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With affordable housing projects, what next for Nairobi landlords?

By Harold Ayodo | January 29th 2021

Nairobi is currently under construction, literally, with high-rise residential buildings being erected nearly all over the capital city. Much as the buildings will meet the ever-rising demand for residential housing in Nairobi, investors in the sub sector may be forced to reduce their rents to either attract new or retain their current tenants.

Dennis, Kilimani

A drive along Ngong Road from the City Mortuary round about to Dagoretti Corner easily explains that construction of high-rise buildings in Nairobi has shifted to top gear.

I occasionally drive along Kindaruma Road off Ngong Road on my way to and from work – the number of Chinese built skyscraper residential buildings that I see are mind boggling.

The cost of selling or renting those apartments will surely go down as with the traditional property prices in the area – against the backdrop of the harsh economic times over the corona pandemic, the houses may be empty for long.

There are already grumbles from a section of landlords in the capital city that the influx of residential houses constructed by foreign constructors would eat deep into their pockets.

One man’s meat is another man’s poison as the other elephant in the room is the construction of affordable houses by the General Mohamed Badi led Nairobi Metropolitan Services (NMS).

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General Badi, who is the NMS Director General, recently announced plans to construct affordable houses in Eastlands and Woodley estate, which may have excited tenants but depressed landlords in the areas.

According to an advertisement in a section of the mainstream print media, the NMS Affordable Housing Project (AHP) houses are to be constructed in Bahati, Maringo, Jericho, Lumumba, Bondeni, Ziwani, Embakasi, California, Kariobangi North and Woodley.

The NMS had recently completed the first phase of its earlier housing project in Ngara and Pangani where the units were either rented or sold between one and three million shillings.

The State raised Sh536.5 million in deposits from the sale of its 1,370 low-cost one, two and three bedroomed houses in Park Road.

The Park Road project in Ngara whose construction started in April 2019 was the first low-cost housing development to be completed by the national government under the Big Four’s 500,000-unit Affordable Housing Programme.

The NMS AHP is part of President Uhuru Kenyatta’s Big Four Agenda that seeks to cater for shelter. NMS has invited Expression of Interest from development partners in banking, pension funds and schemes, real estate developers and other investors to help achieve the plan.

As debate rages over the supply of houses in the capital city, some private developers are accusing a section of foreign developers of allegedly constructing – at relative speed - skyscrapers under relatively frugal budgets in high-end areas.

There are also some accusing fingers pointed at the National Construction Authority (NCA), which provides licenses and inspects constructions countrywide, for allegedly failing to regulate the industry.

- Harold Ayodo is an Advocate of the High Court of Kenya

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