Affordable housing plan: Will President Ruto deliver this ambitious plan?

"The requirement for new urban housing is estimated at 250,000 units a year, against a production of 50,000 units, translating to a deficit of 200,000 units," the Kenya Kwanza manifesto reads. "The cumulative deficit is estimated at two million units. As a result, more than 60 per cent of urban Kenyans live in slums and other low-quality housing without adequate sanitation, undermining their dignity and exposing them to health hazards. This is also a reflection of the bias towards upper-income housing."

Jua kali industry

Elimination of these problems, faced mostly in high-density settlements and which are prevalent in Nairobi and other cities in the country, will take a concerted effort, one of which, notes the manifesto, is strengthening the jua kali industry's capacity to produce high-quality construction materials. This will not only provide easy access to materials that will support construction but also support gainful employment.

Richard Muteti, the chief executive of Kenya National Federation of Jua Kali Associations (KNFJKA), says that the sector has been tried, tested and proven.

"We have been lobbying hard for jua kali involvement in these government projects. The jua kali was given an opportunity where three of our associations- from Kamukunji, Ngong Road and Kariobangi - as a consortium were contracted for the affordable units erected in Ngara, and they delivered," he says. These jua kali associations made windows and doors for an affordable housing project, which Muteti says they used as a pilot project to test the capacity of the industry, and it was satisfactory.

At the height of the Covid-19 pandemic, some other Jua Kali artisans were contracted to fabricate school desks, which were meant to provide for social distances in classrooms, a process that was largely bungled. Muteti says that the government's plan to heavily involve Jua Kali will "empower people at the bottom of the pyramid", with the country having "many skilled artisans" and such an initiative being "a win-win situation".

The new government will also be tasked with fulfilling one of its promises in the housing agenda, that of ensuring that mortgage uptake multiplies more than 30-fold, as listed in their manifesto.

**The requirement for new urban housing is estimated at 250,000 units a year.** [iStockphoto]

It recognises that the government should should "give developers incentives to build more affordable housing".

Economist Ken Gichinga says that the government does not need to be involved in the industry in the brick-and-mortar version that was previously envisaged.

Enabling environment

"The government just needs to create an enabling environment and let investors participate. We need to ask ourselves: What is the policy landscape that can attract investors?"

Gichinga says that the biggest impediment to the development of affordable housing is the difficulty in the acquisition of land due to the high cost of the same. This, he says, is driven up mainly by speculation. Intervention by the government to bring down the cost of land could salvage the affordable housing plan.

Mr Gichinga also says that commercial banks struggle to finance mortgages due to barriers such as slow processes of land transactions. "Government's investment in digitisation of land records to fasten processes will make it easier for lenders and borrowers," he says.

The government also committed, in the manifesto, to establish "a settlement fund similar to the one that was used to acquire land from settler farmers after independence".

"To stop land fragmentation, the land purchased by the scheme will be subject to land use planning where beneficiaries will own transferable residential plots in the planned settlement, and right to lease non-transferable agricultural land," it said.

In the five-year term, Sh250 billion will be set aside for this, of which the budget commitment is Sh50 billion, with Sh200 billion to be financed by pension funds.

"Assets Under Management (AUM) currently stand at Sh1.5 trillion and other collective investment schemes, including diaspora bonds," the Kenya Kwanza manifesto indicates.