Is affordable housing in Nairobi a myth?

In Kenya, the yawning gap between demand for housing and its supply continues to grow. The estimated demand in urban areas for housing is approximately 150,000 units a year. The current supply is about 30,000 units.  The gap between supply and demand is felt more keenly in the lower income housing market. Less than 20% of  the new housing supply targets the lower and lower middle-income markets even though they generate over 80% of the demand.

Nairobi, as the largest urban area in Kenya, bears the brunt of this inequitable and growing deficit. In 2011, market prices of luxury units in Nairobi jumped 25%, and have continued to remain high providing developers with little incentive to invest down market. The vast majority of housing units on sale go towards meeting demand at the upper end of the market, due to high returns on investment.

This market dynamic will not change until the middle to upper income market is saturated, which is not predicted to happen soon, says Victor Mahinda, CEO of Urbanis Studios, the building design arm of Urbanis Africa, an organization that provides housing to Nairobi’s lowest income earners. Consequently, decent housing affordable to the majority of Nairobi residents is not available, and the result is that 60% of Nairobi residents currently live in slums.

Since 2007 the Kenyan government has incentivized developers to move down market by offering, among other things, tax breaks for housing units that cost less than KES 1.6 million (approx. USD 18,000). However, with such high profits in the higher income market, developers see no need to take up these incentives.

“Developers have to be making a conscious effort to target low-income earners,” says Mahinda.

This has not proved easy, though. The Acumen Fund considers an “affordable” home in Nairobi one that is sold at or close to KES 1 million (USD 11,800). The high cost of construction, among other factors, makes it difficult to achieve this level of affordability even for those, like Urbanis Africa, which work to supply housing to lower income brackets. While older units in the Jamii Bora Makao project that Urbanis manages sold at less than KES 1 million (USD 11,800), the low-income units in the just completed phase two are going for KES 1.5 million (USD 17,650). It is increasingly difficult to provide affordable housing through the private sector and remain commercially viable.

With the inclusion of the right to adequate housing in the 2010 Constitution of Kenya, understanding how to provide affordable housing has become a priority. Further, provision of housing has been devolved to the county governments, making the Nairobi County Government directly responsible for ensuring that all of its 3.5 million inhabitants are adequately housed. What can the County Government do to meet this obligation?

Alternative approaches to supplying affordable housing

For developers, there is an inherent conflict in trying to build low-cost housing using traditional technologies while maintaining the standards set out by the building code, Mahinda explains. However, developers could maintain the quality of the standards while keeping costs low by substituting traditional materials, such as quarry stone, with alternative building materials, such as stabilized soil blocks.

But the building code does not recognize alternative building materials and technologies (ABMT). Alternative materials are considered semi-permanent and not fit for urban use. They are also unable to meet the measurement standards required by this code.

That’s one conflict that can be resolved. The national government has drafted the National Building Regulations 2012, which make major revisions to the “archaic” building code used by urban authorities and adopted largely from the British building regulations of the 1940s. The revisions include stipulations that make the use of alternative building materials and technologies possible.

Once the regulations are finalized, the Nairobi County Government will have a role to promote these regulations to meet the city’s housing deficit through the use of cheaper, quality materials and faster technologies. These alternatives have not been popular with the local construction industry, primarily due to market acceptance, particularly from consumers. Even Urbanis Africa hesitates to use alternative building materials and technologies (ABMT) in its projects. “It would first require acceptance from our clients otherwise our project could be stigmatized,” says Mahinda.

The County Government will be instrumental in sending the important signal to developers, financiers and end-users alike that they consider alternative building materials and technologies a viable option. It will be a good step towards ensuring that affordable housing in Nairobi is not a myth.

Sheila Kamunyori is an urban consultant based in Nairobi. She is also a PhD student at the London School of Economics and Political Science (LSE). She is the co-founder of Naipolitans, an urban forum that aims to provide Nairobi residents with opportunities to engage with Nairobi’s rapidly changing environment.

This article forms part of Urban Africa’s urban reporting series.

Read Sheila Kamunyori’s other articles on Nairobi:

Examining Nairobi’s split personality

Can recycling help Nairobi cuts its waste?

Come dance with me

Reflecting on Nairobi’s heritage

Image: a standard unit at Kisaju View Park Estate, which is being developed in Kaputiei town. Urbanis Africa.


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