Tenants to own homes by paying an equivalent of their monthly rent – Housing PS - Capital Business
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Tenants to own homes by paying an equivalent of their monthly rent – Housing PS

Kenya is estimated to have a housing deficit of over 2 million units with the bulk of urban population living in slums. World Bank estimates that on average, only 50,000 units are added to the market annually/FILE

NAIROBI, Kenya, May 3 – Tenants will soon become homeowners if the Government’s plan to buy affordable houses from the private sector is okayed by parliament.

Part of that plan includes passing of 35 pieces of different legislation to the National Assembly which will also aim to provide incentives for the private sector to participate in the affordable housing Big four Agenda.

Housing and Urban Development Principal Secretary Charles Hinga says the proposed new laws and policies will address the key factors that contribute to the cost of houses.

“We have to look at why houses in Kenya are so unaffordable. The first reason is land, which makes up to 40-60 percent of the total cost of development. Land (in Kenya) is also the most expensive in the continent. So what we will be doing as the National and County governments is aggregating land and packaging and releasing it to the private sector for development,” Hinga said.

The plan will also see the government address the cost of construction and building materials. As such, the government will employ industrial techniques which involve mass production of houses by standardizing the units.

“If it’s the doors, they will be the same size, as will be the windows and so on. Anything that you do at scale, obviously you are able to bring down your costs. We will also embrace alternative building techniques which include precast, prefab, stabilized soils and so on,” Hinga explained.

Hinga says the Government is also planning to mop up available houses and provide affordable mortgages through the recently established Kenya Mortgage Refinancing Company.

It will, therefore, revise the cost of processing and transferring of titles. Registration of a mortgage will reduce from the nine months that it currently takes to one month which will save about 10 percent of the total cost of development.

“We will also address the cost of financing where we will use Kenya Mortgage Refinancing Company to buy out all the houses and then give these houses to Kenyans at cheaper rates,” he explained, adding that National Housing Development fund will also be used to give Kenyans in the rental market to access cheap financing.

At the same time, the newly established National Housing Development Fund will offer extremely flexible terms of home ownership.

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“For those earning less than Sh50, 000 per month, they will be able to own houses by paying the equivalent of what they usually pay per month worth of rent. These low-cost houses are subsidized in cost and will have flexible payment periods.”

During his state of nation address yesterday, President Kenyatta affirmed his government commitment to providing affordable housing to Kenyans of all walks of life before his second and final term at the presidency is over.

“My dream is one day, in the not-too-distant future, owning a decent home will be within reach of every Kenyan of median and modest incomes.

Families will retire in the evenings to clean, well organized and hygienic houses and Kenya will go to sleep knowing that all its citizens have a sound roof over their heads,” Kenyatta said.


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