High cost of land holding back housing dream, PS

Abigael Jorgensen (left) business development manager Tuffsteel and Emily Mandala, director Evisa Construction Company after Emily received Woman Contractor of the Year award during the Construction Industry Awards gala. [Wilberforce Okwiri, Standard]

The PS for for Housing, Urban Development and Public Works Charles Hinga has said the high cost of land and materials are among the odds stacked against the realisation of affordable housing.

He termed as obscene, the high land prices especially in Nairobi, that are among the highest on the continent.

Cost of land and construction materials account for 40 to 60 per cent of housing costs.

In the past, developers have shied away from developing affordable housing citing these factors as well as complications in uptake by intended recipients owing to financial constraints.  

As a result, the state has identified 7,500 acres of government land that will be serviced and made ready for the development of the houses. No land costs will be passed on to the end users.

In addition, the PS says the procurement and property registration regimes also play negative roles in the country’s housing sector.

Addressing professionals in the construction industry during the inaugural Construction Industry Awards 2018 in Nairobi, the PS  called for the amendment of procurement laws to enable the government realise the affordable housing agenda.

“We are currently developing 1,000 affordable houses and 49,000 for the middle to high end annually. No wonder slums are mushrooming in our urban areas. It will be a tall order for us to realise the housing dream if land, price of materials and property registration remain the same,” he said. With such inverted numbers, the PS says people in low income areas never see themselves as part of the housing agenda.

He says that is partly the reason why people burn houses every five years during elections as they never feel that they are in line for the house provision process.

He said his ministry was in talks with the National Treasury to review the procurement rules so that the process could be hastened adding that since the process of putting up houses was a joint venture between government and private developers, there was a need to apply a different method.

“We are also putting in place qualification criteria that will see developers make a commitment fee to the development cost of the houses so that we can get rid of the so called middlemen, brokers and people who around this country as developers,” he said.

Framework

Mr Hinga added that his ministry was putting together a joint venture framework and a comprehensive development framework that will soon be made public.

The document, he said, will meet the minimum constitutional threshold of free, fair, transparent, equitable procurement process. Noting that the affordable housing scheme will spur the spending of close to Sh3 trillion, the PS said the government needs to leverage on that huge spending by getting the best prices for construction materials.

“The government is actually going to bargain for the best possible prices of construction materials. Can you imagine the millions of cement bags, the amount of wood, paint and other materials that will be used to construct a million houses? What does the government get back in return for the big spend?” he posed.

President of the Architectural Association of Kenya Emma Miloyo said professionals in the built industry should rise in their areas of influence and help the country achieve affordable and descent housing for all Kenyans.

“I want to challenge every developer in this country to move away from profits mindset when there numerous slums in the country particularly urban areas. We must not be consumed by greed, instead work together for the benefit for the country,” she urged.

The government has promised developers an uptake of units built under the programme.