Cost of land hits 470mln an acre, locking out many Kenyans from home ownership

Kenyans spend close to 47% of their incomes on housing and housing utilities, according to the Reviewed National Housing Policy Committee of November 2015, of which comes from a median income level of employed people in Kenya of 20,000-25,000. This means that over 60% of Kenyans opt for informal housing in Kenya. This is the predicament that the World Bank and the County Governments have partnered to unlock through Private Public Partnerships.

According to Oumar Seydi the Regional Director, East and Central Africa at the World Bank Group, Kenyan urban centers have a backlog of housing since many developers have opted to develop property for those who can afford.

“Kenya urban centers have a backlog of 2 million units. Every year over 24000 are needed with just 50 thousand units being constructed. Most are built for the middle and upper (income earners) while low (earners) need solutions most urgently are left with very few options.” added Seydi

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The number of people living in an urban center is set to double by 2050. The partnership between the County Government and the World Bank focuses on the construction of affordable housing, to suppress the growth of the number of people living in slums from the current 1 million to 2 million by 2030.

Land prices have risen to heights of Ksh470 million for an acre of land in Nairobi, high cost of building material as swell as middle men costs has driven prices even higher. Soaring population numbers as well as growth of urban areas has also overshadowed land availability.

“… An estimated urban growth rate of an average of 3% per annum between 2000 and 2030 while the urban population grows by 65% by 2030 increasing the demand for housing… we have several factors that impeded the availability of land; The lack of land, lack of proper titles and high cost of land and a complex registration process…” said Mariamu el Maawy of the State Development of Lands.

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The State Development of Housing and Urban Development is pushing for social rental housing as a way to encourage developers to meet the soaring demand for low-end houses.  “The government in the reviewed housing policy advocates for social rental housing, which is supported by the national housing survey of 2012/2013 which put urban renters at 70.45% this illustrates that the rental housing development needs focus, if the issue will be addressed in the lower income segments.” Principal Secretary, Aidah Munano.

The private public partnership is also looking to improve access to finance such as linking subsidies to savings and providing dedicated lines of credit and improved funding from government and private sector for low income earners to afford home ownership, according to the office of the National Treasury, while also urging foreign direct investors to set sights on low end housing development to meet the demand.

By: Humphrey Ngugi   H_NGUGI

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