Towards attaining affordable housing for all
By Antony Okonji
A housing organisation called Habitat for Humanity estimates that the housing deficit in Kenya stands at two million and continues to grow at a rate of about 200,000 units annually.
This in turn leads to a proliferation of informal settlements in urban areas, with 61 per cent of the urban population living in slums, characterised by overcrowded homes.
A report by the organisation further states that families are at high risk of contracting diseases such as respiratory infections, jigger infestation and malaria. Women, children, persons living with disabilities, the elderly, and orphans, are the most affected by the poor living conditions.
This is an indicator for the need for increased and improved housing for the growing population in both urban and rural areas.
Although much of the projections focus on urban areas, the devolved system of governance has altered housing demand and supply. An increasing number of people are remaining in rural areas because of potential for employment opportunities in counties.
While counties have been roped into the National government’s Big Four agenda’s fourth pillar of providing affordable housing, there is a risk that lack of effective coordination and lack of technical competence at the local level can stifle the provision of housing.
In addition to limited access to land and insufficient income, lack of affordable housing, finance is another limiting factor for low-income families to improve their housing conditions.
But counties are working to achieve housing, especially for their employees in a scheme that can regenerate money to sustainably provide housing for all.
The government is fully behind the scheme and although it has been struggling with implementation, the intention is very clear – house all workers and provide affordable housing to anyone that may need it.
To this end, the World Bank approved a $250 million (about Sh25 billion)International Bank for Reconstruction and Development (IBRD) loan to enhance access to affordable housing finance for Kenyans who are unable to access long-term housing finance.
The Kenya Affordable Housing Finance Project (KAHFP) will support the establishment and operationalisation of the Kenya Mortgage Refinance Corporation (KMRC) to drive affordability of mortgages by providing more long-term funding to financial institutions, an incentive to enable them to offer long tenure loans to home buyers.
But the World Bank acknowledges that commercial banks in Kenya hold only about 26,000 mortgage loans. The interest rate cap of 2016 coupled with an overall Non-Performing Loan ratio of 12 per cent led banks to tighten their credit standards and offer variable rate loans, locking out middle to low income would-be home owners.
Despite government intentions and interest in universal affordable housing, the deficit is far from being reached. This opens opportunities for private housing development companies and who can take advantage of satellite cities to provide housing for most of the urban workers who reside in the suburbs of main towns.
Their interest in towns is largely access to jobs, social amenities, schools, entertainment, public services and opportunities for career, life and cultural advancement. Private development companies have an opening in providing all these amenities. The success of such cities will be based on their ability to provide everything that a city can offer.
But perhaps the greatest challenge for urban development is the proliferation of slums and informal settlements. While the satellite cities and peri-urban centres may provide adequate infrastructure, sanitation and social amenities, low-income may not afford them.
But rather than viewing this as a challenge, private developers can see it as an opportunity to surround itself with proper and maintained housing for all its workers vide a staff housing policy. In essence, it is a policy to control infrastructure, affordability, sanitation, maintenance and standards for including for social amenities such as malls, sports arenas, pools, hospitals and schools, especially for early childhood education.
—The writer is a media and communications specialist
