The unfolding troubles bedeviling some largescale developers of residential houses in the country provide an important reality check on the challenge of housing a rapidly urbanising population.
According to the UN-Habitat, a specialised agency on human settlement, Africa is urbanizing at an annual rate of four percent – making it the fastest urbanizing region in the world. A gathering urbanisation momentum suggests three out of every four Africans will be town dwellers by 2050. With only three out of ten Kenyans currently living in towns, the country lags behind the sub-Sahara urbanisation average of half the population. But there are solid indicators that more and more Kenyans will migrate to Nairobi and other urban centres in coming years.
An obvious upshot of rapid urbanisation is more pressure on social amenities. Besides fuelling a surge for houses, a bigger urban population will exacerbate the strain on school, health, transport and other services. A less apparent but insidious consequence of rural-urban migration is climate change. Without purposed interventions, mother earth will take a heavy toll from shrinking urban spaces trampled upon by an incessant human inflow.
A huge urban population is also a big opportunity for investors. This sea of humanity needs to eat, work and sleep. It requires stores with enough supplies for basics and wants. There are opportunities galore. Whether as an obligated duty to serve as in the case of the government or for-profit venture, there is enough cherry for an investment bite.
Housing is an especially alluring sector for investors. The UN-Habitat puts the housing deficit in Kenya at 2 million units. To merely retain this deficit, the country must build at least 250,000 houses every year. Yet on average, we are only managing to add 50,000 annually! Even if the government were to realise the growing mirage of constructing 500,000 houses annually under the Big Four agenda, demand for houses would be far from satiated.
Which is why private investments in housing must be solicited-for and readily embraced. Besides being a direct big player in the sector, the government should do more to seduce investors with an incentivising tax regime and friendly policies and regulations. Streamlining land governance and documentation to weed out entrenched cartels, conmen and profiteers who raise the cost and the risk of investing in land in Kenya would be a good starting point.
Population and urbanisation explosion are underscoring the value of urban planning. Land is a finite resource that a bulging human race must share. Yet the same land must attend to rising lifestyle sophistication in housing, sanitation, transport and environment conservation among others.
The traffic headache which is a constant in major cities and sensitivities to climate change are catalysing the growth of work-and-live communities. These setups are not just big gated community concept – they are fully-fledged cities. Besides controlled residential houses, they incorporate shops, offices, schools, medical centres, sports and entertainment facilities and business and logistics parks. Tatu City being put up by Rendeavour on the outskirts of Nairobi is a good example of this global urbanisation trend. While Tatu City and its Kiambu County neighbour, Northlands, are private developments, the government has put forward Konza, which is at an early stage.
Ideally, such investments should be big on climate control. This should be manifest in their choice of construction material, dedicated green spaces, landscaping efforts that purpose to preserve or augment nature and the land occupation density (how many dwellings are, for instance, being put up in a given space.)
By their very nature, work-and-live investment concepts require a lot of space to actualise. A realistic development of such a scale needs a minimum of 2,500 acres of land. Such expansive space is hard to obtain in, for instance, Nairobi, which hosts the bulk of urban migrants and by consequence, the most acute housing deficit.
But as the housing investment boom in Kiambu, Kajiado and Machakos counties proof, the future of fine urban living is likely to be away in the satellites of the city. Besides abundance of land, such localities have the added benefits of serenity and cleaner environment. As the Hass Housing index confirms, land and therefore the resultant property, is likely to be cheaper to rent or buy in these counties than in Nairobi.
There are a number of gated estates in Kenya. Some are completed, some on-going and others are planned-for. Examples include Edenville Estate in Kiambu with about 350 villas, Bahati Ridge in Thika featuring townhouses, villas, bungalows and cottages and Green Park Estate in Athi River with a mix of three and four-bedroom houses.
Few of these estates can rival Tatu City in size and the grandness of design. Already, dozens of Kenyan and global brands and manufacturing giants are operating out of the 5000-acre city. An international school and a CBC curriculum school are already open, and a range of houses are up and coming in the city that will also feature office complexes, a shopping district, medical clinics, nature areas, a sport & entertainment complex and manufacturing areas. Upon completion, it will be the closest to what is the ideal sustainable city.
A diverse housing market and demand will inevitably attract the unscrupulous to the sector as the rising complaints from short-changed clients confirm. Some investors deliberately under-quote and over-promise to lure clients. Others are just smarmy salesmen who never intended to deliver. There are also those who make genuine and naïve mistakes that compromise their ability to deliver.
The best regulator of the housing sector is doubtlessly the market forces. Buyers are advised to interrogate carefully investors’ portfolios vis-à-vis promises. Where else have they invested? In what? Are there well-known projects bearing their name? What’s their history? Do they have entrenched presence or is theirs a fly-by-night venture?
The author is the Managing Director, Maven Design & Build Ltd, a Kenyan-based construction consultancy.