Ignore critics, the affordable housing project is on course

Entrenched skepticism about political pledges ever being followed to fruition and ignorance have blinded critics into refusing to acknowledge evidence of ground covered towards making the affordable housing project (APH) a reality. Some commentators have gone as far as deriding the AHP as a mirage with little chance of seeing light of day. However, evidence on the ground shows President Uhuru Kenyatta is taking no prisoners and pushing all buttons at his disposal to deliver on the project.

Contrary to critics’ doubts, the project is turning out to be the first of the Big Four Agenda to roll out of the planning mills, into fully fledged implementation phase.

In development project cycles, legal instruments, institutional framework and regulatory guidelines comprise over 70 per cent of the ground work phase. Resource mobilisation and implementation comprise the remaining 30 per cent.

A false narrative around the feasibility of building 500,000 house units before 2022 has been used to cast aspersions on viability of the project. This is a wrong premise that ignores the mission critical policy, legal and institutional foundations on which the entire project rides into full implementation.

The reality as at the end of June 2019 is that even if the President will have commissioned 200,000 houses by the time he retires, he has firmly and irreversibly secured the project to provide decent housing for generations of Kenyans.

The legal, institutional and regulatory framework is already in place and investors have embraced the APH.

The legal framework has been secured through amendments of the Central Bank Act and the Banking Act, the institutional framework put in place by way of the newly created Kenya Mortgage Refinance Company Ltd, jointly owned by private sector and government (80-20 per cent), and the Central Bank of Kenya (Mortgage Refinance Companies) Regulations (rules of the game) 2019 has been published.

Accelerated progress has been achieved in a short while following establishment of the National Development Implementation and Communication Committee.

The effect has been reduction of bureaucratic red tape and speedy resolution of emerging issues. The robust manner in which the government has rolled out the AHP has earned the enviable endorsement by the World Bank, the African Development Bank (AfDB) and the UN-Habitat, all of whom have committed colossal amounts of resources to participate in the project.

In May, the Word Bank announced injection of $26 billion, followed soon after by AfDB’s Sh10 billion to fast track the setting up of the Kenya Mortagage Refinance Corporation.

Participation by these international agencies not only confers enormous goodwill and confidence among investors and the public, not to mention availing of international expertise and standards in the implementation process.

The backbone of AHP’s anticipated rapid escalation is the huge amount of investments money bound to flow into the project once the banking and credit financing sectors start offloading their significant resources tied up in old un-retired mortgage credit facilities into the Mortgage Refinance Company.

The cost of mortgage credit is also bound to come down as the Mortgage Refinance Company significantly reduces the default risks. By last June the Boma Yangu online portal had registered over 200,000 applicants and, by all indications, would have captured more were it not for the barrage of media and civil society opposition and negative rhetoric.

Some 32 county governments have already set aside over 9,000 acres of land for the AHP in their areas. Under the AHP programme, a bed-sitter will cost Sh600,000, a one-bedroom house Sh1 million while a three-bedroom house in an apartment will go for Sh3 million.

The first low-cost housing estate in Nairobi are under development along Park Road with 1,500 units, each unit retailing between Sh600,000 and Sh1.4 million.

Other areas to be covered in the first phase include 20,000 houses in Makongeni, 5,000 units in ShauriMoyo, 3,000 new homes in Starehe and Mavoko in Machakos. The UN-Habitat committed to put up 100,000 units in support of the AHP.

Mortgage Refinance affordable housing solutions have already proved sustainable and popular with investors in South Africa, Nigeria and Ghana.

- The writer is a political scientist