Chinese housing firms in Kenya must strike a balance

Chinese firms that have ventured into real estate development in Kenya formed an association in a move that holds the potential to spur economic growth, job creation and infrastructure improvement while facilitating technology transfer.

With their experience in a country that is home to close to a billion inhabitants, the launch of the association is expected to enhance property development and is anticipated to address the needs of the sector, ensuring properties are well-planned, organised, and cost-effective.

Establishing the Chinese Property Developers Association in Nairobi has, however, not only stirred conversation within the industry but has also prompted criticism including from competitors and activists terming the move suspect.

The association, led by Zhang Jiaping, says it aims to enhance property development, positioning itself as a bridge to serve society.

But doubts have been cast on the association’s objectives with critics saying Nairobi may face the risk of being auctioned off to the highest bidder.

Largely, it is the allegations of impropriety and disregard for ethics and laws by some of the members of the association which has intensified apprehensions.

Others say that it may turn the city into a concrete jungle of high-rise buildings, potentially compromising its future while enriching only the Chinese shareholders and their Kenyan associates.

These concerns are valid and follow past instances of impunity by some developers and the use of aggressive tactics, including involving law enforcement officers when environmental concerns are raised.

Critics accuse some Chinese developers of sidestepping laws and exploiting “grey areas” in zoning regulations, environmental codes, and constitutionally enshrined public participation requirements.

The worry is that the association might operate discreetly, facilitated by architects and contractors engaging in questionable practices.

The skeptics now view the association as an enhanced platform that could empower further such acts, raising questions about its role in regulating the industry, even as Kenya has national developers’ associations offering similar services.

Engaging with local communities, respecting local laws, promoting sustainable development and maintaining transparency will be key in fostering positive relationships between Chinese firms and Kenya.

The world over, successful ventures in this sector require international cooperation and adherence to best practices. Given Nairobi’s rapid growth with limited consideration for stringent environmental plans, such negligence could have severe consequences, especially with planned large-scale real estate development projects bringing forth environmental challenges.

Additionally, there is a risk of economic dependency if the local economy becomes overly reliant on foreign real estate developers, particularly if it becomes heavily skewed towards a specific nation.

Largely, such dependency can pose risks if the development is unsustainable or if there are abrupt changes in the global economic landscape, that can hurt Kenya significantly.

To address these challenges and promote responsible investment practices, Chinese real estate developers must prioritize responsible governance, transparency and ethical business practices.

These measures are indispensable in addressing concerns and will go a long way toward establishing mutually beneficial partnerships.

Much as these varied concerns may be valid, however, it is essential to recognise that not all Chinese investments pose these challenges.

Many Chinese businesses operate responsibly and contribute positively to the economy and areas where they invest.

It will take the Chinese Property Developers Association, local authorities and community stakeholders working closely together to pave the way for sustainable and mutually beneficial development in Nairobi.

As the association establishes itself, it is crucial to work towards positive change, striking a careful balance between growth and responsibility and by addressing environmental, economic, and ethical considerations.

Chinese developers can play a vital role in contributing to Nairobi’s development while respecting the city’s unique character and needs.

—The writer is the Business Editor, People Daily