The National Housing Corporation is driving towards private partnership arrangements to boost its supply of housing units in the country.
The state agency says the partnerships will enable it to compete favourably in provision of low cost housing, which has remained its top agenda.
There is an estimated deficit of 120,000 houses in Kenya annually, with urban centres hard hit.
Already, the corporation has secured a deal with a private company, Sahal Ltd, to develop housing units worth Sh12 billion in Mlolongo, Athi River.
“We realised it is only through such arrangements that we can be able to achieve our goals,” managing director, Mr James Ruitha, told journalists on Tuesday.
As a parastatal, the institution is in competition with private players to provide housing units across the country.
However, it is always limited by land access and financing, which it now seeks to bridge.
The project, the second in which NHC is participating, will be fully funded by the Sahal Ltd.
The houses will be built in phases with the first consisting of 500 units to be complete by March 2011.
In the first project in Kileleshwa, Nairobi, the parastatal did a 80:20 ratio in financing with a private firm.
“We have the land, a 72-acre in Mavoko and our bankers are ready to roll out the finances. NHC will, therefore, bring in the technical and marketing inputs to the project,” said Mr Abdullahi Maalim, a director of the company.
When complete, the gated neighbourhood will have two and three bedroom houses to be sold at Sh2.75 million and Sh3.45 million.
A Chinese company contracted by the Sahal will handle the construction to be finalised in 36 months.
Speaking when the two firms signed the agreements, housing minister Mr Soita Shitanda, noted that provision of housing in Kenya is still hampered by archaic laws.
“We have a serious shortage of housing but cannot match it up because we still have procurement and building laws that are archaic,” he said.