We are living in a world where the majority of people live in cities and 1 billion live in slums, a figure that will double by 2030. The urban population is growing at a rate much faster than can be absorbed and managed, causing demands on services and infrastructure that massively outstrip supply. In many emerging market cities, this leaves the majority of residents with few options but to live in slums.
Increasing access to high quality affordable housing has a profound impact, both for the individual and the society at large. Yet, housing is a challenging and capital-intensive sector characterized by delays and regulatory difficulties, and as a result, it rarely gains the limelight for impact investors and social entrepreneurs.
There are many avenues through which to address these dynamic and the Kenya government has set out the strategy in the Big Four Agenda – Affordable Housing. The Agenda aims to create 500,000 new home owners. This will ensure every working family can afford a decent home by injecting low-cost into the housing sector.
Reforms will be undertaken to lower the cost of construction and improve accessibility of affordable mortgages. Although the project has its own unique challenges it has massive opportunities for investment and community growth. But one thing is for sure, the government cannot achieve this in isolation.
To improve the lives of the poor in Kenya, housing cannot be overlooked. This is especially in current times where population is rapidly growing. If we ignore housing, we are missing the forest for the trees. Housing is at the root of many of the other issues we work to address – the lack of quality shelter means people live in areas with reduced access to clean water and sanitation, unreliable and unhealthy energy sources, increased exposure to diseases and low levels of financial security.
Nairobi is particularly the most congested city in Kenya with most of its population living in the slums. With this level of growth, Nairobi requires at least 120,000 new housing units annually to meet demand, yet very little has been done in the past years. As a result of this mismatched supply and demand, housing prices have increased. This pushes lower income residents out of the formal housing market into the slums.
The Iron and Steel Marketers’ Breakfast is devoted to bring together key players in the housing sector to recognize the need to catalyze and support affordable housing across emerging markets. The event will attempt to paint a picture of the landscape and offer some strategies for success.
With affordable housing, Kenyans earning medium incomes can live comfortably and in well-designed houses.
To qualify for a house, one is required to register with the Boma Yangu housing fund, on the government portal. Upon registration, a unique identification number is allocated to you. This is the number that one is supposed to use to make monthly contribution to the fund.
Once you complete your profile, you will be required to state your housing prefernces – the type of house applying for.
The initial eligibility for allocation will depend on several factors, such as when you registered, family status as well as demand across the housing categories. A member is only entitled to one house under the AHP.
The payments can be made through mobile money, debit card, bank transfer or on the Huduma Life app.
Kenyans who contribute to the fund but fail to win a unit in the ballot system of allocation will get a refund plus interest, according to the government spokesperson.
Overall, for one to qualify for allocation, they must have paid up at least 12.5 per cent of the total value of the unit they applied for by the time of completion of the units.
With low and middle-income earners in mind, there are four income brackets targeted by the programme, including social housing targeting those earning below Sh20,000, low-cost housing targeting those earning between Sh20,000 and Sh50,000 as well as mortgage gap for those who earn between Sh50,000 and Sh149,000. There will also be a mid to high income earners category of Sh150,000 and above.
The pricing of the houses varies, and under the social housing project single rooms will be sold for Sh600,000, with the buyer expected to make a minimum deposit of Sh2,500 a month. Two-room units are going for Sh1 million with a deposit of Sh4,500 a month, while three-room units will go for Sh1.35 million with an instalment of Sh6,500 per month.
These will have shared common areas such as water points and bathrooms.
They will be put up in areas currently occupied by informal settlement like Kibera. A one-bedroom house will be sold for Sh1million, two bedrooms for Sh2 million and three bedrooms for Sh3 million.