Hope for homeless city dwellers

Experiences from models in London, Tokyo, Boston and Moscow have shown that it is the work of the Government to take the lead in housing its urban population and Nairobi should not be any different, writes Peter Thatiah

Africa, particularly Kenya, is rapidly moving into that perilous phase of development where Europe, Japan and America were before the Great Depression of the 1930s. Never again have rural dwellers abandoned their villages for the cities at the rate that they are doing now across Africa.

In Kenya, as elsewhere, how to house the hordes of productive but less-utilised humanity is the million-dollar question. A few facts are telling, if not frightening. According to government statistics, 27 per cent of the 34 million Kenyans are residing in urban areas, majority of them first-timers. By 2017 the population will be 44 million, 38 per cent of it in urban areas. By 2032 we will be 63 million with a whopping 68 per cent of us residing in urban areas.

Where will these overwhelming numbers of people live? London, Moscow, Tokyo and Boston had their times of dealing with this question more than a century ago. The lessons are the same — that the private sector is not interested in constructing dwelling houses for the surging humanity fresh from the village. After all, the newcomers do not have the money and the few who have it exhibit an awful borrowing culture in relation to mortgage and related housing schemes.

With all indices brought to the fore, the performance of the Ministry of Housing could be one of the telling indicators of where Kenya is headed as a society. Indeed, when the Housing Policy was drafted in 2004 and a Ministry of Housing constituted in 2005, the Government seemed to have woken up to the fact that the private sector will never partner with the poor in matters housing. Experience has shown that massive government involvement is crucial if the poor are to be housed.

Gerald Mutua, a private developer and proprietor of Hawkins Properties, says that the country is in the right track, even though more needs to be done. He explains: "There were attractive incentives that were spelt out in the 2006/2007 Budget, which included a refund of excise duty for contractors building houses for low income groups. My firm has already forwarded an application to the Ministry and we were informed that our applications have been forwarded to the Treasury for consideration."

In an interview with a local daily, Housing Minister Soita Shitanda says that this incentive is for those constructing at least 20 units of not worth more than 1.6 million each.

Government’s responsibility

"This is designed to make contractors feel attracted to building houses for low-income earners in large numbers. Hundreds of thousands of new residents are pouring into Nairobi every year and they don’t have money for expensive houses. At the same time, we can let them live in unplanned environment only at the peril of our security, health and general wellbeing," he says.

Experiences from models in other countries have shown that it is the work of the Government to take the lead in housing its urban population.

Every city that has been besieged with huge and unplanned flow of humanity has had to wage a housing revolution.

But is the Government of Kenya ready for this revolution? Shitanda, the minister tasked with making it happen, says that he is working on it. He explains: "We are in the process of floating bonds worth Sh5 billion for a massive housing programme in Nairobi. The Government will inject an extra Sh4.8 billion to make it Sh10 billion. This type of housing investment is unprecedented in East Africa and this is in recognition that only the Government can take risk a with this segment and mobilise resources to help the lower bracket segment with decent housing. The bonds will be in the market by August."

The minister says that the Government has so far shown willingness to go the distance.

"I started first by selling non-strategic government houses in Nairobi. The 1,200 houses provided us with seed capital and the Government injected Sh1.5 billion. We have built 300 units in Lavington, Kilimani and Jogoo Road, which have already been occupied. Right now we are in the process of finishing an extra 800 units in Ngara. This is what we call the Civil Servants Housing Programme," he says.

In this programme, Shitanda explains, all you have to do is raise 10 per cent of the value of the house and then move in. The remaining is deducted from your house allowance over the years.

"We moved in because we felt that the National Housing Corporation had failed in its mandate," he says.

On the other hand, private investors are not willing to take risks with low-income earners or junior civil servants.

Bringing sanity to the market

Dickson Murage, the CEO at Pristine Homes, says that by constructing houses in the city, the Government will help stabilise the prices and inject the much needed sanity into the market. "The National Housing Corporation ought to have done this a long time ago but it seems they were unable. It is only recently that the Government has moved in but the NHC has been missing in action," he says.

The minister agrees that radical reforms at the NHC are needed. "I have already laid down a strategy of reforming this important institution. In the past the NHC acted as if it was a rent collection agency," Shitanda says.

He adds: "All they did was repossess council buildings and then collect rent to pay their employees. That defeats the mandate of the corporation because its sole function is to provide homes for Kenyans. You don’t provide homes by collecting rent. Right now we are in a programme where all the houses repossessed are sold immediately and the money used to build more houses for downloading to Kenyans."

Explains the minister: "All house sales are done through tenant-purchase agreement where the person residing in the house is given first priority. He then pays 10 per cent and the rest is paid through a highly subsidised programme where interest rate is only five per cent. In addition, unlike private developers, our deals do not factor the element of the value of the land. We only look at the value of the house. That is how we are able to sell a Sh12 million house for comparatively as little as Sh4.5 million, or a Sh5 million house for a mere Sh1.5 million."

Bringing down old houses

On another front, the Government has started pulling down older houses and building new ones. A project started at Shauri Moyo Estate last week, seeks to construct 300 new houses. Another group of people consisting 316 new homeowners is set to move into houses along Jogoo Road near St Stephens Church. Overall, housing projects on this side will involve 1,200 homes, with extra 500 units at Starehe and 300 units for senior civil servants at Park Road.

The principle, according to Shitanda, is to create 15 houses for every ten they sell. That way, the Government will be on its way to fulfilling the mandate of providing homes for Kenyans who can not afford to pay the current prices put up by private developers. The minister admits that while we might not see immediate revolutionary results, this might as well be the beginning of the revolution.

In addition, the minister says that the Government is planning to go a little further and add schools and shopping complexes in the areas where they will put up homes. For instance, there is a 42-acre piece of land near Pangani Shopping Centre along Thika Road that he is eyeing. He says: "This prime piece of land belonged to a foundation that did not bother to renew the lease when it expired. In fact, they had a huge debt in rate arrears and we had to repossess the land. We have invited tenders, both locally and internationally, for developers to come and partner with us. We envision putting up a Sh50 billion worth of buildings comprising apartments, schools and a shopping complex on the land."

But will the Sh2 billion worth of unused land see the beginning of a new era in the drive of putting a roof over the heads of people in Nairobi? Shitanda says that they have succeeded in the estates that they have done so far from scratch.