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NEWS & CURRENT AFFAIRS

The Nairobian

Should State focus on affordable housing or slums upgrading?

Real Estate

By Ayoki Onyango | Jul 04, 2024

**Affordable housing units under construction at Machakos township on June 27, 2024.** [John Muia, Standard]

The question experts in real estate development are asking is: should the government focus on slum upgrading to create more decent housing units for low-income earners and the middle class, or continue with the construction of affordable housing units?

Opinion is divided on the issue. The Kenya Kwanza administration is spearheading the affordable housing programme, but some believe slum upgrading should be prioritised.

Charles Ayoro, an expert in real estate development, argues that the huge demand for housing in Kenya calls for both upgrading slums and constructing affordable housing. He asserts that the rising population requires more housing units than affordable housing alone can provide.

Sarah Aluoch of Sarahfine Investments Ltd believes the government should focus solely on slum upgrading and stop taxing workers for the construction of affordable housing units. She contends that the working and middle classes are capable of buying their own houses and should be free to do so without additional taxes.

The current demographic survey shows Kenya's population stands at 54 million persons.

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"The huge demand for housing has even created a situation in which most developers are churning out houses without due consideration to quality assurance. We are concerned about the quality of the houses being built now by some contractors since some of them have compromised the standards as there are no benchmarks to appraise their work", says Ayoro.

Kenya's current population stands at 54 million. Ayoro points out that the huge demand for housing has led to developers churning out houses without proper quality assurance. He expresses concern over the compromised standards, as there are no benchmarks to appraise their work.

The government is addressing the housing problem by constructing affordable housing and upgrading slums for both low-income and middle-income earners.

It is projected that Kenya will have a population of 60 million by 2030, with more than 50 per cent living in urban areas, creating high demand for new housing units through ongoing construction and slum upgrading.

The enactment of the housing levy into law by Parliament facilitated the taxation of all salaried Kenyans.

"Kenya integrated housing survey budget reveals that 6.2 per cent of Kenyan households are able to borrow money for purchase or construction of housing" says Ayoro, who is an economist-cum lawyer.

Kenya plans to spend billions collected from workers to fund affordable housing projects. Conceived in the 1990s and funded by social security contributions, the government aims to build 250,000 housing units across Kenya annually. However, Aluoch argues this is unrealistic, stating that the government has only been able to build 50,000 units per year.

The 250,000 housing units will be categorised into socially affordable and market units. Given that 30 percent of Kenyans live below the poverty line, it will be difficult for many to purchase houses ranging from Sh840,000 to Sh5.7 million.

Earlier this year, the government received Sh31.7 billion from the World Bank and the French government through the French Development Agency. The World Bank provided $150 million (approximately Sh24.1 billion), and the French Development Agency gave 43 million Euros (Sh7.6 billion) for slum upgrading in Nairobi and other urban centers.

Aluoch argues that the government should focus more on slum upgrading to avoid further taxing already overburdened Kenyans. She points out that most people who require housing live in urban areas.

While both experts agree on the need for every household in Kenya to own a house in urban centers, they differ on the approach. Ayoro believes both slum upgrading and affordable housing construction should run concurrently, while Aluoch advocates for slum upgrading only, citing the imprudence of further taxing Kenyans for housing.

It is therefore upon the government to determine which of the two projects to prioritise, given the controversy surrounding the housing levy imposed on salaried workers.