Markets & Finance
Developers eye prime city land for affordable housesThursday September 15 2022
Property developers are eyeing partnerships with the new city administration to access prime land near the central business district (CBD) for affordable housing units.
Housing and settlement are one of the core pledges by the government to curb the large deficit of suitable shelter for low-income earners.
Prime land close to the city centre is largely in the hands of the government and developers reckon it would be perfect for new residential houses.
“The National and County Governments, together with parastatals and other quasi-government institutions are also the largest land bankers in locations near the city centre that are ideal for affordable housing development,” said Samuel Kariuki, chief executive of Mi Vida Homes.
“We see this as an opportunity to partner with credible institutional developers in the production of affordable housing as suitable land remains a key cost hindrance in this important agenda.”
According to the Center for Affordable Housing, Kenya has an accumulated housing deficit of two million housing units, growing by 200,000 units annually. This is mainly due to the difference between the demand for 250,000 housing units and an estimated supply of 50,000 units every year.
This has resulted in more than 60 percent of urban Kenyans living in slums and other low-quality housing without adequate sanitation.
President William Ruto’s manifesto pledged building 250,000 units annually through a public-private partnership that the developers are keen on. He promised to grow the number of mortgage accounts from less than 30,000 to one million by enabling low-cost deals and establishing an affordable long-term housing finance scheme.
Uhuru Kenyatta's Jubilee administration had also established a keen interest in affordable housing as one of the key pillars of its Big Four Agenda.
The government had targeted to set up 500,000 new affordable units between 2018 and this year, through both public and private sector endeavours, but fell short of target because of, among other things, the high cost of land and slow rollout of projects by the private sector. The government managed to build units in Ngara, Parklands, and Pangani among other areas near the city centre.
More than 186,000 housing units had been registered for construction across the country by the National Construction Authority under the Affordable Housing programme of the last administration.
This is, however, still not enough to meet the demand, given that more than 350,000 Kenyans are registered under the Boma Yangu online platform, which is being used to facilitate the purchase of the cheaper houses.
Location is a primary determining factor for most homeowners and property developers, especially with the prime properties in or close to the city centre consistently outperforming those further from the central business district in terms of price.