Mrs Wambui Kariku, a 43-year-old mother of three, has been shopping for a house since 2011. She lived in a three-bedroom house and shared washroom and kitchen facilities with four other families with rent of Sh8,000 per month.
She had hoped to enjoy the living standards availed by a two or three bedroom self-contained bungalows in a secure gated community but thanks to her financial situation, this became a distant dream.
She visited other modern developments she thought would be affordable, but their distance from the central business district proved prohibitive. She gave her landlord a month notice when she finally secured a three bedroom modern apartment in Embakasi, East of Nairobi.
She now pays Sh20,000 per month. Though the new apartment was not in the best condition with cracked tiles, missing hinges, it was better than her former house.
“Now my family will be able to use the toilet, bathroom, clothes hanging lines and balcony without having to share with other families,” she concluded.
According to a report by the South African based Centre for Affordable Housing Finance Africa, Kenyans are opting for resale or ‘second-hand’ houses as new developments are becoming too expensive to buy.
Currently, the resale mortgage market constitutes as much as 60 per cent of mortgage transactions. This has however been restricted by the limited supply of good housing stock, currently as much as 50 per cent of the existing structures in urban areas are in need of repair and rehabilitation. This shortage of supply has been a major contributing factor to the rise in property prices.
The report also showed that most of the Kenyan population cannot afford housing built by leading developers, and as a result, the remaining 85,000 or so households address their housing needs independently and often informally.
This contributes to a growth in slum dwellings and poor quality housing. Research done by a slum dwellers umbrella body, Muungano wa Wanavijiji, found that 70 per cent of Nairobi’s housing stock comprises of single roomed shacks made of wood, mud, tin galvanised sheets, or wattle. Recreational spaces in Nairobi have a bigger total land mass than the slums.
In a move to meet the demand of housing, the Kenyan government has continued to explore a variety of strategies. Initiatives underway include the Appropriate Building Technology Programme, the Kenya Slum Upgrading Programme (KENSUP), Civil Servants Housing Scheme, Housing Infrastructure and Government Estate Management. The World Bank is also supporting the Kenya Informal Settlements Improvement Project (KISIP), which focuses on improving tenure security and infrastructure.
Non-Governmental Organisations are also playing an important role in delivery, often with the support of international bodies.
Homeless International, a non-governmental organisation, has been working with Kenya’s National Cooperative Housing Union (NACHU) and Pamoja Trust. This collaboration with Pamoja Trust will enable more than 4,000 households to obtain land and/or secure tenure, 172 households to upgrade their homes, and in partnership with the World Bank, relocate 20,000 railway dwelling families to sustainable accommodation.
Shelter Afrique entered into a Sh40 million loan agreement with Makao Mashinani to deliver housing microfinance to about 2,000 households. In September 2012, Jamii Bora Makao initiated its second phase of a Sh5 billion low cost housing project that will deliver 2,200 houses.
The first phase of 950 houses has been completed and low cost, two-bedroom units are being sold for Sh1.5 million. They initiated the second phase of 1,250 houses, to include housing that costs between Sh2.5 million and Sh5.4 million.
In 2011, Equity Bank launched a mortgage product specifically targeting low-income groups, focused on those earning a monthly income of at least Sh20,000 in partnership with a construction company for low cost houses of about Sh195,000.
Mortgage lending is still accessible to a tiny minority. Mortgage lending as a percentage of GDP was 2.6 per cent in 2010, growing at 14 per cent annually. Only about 11 per cent of Kenyans earn enough to support a mortgage. This means that most middle-income earners cannot afford an average mortgage necessary to buy an entry-level house.
The National Bureau of Statistics in the country defines middle-income households as those whose monthly incomes fall between Sh23,671 and Sh112,717.