Land lease caps to address ownership and use

Twin proposals by the draft constitution of capping land leases at 99 years and the establishment of a housing development fund to finance affordable houses will hasten the capacity of the two sectors to create national wealth, analysts have said.

The devolvement of housing in Kenya has been hampered by poor policies, starving the economy of estimated trillions of shillings and thousands of jobs possible through a vibrant property development industry.

Unlock potential

Better land utilisation is equally held back by poor laws that have seen millions of arable land that is owned by speculators remain idle.

Economists say unlocking the potential of land through equitable distribution and maximised utilisation could see Kenya end its perennial food shortages and improve rural livelihoods.

The twin issues of land and housing are some of the most emotive in the country, with conflicts surrounding land ownership flaring into inter-ethnic clashes, a factor that has led to high risk profiling of Kenya’s political and economic situation.

“The 99-year cap is a good idea that means land will always belong to the State. More people can the have access to it and utilise it,” said Charles Otieno, Public Policy and Governance expert at the Centre for Governance and Development.

The draft constitution proposes that six months after the draft becomes law “any interest in land larger than a ninety-nine year lease, by whoever granted, held by a non-citizen shall be converted to a ninety-nine year lease, unless otherwise revoked.”

The draft proposes that foreigners with freehold interest in any land in Kenya will automatically forfeit that right to the Republic of Kenya to hold on behalf of the people of Kenya.

Such as person will be given a 99-year lease at a peppercorn rent (or symbolical low price)

The development is a major shift from the policy adopted earlier this century by the colonialists that gave huge chunks of productive lands to foreigners then under the 999 year leases.

This meant that the land would only revert to the government, which holds the land in trust for its citizens, after one millennium or after tens of social generations.

The 999-years lease has created land barons and absentee landlords especially in parts of central Rift Valley, Coast and Central provinces.

The land has been idle, or undeveloped while millions of Kenyans live within it or out as squatters.

The economic cost of underutilisation of arable land in Kenya is yet to be quantified but the focus has been on the agitation of high land tax for land that is in individual hands but is not being put in the economic use.

This concept is expected to be implemented through a sessional paper on land in Kenya that has been published by the government and will be gazetted later this month.

“What the paper seeks to do is to regulate holding of land to encourage usage of held land otherwise owners will pay high taxes,” said Odenda Lumumba, the national coordinator of the Kenya Land Alliance.

Land economists said the proposal is “one of the clearest ways forward” to addressing land ownership and usage in Kenya.

“What Kenya has done is just to conform to the international trends that limit land leases to 99 years and reversing the old mistakes. It ensures foreigners do not own land for more than 99 years unless that land is used for the good of the people,” said Mr Lumumba.

Urban areas

The draft provides that until communities are identified and their title is registered, community land shall be held by the National Lands Commission on behalf of the communities.

The draft constitution has also proposed the establishment of a housing development fund to enable Kenyans gain access to more and better housing.

The draft has promised “development and review” of a national housing policy with a view to increasing, regulating and maintaining the national housing stock.

Housing especially in the urban areas is a major problem because of the lack of adequate supply of housing units which has raised prices beyond the reach of the middle income earners, who apparently are in the critical need of houses.

Kenya is estimated to have housing supply shortage of 150,000 units every year, says the Kenya National Bureau of Statistics.