Nairobi's financial woes are intensifying as a massive shortfall in revenue collection, largely driven by defaulting landlords, puts the delivery of basic services at risk. Governor Johnson Sakaja's administration is grappling with a severe compliance crisis, with official figures revealing that an alarming majority of property owners are not paying their land rates.

The scale of the problem is staggering. Out of approximately 250,000 registered land parcels in the city, only about 50,000 are compliant with their rate payments. This leaves a massive revenue gap that directly impacts the county's budget for road maintenance, garbage collection, healthcare, and public lighting, services Governor Sakaja has warned are suffering as a result.

The High Cost of Non-Compliance

The total outstanding revenue arrears for counties stood at a colossal KES 156.23 billion as of September 2025, a situation the Controller of Budget warned significantly impedes the ability of counties to implement their budgets effectively. For Nairobi, property taxes represent the single largest potential source of own-source revenue, making the high default rate particularly damaging. The county is now targeting over 200,000 properties with unpaid rates amounting to more than KES 54 billion.

This persistent non-payment places an unfair burden on the minority of compliant homeowners and small traders, noted County Receiver of Revenue Tiras Njoroge. The direct consequences for Nairobians are visible and tangible: deteriorating roads, inconsistent water supply, and challenges in waste management are all linked to the county's financial strain.

City Hall's Final Warning

In response, the Nairobi City County government has escalated its enforcement efforts. After previous warnings and clamping of buildings, the county is now pursuing more severe measures sanctioned by the National Rating Act. These actions include:

• Seeking court orders to auction the properties of persistent defaulters.
• Placing caveats on properties through the Ministry of Lands to prevent sales or use as collateral for loans.
• Disconnecting essential county services like water and garbage collection to non-compliant properties.

As a final olive branch, the county has offered a 100 per cent waiver on all accumulated interest and penalties for defaulters who clear their principal arrears between December 15 and December 31, 2025. Officials have emphasized this is the final grace period before a new wave of strict enforcement begins on January 1, 2026.

The coming weeks will prove to be a critical test for City Hall. The administration must navigate the delicate balance of enforcing financial discipline to fund a functioning city while addressing the reasons behind the widespread defaults, which some have linked to the high cost of living and a historical culture of expecting waivers.