Needed urgently: National policy on quality of rental housing

In less than a month’s time, fresh graduates will add to the endless list of Kenya’s job seekers. This means the number of brown envelopes mailed to different human resource offices in the country will grow in thousands, even though a recent survey indicated that companies will only consider employing new staff after three months.

A good job is not the only thing that the young will aspire to have, though. As they exit the small comforts of their university hostels, the reality and desire for self-dependence will dawn upon them, hence the search for a roof over their heads.

As they weigh the options of where to get the most affordable, decent house, the eye-opening fact of demand versus (lack of) supply for rental housing will stare them in the face.

In Kasarani, for instance, a recent house-to-house hunt for bed-sitters, the market entry point for most graduates, revealed that the average going rate is between Sh8,000 and Sh12,000 a month.

Almost all of them were occupied, and the caretakers we talked to said the earliest the demand is likely to ease is January next year.

To accommodate the increasing population in a city where land is fast becoming a scarce commodity, the little there is is used sparingly to spring up flats, which accommodate more per square metre.

NO CARE FOR DECENCY
As a result, Nairobi’s property market sees better prospects in the skies rather than the sprawl of land. Many developers are now putting up multi-storied apartments, but most of them have been accused of abandoning safety precautions when putting up the structures.

Mwenda Thuranira, a Mombasa-based developer, says that most investors no longer concentrate on the aesthetics and decency of structures, but on how cheaply they can put up a five-storey flat.

Once the structure is approved for occupancy, developers concentrate on chasing after returns through arbitrary rent increases and evictions, especially in informal tenancies.

The majority of the tenants who fall prey to these rogue developers are those in the low-income bracket. Most of them will readily accept to move into a Sh7,000-a-month bedsitter to cut costs.

“They are mostly graduates who are starting out in life, or those who were living in the slums and have chosen to ‘upgrade’,” says Thuranira. “Many of those in this category care little about decency. All they need is a roof over their heads.”

However, he says that those in the middle class will consider the neighbourhood they want to move to and the facilities it has to offer. For this group, Thuranira says, decency is paramount since the clientèle can afford it. And developers will strive to satisfy the target market, therefore abiding to the housing policies.

BUYING A HOME
However, Thuranira says that, going by the trend of rent rates in the country, the middle class would find it more economical to invest in buying a home than renting it.

“I expect that a tenant living in Kileleshwa, for instance, is in a position to take up a mortgage for a home. However, what many of them seem to forget is that the money that goes to the landlord is equivalent to that which has gone down the drain.”

According to a report from as far back as 1997 on the nature of rental housing in Kenya, rapid urban growth is making more people reliant on rental housing for accommodation.

However, production levels are not meeting demand in terms of quantity or quality, which is blamed on the inadequacies of existing policies and laws to guide the production of rental houses.

“This market (rental housing) has become the most important sector in shelter production and will continue to provide the majority of housing units in Kenyan towns into the 21st century,” it reads.

“The rental housing sector is complex and problematic because it has not developed fully. It is currently dominated by petty, capitalist landlords.”

Although the real estate industry has changed dramatically in terms of output and quality since that report was published, industry players still feel that the development of rental houses is still sluggish and sub-standard.

They add that the rental market has further been distorted by rent control and housing subsidies from government agencies and local authorities.

RENTAL HOUSING
During a recent conference on African Rental Housing, the Managing Director of Shelter Afrique, James Mugerwa, affirmed that access to housing is emerging to be one of the most daunting challenges of the 21st century in many African countries.

He argued that as the continent increasingly becomes urbanised, the demand for affordable and decent housing keeps escalating. To counter the demand, there is a need to have more rental units put up in towns.

Mugerwa emphasised that despite the demand, lack of housing policies leads to developers failing to meet decent housing needs.

“It is rather amazing that rental housing seems to have been forgotten in many housing policies. Rental residential markets remain relatively underdeveloped in Sub-Saharan Africa, whereas home ownership has been the object of all the attention by public policy makers and the private sector,” said Mugerwa.

With 90 per cent of Africa’s population unable to buy houses or qualify for a mortgage, he said there was need for a “mental shift” towards formal rental housing as a viable option to solve the housing crisis.

Daniel Ojijo, a developer, agrees that there is a need for more houses to meet the demand, and that it is the right of every individual to have a decent and conducive environment to live in.

“It is our responsibility as developers to ensure that any structure that we put up meets basic quality standards. However, that restraint does not only lie with us, but with national and county governments too,” he says.

DECENT LIVING
According to Ojijo, the duty to ensure houses are up to standard lies both on the developer and the planning and approval departments of local authorities, therefore these administrative zones “should closely supervise any ongoing construction” to avoid disastrous, ugly structures that pass for accommodation in the country.

“Everybody deserves decent living, regardless of their financial status,” he says.

However, Ojijo insists that a tenant can never be fully satisfied with a rental house and the only way to have one content is by encouraging one to own one’s own home, either through savings of loans.

The general lack of rental housing policy, according to the industry’s bigwigs, has contributed to more people living in poor, informal conditions, where they are forced to rent shelter from an informal market in which no regulations exist, and where the demand largely exceeds supply.

Caroline Kariuki of The Mortgage Company says that the decision to buy or rent a home depends, to a large extent, on the personal circumstances of the individual.

“Most Kenyans aspire to own a home and, therefore, stay in rental premises as they grow their incomes or save towards that dream,” says Kariuki.

“As infrastructure improves, the need to live in very close proximity to the city will cease, and the high cost of land that puts homes out of reach for the home buyers will be a thing of the past.”

MARKET DYNAMICS
However, the reality is that only 20 per cent of Kenyans own a home, says Kariuki, adding that, as a result of prevailing market dynamics, some people prefer to live in an area that might be too expensive to buy, but where the rentals are affordable.

“The cost of purchasing the house may be too high for one to afford, and the person might not be in a position to raise all the funds required or might not have access to a mortgage facility based on their circumstances,” she says.