Firm in private pact to end housing woes in counties

By JAMES ANYANZWA

KENYA: County governments will sign public-private partnership agreements with individuals and firms to spur large-scale investments in the provision of affordable housing.

Housing Finance Ltd has signed a joint venture agreement with a landowner in Kiambu County for the development of housing units.

Kahawa Downs Development Estate is the second joint venture project between Housing Finance (HF) and individual landowners.

The deal is being handled by the Housing Finance subsidiary, the Kenya Building Society.

Completion date

Under the agreement, the Housing Finance will develop 220 units comprising of two and 3 bedroom apartments to sell at between Sh5 and Sh6 million. Kahawa Downs, Opposite Kahawa Barracks, are set for completion by December 2015.

Kiambu County deputy Governor Gerald Gakuha said the supply of affordable housing to low and middle income households has not been rising fast enough to meet the current housing demand. Gakuha said competition amongst developers has impacted positively and negatively on the real estate development in the country. He said land values in most areas are exorbitant, adding that developers tend to pursue projects that give them maximum returns.

 “This process has also resulted to uncontrolled sub-division of agricultural land into small plots that are uneconomically viable. The result is uncontrolled and uncoordinated developments,” he said.  “There is need for land-use planning because the agricultural productivity of the land is being wasted.”

Sectoral woes

The projected will be replicated in other counties to cut on housing woes. It is estimated that out of a total 150,000 housing units required annually in urban areas, only 35,000 units are produced.

High cost of finance and building, lack of serviced land and construction materials, have hindered the development of real estate.

HF Managing Director Frank Ireri (pictured) said the firm has embraced the concept of Joint ventures to further raise its involvement in the supply of affordable housing units.

Income segments

 Ireri said the mortgage firm has positioned itself as the main player in the property value chain under an ambitious five-year strategy.

The plan that began last year, targeting mainly the middle and lower-middle income segments of the market. Under the plan, HF seeks to explore partnerships, collaborations and joint ventures with landowners to develop housing units.

 “HF is  establishing partnerships, and joint ventures with persons with huge tracts of land where the company can develop substantial number of housing units to meet current demand,” said Ireri.