Homes developer finds way to fulfil dreams of poor

Houses for sale long Thika road in Nairobi. Mr Keshavjee is planning to make cheap homes for low-income earners. File
Houses for sale along Thika road in Nairobi. Mr Keshavjee is planning to make cheap homes for low-income earners. File 

Growing up in a backdrop of a family business — White Rose dry-cleaners — Irfan Keshavjee honed his entrepreneural skills early.

But in 2000, he saw a success path in social entrepreneurship when he co-founded Honey Care Africa, a company that manufactures Langstroth beehives, nurtures farmers in beekeeping and guarantees to buy their honey at fair prices. Mr Keshavjee says to date, the firm has lifted over 10,000 smallholder bee keepers out of poverty as they now have a source of income. 

Philanthropy is what gives meaning to his life, he says.

His latest social venture is Karibu Homes, which aims to give low-income earners affordable housing. As Kenya’s population grows and cities like Nairobi become crowded, the high demand for housing has pushed up the prices of houses beyond the reach of many Kenyans. Those bearing the brunt are low-income earners who have been pushed to slums.

“Our objective is to enable home ownership for families as far down the income ladder as possible as well as be commercially viable. It should be a stepping stone out of the slum.

Looking at Nairobi today, the hope of owning a home is beyond most residents. Only the top 10 per cent of people living in Nairobi can afford to buy a home. What we are doing is driving that hope for home ownership further down to the very poorest,” says Mr Keshavjee.

By 2030, Nairobi’s population is expected to reach 14 million. Housing is a challenge and property developers are not building homes below Sh3 million as they seek higher returns.

This means that those earning Sh30,000 to Sh80,000 cannot afford to buy or rent these homes. An average home in Nairobi’s upmarket suburbs such as Lavington and Spring Valley now costs Sh21.3 million and attracts a monthly rent of Sh94,549, according to latest HassConsult reports. Many Kenyans have opted to live at the edge of the slums which drives up the rents within the slums. This in turn puts pressure on the people who need the slums to live and survive. Life is getting increasingly fragile.

This is the face that Mr Keshavjee wants to change. At a cost of between Sh950,000 and Sh3 million, an initial down payment of Sh180,000 and a monthly payment of Sh9,000 for 20 years, a family can fulfil its dream of home-ownership.

“A household with income of between Sh20,000 and Sh40,000 per month would be able afford the cheapest bungalow,” Mr Keshavjee says.
The Karibu Homes concept was carefully thought out. In 2009, Mr Keshavjee said he wanted to do something different in the property market—using the discipline and efficiency of the private sector to drive a social goal. He started with research to see how he and others can provide affordable housing for low-income families in Kenya.

“We spent six months looking around Kibera, Mathare, Kawangware, Kangemi and Mukuru slums. Looking at the state of people’s lives, rents paid, structures... After how many months of not paying rent one is evicted,” he says.

For the Karibu Homes proprietors, affordability of the homes, income ranges of the buyers, their form of employment, how predictable their salaries are and if a bank can give such people a mortgage, were some of the important factors that guided the project. They hope to build 1,000 homes in the first phase.

“You do not want to give the low income buyers a mortgage to be a burden. It should be an opportunity to get out of poverty not to make them sink deeper into it. One has to be careful with that especially in social enterprises,” he says.

Karibu Homes is approaching land owners who have over 20 acres in Kitengela, Mombasa Road, Juja, Kiserian or Thika to build the 1,000 Karibu Homes. “To build Karibu Homes, I need investors and partners to understand that my business in not solely profit motivated,” he says. 

Initially, he wanted to build for the very bottom of the pyramid.  But found that the only way to really make a difference is to build a commercially sustainable, and hence scalable, model.  By building for families just above the very bottom of the pyramid. There is a huge market gap, the demand for housing is 150,000 a year while the supply is 35,000. Building 1,000 homes is not going to dent the demand especially for the low-income housing. We need to build 10,000 a year at the minimum, he says.

Bungalows will cost slightly lower and the apartments will be priced slight higher. The housing communities will have commercial centres and that can provide employment. It will also have nursery schools, civic centre, health centre, police post and a central park which can also be a marketplace.

The challenge Karibu Homes faces is increasing costs of building. Construction costs have risen, further depressing returns for investors in residential property. Makers of cement, corrugated sheets, paints and steel products have seen prices of raw materials rise because of a surge in commodity prices brought home by the weakening shilling against the dollar.

However, Mr Keshavjee says they will build using traditional technology of brick and mortar which is expected to be slightly cheaper.
He is banking on support of others to give hope to the millions of Kenyan seeking to live in their own homes. “When doing something new and cutting edge, people will often discourage you. Finding people who have done it and are giving you support. Even if it is one credible person, that is all you need. Locally, the KCB Foundation has been extremely supportive in this way, and also the Edward de Rothchilds Foundation,” he says.

So, what about giving the homes as charity?

“Making social change through charity might not bring sustainability,” he says.

Karibu Homes is offering charity bonds, where a charity organisation can invest in the project and will get its funds back after the project is done and Kenyans buy them.

For Mr Keshavjee, making a difference in someone’s life is what matters most.

“Making money alone gives no meaning in life. I want to give my life a meaning and social enterprise is a vehicle that can help me to achieve that, “ he says.