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Why village landlords remain poor despite big investments

High-rise buildings towering against rural old-town houses in Mombasa County. May 2019. [Maarufu Mohamed, Standard] 

Landlords in some of Kenya’s far-flung towns may have expected to more than double their earnings from house rents when infrastructure transformed their areas.

However, it has proven a hard undertaking. In many rural places, despite new power connections and better road networks, the rents remain relatively unchanged.

In others, initial rent hikes were quickly reversed following protests which included tenants vacating.

Joshua Mwangi, a tenant at a shop in a village in Kieni, Nyeri County, says that many people in rural areas are low-income earners.

Any effort to charge them an amount that will have them living beyond their means is met with resistance, including boycotting of one’s rental units.

“Most of the people just want space where they can rest their heads in the evening. They are not looking for any kind of sophistication,” he says.

“There is always an alternative place to settle and avoid a landlord whose charges seem exorbitant.” As such, the rents charged remain generally the same in spite of infrastructural development.

In his village, Mwangi says that rental houses built with timber are rented for as low as Sh500 a month, which is the same rate as before the village was connected to the national power grid.

Most of the houses are made of timber walls, others roofing sheets.

People doing daily farmhand duties in this village in Kieni earn around Sh250 a day and such jobs are not certain.

With the soaring cost of living, their day to day expenses leave them with negligible disposable income in such a way that a rent of anything above Sh500 may feel burdensome, adds Njuguna, a caretaker who did not speak on authority as the landlord was not aware of his conversation with us.

Many of these tenants do not even use the power installed in their houses, mainly because they find it expensive and also because they have little to do with it.

They still use oil lamps to light their houses or very little power for the same.

An aerial view of Nyeri Town. [Kibata Kihu, Standard]

The World Bank noted that in 2018, over one billion people, mostly in Sub-Saharan Africa and South Asia, lived their daily lives without electricity.

“The number of people gaining access to electricity has been accelerating since 2010 to around 118 million each year, but these efforts will need to accelerate if the world is going to meet Sustainable Development Goal seven of ensuring access to affordable, reliable, sustainable and modern energy for all by 2030,” said the World Bank in a report.

Mr Mwangi also says the tenants’ relationship with their landlord is often symbiotic. In a village setting where social networks remain strong and trust controls most of the relationships, the tenants also act as security to the landlords’ property, he adds.

“As a landlord, you are safe when these people, who you trust, are on your property. You are a large family and nothing will go wrong because they have your back.”

Such tenants, a majority of whom are casual labourers, are also called upon to assist in the landlord’s farm, or whatever other business, Njuguna adds.

“When we have huge tasks on the farm, we don’t have to go out looking for people to come and help us. It would be a struggle to do that. We have our army here and they are ready whenever we call upon them,” he says.

If the landlord is not in a position to immediately pay the labourers, his tenants, have no problem. He will charge them less for the rent end of the month deducting what they are owed.

Rental spaces in such places have thus very much remained the same as they were way before infrastructural development in the neighbourhood - same rents, same levels of occupancies in many of them.

Another contributing factor to the stagnant rents is the fact that many of those houses are low quality and are built as temporary shelters.

They exist in plenty, giving tenants endless alternatives.

Landlords who have improved their houses by making the structures more appealing have increased rents, albeit marginally, with takers still few. Some have had to revert to the original levels.

In some areas, the argument is that the betterment of infrastructure did not necessarily improve living conditions as people still wallow in poverty despite tarmac roads cutting through their villages.

These include areas hurt by banditry, semi-arid areas and those places where there is no usage for huge amounts of electricity. These include areas where there are no industries or large institutions.

While land economists have decried the exaggerated prices of land in Nairobi and other cities, and unrealistically high rents, with speculation rife as the government embarks on projects for the Big Four Agenda alongside several mega projects, rural areas remain relatively quiet.

Developers in the urban areas are competing to give buyers and tenants the most attractive units for the highest prices. On the other hand, their counterparts in the rural areas are often giving the bare minimum.

House model and key. [iStockphoto]

In many instances, it is what the tenants ask for. It is what they can afford and is willing to pay for.

Zipporah Wanjiru, a tenant in one of the houses in a village in Nyeri, says she feared she was going to struggle with rent when the landlord connected the houses to power and was preparing an exit.

But after months of assessing, the landlord decided it was not going to work.

In houses where rents were hiked, tenants moved out en masse. They sought cheaper alternatives.

“It felt like a loss,” says Njuguna. “Some landlords built stone houses now that we had tarmac and electricity. Our landlord here even constructed rooms that could be used as shops and hotels.”

Some of these houses remain idle. Pushed out by waning businesses, several shopkeepers have closed shop and, even assured they can pay the same amount, are unable to return.

And so, villages remain as quiet as ever, the government’s Last-Mile Power Connectivity programme notwithstanding. The houses are unoccupied, tarmac barely used and power idle.

And landlords continue to charge small monies, disenchanted with roads and power lines they cannot take advantage of.