By NICHOLAS WAITATHU and JACKSON OKOTH
NAIROBI, KENYA: Private developers in Nairobi slowed their activities last year after the county government increased construction permit fees, a new report reveals.
The State of Development Report notes that in 2013 the county government raised construction permit fees by between 200 and 1,250 times compared to the previous year.
Kenya Property Development Association (KPDA) and HassConsult said in a report released that the increased fees have hit hard property developers in the county. KPDA Chief Executive Officer Robyn Emerson explained that over and above the increased construction permit fees, developers are also suffering out of sharp increases in lands rates.
“The increase in fees has contributed to the housing crisis. The construction permit fee has been increased by a multiple of between 200 and 1,250, from 0.001 to 0.006 per cent of the cost of construction to 1.25 percent,” said Emerson.
By the fourth quarter of the last year, these newly increased charges generated Sh114 million accounting 23 per cent of the city councils revenues. The report notes that housing shortage in Nairobi is acute, and deteriorating as it is only 15,000 housing units were planned in 2013.
KPDA Vice chairman Mucai Kunyiha observed that the huge supply gap raises doubts on the national government efforts to build 250,000 housing units annually as part of transforming the country into a middle-income city by 2030. Nairobi has declared its intention to emerge as a world class city, but this depends on a sharp increase in construction, where current trends are instead slowing down the development industry’s rate of growth,” she added.
Farhana Hassanali of HassConsult said ongoing development is reaching buffers in other areas too, with building densities rising with more units per plot.
