter of 2019.

"The OTG project is the first-of-its-kind to enable us to achieve affordable housing for our members and we are using the socio-economic model. This particular project [OTG] is very timely and it will hugely compliment the government’s efforts in attaining the big 4 agenda – the housing component, by engaging other stakeholders like us,” added Samwel.

Since President Uhuru Kenyatta unveiled his Big Four Agenda during his inauguration to serve his second term in office.

Different sectors anchored in his legacy have been making all necessary alignments to fit into the presidential vision which can only be achieved through collaboration between public and private sector players.

One of the pillars of President Kenyatta’s legacy is affordable housing, with a target of 500,000 new housing units per year.

President Kenyatta’s Big Four Agenda also lays emphasis on expanding the manufacturing sector, Universal Health Care and Food security.

Under the affordable housing pillar, the government through the National Housing Corporation and collaboration with private sector players intends to construct 500,000 units annually by using innovative construction methods and low-cost building and construction materials.

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