Nairobi’s rental landscape set to change - Daily Nation

New plan seeks to use alternative technology in building houses

Tuesday June 19 2018

A move by the government to set up housing units near the city could starve neighbouring regions of tenants. FILE | NMG

A move by the government to set up housing units near the city could starve neighbouring regions of tenants. FILE | NMG 

By JAMES KARIUKI
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Freeing public land for residential development projects in Nairobi has applied the brakes on the booming subdivision of land in satellite towns with an eye on the spillover from the centre.

Traditionally, those unable to afford high rents that come with staying close to town, have had the option of living further away or opting to set up their home in the outskirts of Nairobi. Many are also landlords.

But matters may not be looking so rosy for such people if a State backed plan delivers the envisaged number of housing units.

A government plan to demolish some units within the CBD’s vicinity to construct storied structures where residents will be given an opportunity to own them through long-term payment plans may starve satellite towns of the human traffic they have been enjoying over the years.

The boom largely driven by small-time real estate agents (developers) and ‘people-owned’ saccos is behind the uncontrolled subdivision of land that saw Kajiado County Governor Joseph Ole Lenku freeze further issuance of tilte-deeds to facilitate proper planning.

Earlier conflicts

Earlier conflicts erupted in the county after huge parcels of land taken up by private developers, especially in Kitengela, Kipeto, Isinya areas, were sub-divided.

Areas which had previously been earmarked for agriculture were rapidly changing to residential, commercial and industrial zones.

With the price of land within Nairobi County going through the roof, Kiambu, Thika, Machakos and Kajiado have been the biggest beneficiaries as Nairobians flock in droves seeking to own small parcels of land (an eighth of an acre) for residential purposes.

Some saccos, such as Uriithi and Nachu have come up with attractive packages where they buy land and construct houses for onward sale to their members.

Mwalimu, Safaricom, KCB , Bandari and Stima Sacco among others have also built high-end houses for sale to members and other buyers cashing in on the need for decent housing for the working class in Nairobi.

Low income earners

Transport and Urban Development Cabinet Minister James Macharia said this was bound to change once the government injects large sums of money towards development of infrastructure within public land earmarked for development of housing estates for the low income earners.

“This project must succeed at all costs as the government has identified land as a major impediment towards ownership of houses for low income earners. We shall provide land and invite developers to put up the houses,” he said.

The growing middle-class has also attracted foreign and local investors who have enjoyed tidy returns from sale of apartments. But this has largely benefitted the high-end market with the low-end left to squeeze themselves inside slums or seek refuge in satellite towns.

Nairobi currently suffers a deficit of about 200,000 housing units that has created demand for land in adjoining towns as rental units also attract high rents beyond the reach of many.

CS Macharia said alternative building technologies were being adopted to help lower the cost of construction as well as fast-track delivery of the houses.

“We have invited experienced mass housing units developers to put up highrise buildings that will be sold to working class Kenyans for cash and in a rent-to-own scheme,” said Housing PS Charles Hinga.

Among parcels of land identified for redevelopment are government servant quarters and old council houses where standalone house abound.

In Nairobi, old council units currently accommodate 17,000 families but the same space will accommodate 167,640 families upon completion of the government-fronted redevelopment.

Government servant quarters have also been identified as well as other idle land owned by various government ministries that will be used for housing.

This has reignited interest in urban living easing demand for small plots in satellite towns.

The hyped housing agenda by the government has orchestrated new interest in home ownership among formal employees who will enjoy lower mortgage terms run in tandem with a tenant purchase scheme.

The deal has been sweetened by Treasury Cabinet Secretary Henry Rotich’s move last week that created the National Housing Development Fund (NHDF) where employers and employees will make a 0.5 per cent contribution from one’s gross salary to a maximum of 5,000.

Advantaged position

The new scheme places formal employees at an advantaged position where one could chip in higher savings towards their home ownership dream enabling them to live near their workplaces.

“It will ease the daily early morning commute to the city and late evening transport chaos experienced on Kenyan roads as commuters head home out of the city,” said a resident, Peter Karahira.

For the first phase, CS Rotich allocated Sh3 billion for construction of affordable and social housing units by the government.

In his budget, Sh1.5 billion will be spent on police and Kenya prison officers thereby enabling them to reside with their families within the lines unlike the current situation where many rent houses near their workplaces.

A further S1.5 billion will be spent on development of houses for civil servants.

Kisumu Urban Project and Nairobi Metropolitan Services Improvement Project have also been give Sh18.4 billion for servicing of land before private developers are ushered in to put up affordable housing.

“The ripple effects of affordable housing are at par with building comparable market rate units.

"Research has shown that the supply of equitable housing tends to increase new consumer spending in moderate-income households which drives the circulation of capital inflow, generates new sources of local revenue, creates jobs and grows the economy,” wrote Qureish Raghib, a senior partner at Equinox Communication, in an opinion in the Nation earlier.