In most other nations, authorities are obliged to give years of notice of their intention to build, and valuations are transparent and frequently formulaic.
But in Kenya, we have gone another path, with legislation that sees the governments’ valuers set a price, seemingly at will, prior to the announcement of any project, and as the definitive amount that will be paid for the land purchase.
Each morning as I drive to work, I cross a construction site for a new bypass. I’m told it may be completed by August, and it will certainly speed our journey times.
But morning after morning, I stare at that now deep score through our rolling hillsides, and wonder about the homes and families that used to live there, in beautiful houses, now demolished, on grounds now turned to underpasses and bitumen.
Compulsory purchase is built into almost every nation’s law, as the right for governments to buy lands for ‘social’ good. Social gain includes getting us all out of daily traffic jams, and allowing us to nip across town at speed. But who would want lives ruined, to get a slightly quicker journey?
Which makes the way in which the price is determined for compulsorily purchased land a matter of social equity and decency. Yet, for government’s negotiating expensive, and sometimes mega expensive, construction deals, adding a hefty price tag for land buying can be an onerous burden.
Indeed, Kenya is rich with stories of pipelines built over other lands (Tanzania), because the land buying in Kenya would have proven too costly.
So grave does our government count the problem of ‘speculation’, in fact, that our laws have been amended to stop this terrible taxpayer fleecing, and end negotiation on land prices for land bought compulsorily.
However, as in so many cases where ‘speculators’ are presented as our enemy, the resulting laws are harsh indeed on private land owners. I even wonder, sometimes, if ‘speculators’ are for-hire guys that you get in so as you can hurt everyone, saying you are moving to stop just them.
In most other nations, authorities are obliged to give years of notice of their intention to build, and valuations are transparent and frequently formulaic. But in Kenya, we have gone another path, with legislation that sees the governments’ valuers set a price, seemingly at will, prior to the announcement of any project, and as the definitive amount that will be paid for the land purchase.
Those valuers are government employees, not independent parties, and lower land prices keeps the government spend down – is anyone spotting any structural issue there?
Moreover, the case for the pre-announcement pricing is that it prevents buyers (speculators) acquiring land in order to gain a later price bonus.
However, as with so many poorly justified moves to draconian legislation, the current methodology brings with it enormous and unnecessary consequences in messing up a lot of lives, to find a solution to a perceived risk that could easily be resolved another way.
As things stand, the price first, announcement second, is a piece of trauma and personal crisis that Hollywood could surely do justice to: the letter that arrives through the door, as the first a young family ever knows of the matter, announcing their home is being compulsorily bought at X price.
Perish the thought that their mortgage was for more, and that single missive has delivered a conversion in their entire lives from land and a home and a mortgage, to no home and a debt that will take years to clear.
The case for project secrecy pre-pricing is surely a poor one. But if it has to be government-set pricing, it should, at least, be notably and transparently generous in market terms to cover for the considerable disruption costs too.
If it is, somehow, the fear of speculators that prevents that, it can hardly beyond the wit of man to establish all the transactions made in, say, the last two years, or even five years, and flat cap the purchase price at the amount paid for the land, plus inflation.
With that cap in place, where’s the ‘speculation’ gain? ‘Hey speculator, you can earn inflation adjustment if you buy just here!’
They are not going to come. Or, our legislation could demand five years’ residence, or even 10, to qualify for ‘displacement’ costs, and verified market pricing referenced to other land that is not about to be bulldozed for a road or railway.
Instead, we create a new wagon load, train load, even town-population equivalent, each year, of genuine ‘victims’.
But tough luck guys – we play rough here.
PAYE Tax Calculator
Note: The results are not exact but very close to the actual.
