Nairobi,KENYA:Despite the government having taken measures to offer affordable and decent housing to its citizenry, more needs to be done to cushion the shortage of housing units in Kenya.
According to a World Bank Report Kenya Economic Update: Housing—Unavailable and Un-affordable, the country is in dire need of 2 million low-income homes to boost its economic growth.
“The need for additional decent homes at affordable costs remains acute. The perennial question is why so few houses are built each year relative to the potential demand. Another significant gap is why mortgage finance is not a significant instrument during purchasing of houses,” remarked Central Bank of Kenya, CBK, Governor, Dr. Patrick Njoroge.
He raised the alarm stating that there are less than 20,000 mortgages borrowed for a population of 45 million Kenyans.
Dr. Njoroge however acknowledged that the mortgage finance market had more than tripled since 2010.
“ Looking at the historical discussions concerning housing markets in Kenya the long standing issue has been the high cost of credit, which has been blamed for all these problems. But I ask, is this an alibi that hides more fundamental causes. There may be other reasons that cause these difficulties,” the CBK Governor noted.
“There may be also something going on behind the scenes. The freezing of the land registries to digitize titles was a good idea but during that period of time lending for real estate collapsed,” he continued.
Dr. Njoroge added that the housing menace in the country is very serious to the extent that only a tenth of the urban households can afford the cheapest new house.
According to Mehnaz Safavian, Lead Financial Sector Specialist and co-author of the World Bank report, “Kenya has the ability to make housing more affordable to many more Kenyans, and in turn create new channels to boost overall economic growth both at the national and county levels.”
The report suggests narrowing the affordability gap in the housing market and improved financing for both developers and users would support the housing multiplier effect as every shilling spent directly on a housing unit results in various indirect benefits to the country.
Exploring financing solutions that can play a catalytic role in stimulating the supply and demand of affordable housing while creating a momentum for other underlying reforms has also been deemed as another solution provided by the World Bank.
Implementation of the ambitious Kenyan Vision 2030 blue print if implemented accurately would further ensure the provision of 200,000 housing units annually for earners from all income levels.
However, with the production of housing units currently at less than 50,000 units annually, well below the target number, it culminates in a housing deficit of over 2 million units, with nearly 61 per cent of urban households living in slums.
UN Habitat III
During the 3rd United Nations UN Sustainable Housing conference in Quito, Ecuador the Habitat III Secretariat in a statement said, “Urban development is rarely pro-poor, particularly in fast-growing cities in low and lower middle-income countries, and climate change is adversely affecting informal settlements and increasing vulnerabilities. Habitat III seeks to build political commitment to inclusive urbanization and adequate
housing.”
A similar environment is being witnessed in Kenya with the majority of the urban populace being slum dwellers.
During the conference in 2016 efforts for embracing the New Urban Agenda were made to ensure inclusiveness when it came to housing issues as stipulated by Goal 11 of the Sustainable Development Goals SDGs which calls for cities to be safe, resilient and sustainable.
“In the last 15 years we have addressed the issues of urban poverty that is exemplified in form of slums. Despite the fact that we have met way beyond the targets that were set of 100 million slum dwellers, we have the livelihoods of 200 million slum dwellers being improved.Ultimately we have many more people in slums and slum-like conditions than we have had 15 years ago,” remarked Dr. Aisa Kacyira, the Assistant Secretary General, UN Habitat remarked at the Casa de la Ecuatoriana where Habitat III was taking place.
Dr. Kacyira said there was hope however by pushing the New Urban Agenda in a bid to upgrade slums and ensure that by 2030 there is proper access to safe adequate housing and basic services in urban areas.
However, housing inadequacy has been a perennial issue whereby policy documents are signed but impact is not necessarily felt on the lives of slum dwellers.
Kenya’s housing riddle
The housing situation is not appeasing in parts of the world and Kenya as well.
According to the 2012/2013 Kenyan Housing Survey, one of the few housing surveys released in Kenya so far, is that population pressure is taking a toll in urban areas.
Kenya’s population in 1999 stood at 28.7 million with the urban population hitting the 5.4 million mark.
By 2009 the general population had grown to 38.6 million with 12.5 million living in major towns and cities.
With reference to the survey, by 2030 half of Kenyan residents will be urban dwellers as the demand of essential services like housing outstrip the supply.
The survey reveals that, “The median income levels for employed people in this country are between Sh. 20,000 and Sh. 25,000 hence an average income earner cannot access housing from the market.
If one was to buy a house on mortgage of Sh. 1.5 million repayable in 15 years at an interest rate of 15 per cent, the monthly repayment rate would be about Sh. 21,000.”
This amount is way above what the middle income earners can afford based on the international recommendation that one should only spend one third of his gross income on housing.
