Housing deals fall Sh69bn on City Hall permits hitch

What you need to know:

Data released by the Architectural Association of Kenya (AAK) Tuesday showed that the value dropped to Sh141.27 billion last year.
The drop represents a 32.8 percent drop from the Sh210 billion reported for 2018 by the Kenya National Bureau of Statics (KNBS).

The permit issuance hitch at City Hall has hit property developers as the value of approved housing projects shrunk by Sh69 billion in the 12 months to December.

Data released by the Architectural Association of Kenya (AAK) Tuesday showed that the value dropped to Sh141.27 billion last year.

The drop represents a 32.8 percent drop from the Sh210 billion reported for 2018 by the Kenya National Bureau of Statics (KNBS).

“The delay in the processing of construction permits by the Nairobi City County Government negatively affects all persons in the construction value chain by prolonging project implementation timelines,” the architects said.

Speaking during the launch of buildhub website in Nairobi, AAK President Mugure Njendu blamed delays on the suspension of City Hall’s technical planning committee and e-permit downtime in the second half of 2019.

Mrs Njeru said: “Despites strides taken by county governments in making development control information accessible, undertaking construction projects in Kenya is still marred by unclear government approval processes, which discourage investments”.

The new website will, among other things, provide developers with key information in approval stages, turnaround time, required documentation and charges per county.

The AAA report shows that that the total permitting fees collected dropped from Sh333.1 million to Sh102.9 million during the review period.

Similarly, the number of approved development applications dropped from 955 in the first quarter of 2019 to 613 in the second quarter 2019,” the report reads.

Housing Permanent Secretary Charles Hinga also criticised the county government for the delay saying it was piling costs on developers and buyers.

“It adds an extra 15 percent cost to the development budget that is ultimately passed to buyers (citizens),” said Mr Hinga.

According to the report, residential units (71.56 percent) lead with the highest number of approvals issued followed by public (13.74 percent), industrial (5.21 percent), commercial (5.69 percent) and mixed use houses (2.3 percent).

December saw the highest number of approvals at 263 while November had 146 projects.

“Even in July 2019, there was a backlog of hundreds of development applications that had not been reviewed though they had been submitted earlier,” the report reads.