Back in 2017, then-President Uhuru Kenyatta unveiled the ambitious “Big Four Agenda”. Affordable housing was a core pillar. The goal was clear: to construct 500,000 new affordable homes by 2022. This noble effort has proven to be clunky, opaque, and, eventually, unattainable.
In the face of the latest government efforts to attain this goal, let’s examine some of the real issues at play, and how private sector involvement performs a significant role.
What the government has been up to:
- The Affordable Housing Fund (AHF) has been established to provide affordable loans, making homeownership more accessible for ordinary Kenyans.
- Instituting Public-Private Partnerships (PPPs), collaborations between the government and private developers has led to the construction of housing units, especially in Nairobi, albeit in an unwieldy and suspiciously dagger-and-cloak manner. These partnerships leverage the government’s resources and the private sector’s expertise.
- Tax Incentives for developers engaged in affordable housing projects, including reduced corporate taxes and VAT exemptions on construction materials.
- Infrastructure Enhancements, such as in roads, water supply, and electricity supply, have been made in less developed areas to attract affordable housing projects.
Challenges in Realising Affordable Housing
However, the journey towards affordable housing has faced various curve balls that include:
- Financial Constraints: Securing sufficient funding for affordable housing projects remains a significant challenge. The Affordable Housing Fund struggles to meet even the legitimate high demand for housing loans.
- Land Scarcity: Land in Kenya is inordinately expensive and ostensibly limited. Land speculation and illegal land grabs have further complicated this issue.
- Bureaucratic Delays: Cumbersome approval processes, bureaucracy, and corruption have caused significant delays in housing projects.
- Economic Setbacks: Economic downturns, like that caused by the COVID-19 pandemic, have reduced access to affordable housing, with many Kenyans facing job losses and reduced incomes.
- Inequality Challenges: Access to affordable housing opportunities remains unequal, particularly for low-income earners.
A Glimmer of Hope
Despite these challenges, there’s reason for optimism due to:
- Increased Funding: Strenuous efforts are underway to secure additional funding from, among others, development partners and latent local sources to ensure more Kenyans can access affordable homeownership loans.
- Innovative Construction: Modern construction methods, such as prefab and green building technologies, have the potential to lower costs and accelerate affordable housing projects.
- Streamlined Approvals: The government is actively working to reduce red tape and digitize the approval process for construction permits.
- Private Sector Solutions: The private sector is driving initiatives in innovative financing, construction, and policy changes, such as quotas for affordable housing units in mixed-income developments.
Kenya’s pursuit of affordable housing is a significant endeavor aimed at aiding more citizens to realize the elusive dream of home ownership. Challenges persist, yet indications are that Kenya is grudgingly heading in the right direction. Strengthening the partnership between the government and resolute private sector players, can bring affordable housing closer for a broader segment of the population.