While driving through the Kenyan landscapes from Nairobi through the Rift Valley to the Western or the Coastal region you’ll notice different houses from the luxurious to the worn out houses and the informal settlements.

According to estimates done by the Centre for Affordable Housing Finance in Africa (CAHF), Kenya has an overall housing gap of 2 million units. This deficit grows by over 200,000 units per year with the annual demand being 250,000 units. That creates a gap of 50,000 units.

The dream of getting a decent home in Kenya should not be a privilege but a human right. Housing is not only about construction but about ensuring efficient, resilient, and equitable housing for the people of Kenya. The government's commitment to achieving adequate and affordable housing is crucial in addressing the severe housing deficit, and making homes accessible to marginalized and vulnerable populations.

To address the shortage of houses in Kenya and ensure that people can afford homes, there are some measures to be put in place:

Affordable Housing Initiatives and National Housing Development Fund:

Government programs, investors, and other real estate stakeholders have collaborated to build more affordable housing supply units for low-income and middle-class Kenyans. The Affordable Housing Act is a crucial component of the government's strategy to tackle the housing crisis. There have been incentives put in place for developers to focus on cost-effective construction. However, Kenya's affordable housing programme faces challenges, including the implications of mandatory contributions from workers.

Technology: 

The adoption of technology in real estate has aided in the streamlining of property markets in Kenya. It has aided in construction which has made it more cost-effective for developers which in return leads to affordable housing units. The government's ambitious housing project aims to build 250,000 units annually to address the housing deficit.

Property buyers can now easily go on virtual house tours, purchase property, negotiate contracts, and even browse through house listings. This opens the Kenyan real estate market to the global market. Koch Properties is a pioneer and an expert in helping foreigners invest in Kenyan property. 

Strategic partnerships:

Partnerships in Kenyan real estate have been pivotal in major developments, expertise, and funding of the projects. The Kenya Mortgage Refinance Company (KMRC) plays a vital role in enhancing the accessibility and affordability of home loans by providing long-term funding to primary mortgage lenders. Private partnerships, Non-Governmental Organisations, and the government work together to come up with innovative solutions and aid in the execution of affordable housing units. The establishment of the National Housing Development Fund is a key initiative by the Kenyan government to support the construction of 250,000 housing units annually.

Strategic partnerships are a game changer, with increased market French and risk distribution. Imagine having a safety net while you take huge bold steps. Partnerships make affordable housing projects not only feasible but exciting, by turning intimidating challenges into lifetime and impactful opportunities.

Sustainable Practices for a Sustainable Housing Sector:

Kenya has been a champion in embracing and adopting green technology and energy-efficient measures to ensure sustainability in real estate. The growing trend towards a more sustainable housing sector in Kenya is evident through various initiatives and financing options that promote environmentally friendly construction practices. Developers have integrated sustainability practices and eco-friendly construction methods and designing of property. Innovative financing alternatives and government initiatives play a crucial role in fostering a sustainable housing sector. This saves them costs in the long term despite the initial high prices.

The cost of materials in Kenya has been a challenge. In recent years, Kenya has seen a rise in essential construction materials including, paint, cement, and steel. Experts have warned of a 10-15% increase in the next three months with predictions of a future increase.

The Russia-Ukraine conflict has exaggerated this issue, particularly affecting steel prices. Since the conflict began in February 2022, the price of steel in the international market has increased by nearly Kshs 13,500 considering that Russia and Ukraine account for approximately 10% of global steel trade.

Other factors that contribute to the high cost of materials: 

• The Covid-19 restrictions led to work stoppages and decreased productivity.
• Increased fossil fuel prices affect transportation costs.
• Supply chain disruptions and shipping bottleneck.
• Shortages of key construction materials like steel and timber.

The impact of the rising costs of material is evident in the construction sector therefore calling for the approach to more cost-effective solutions like a sustainable approach. A sustainable approach also adds a touch of excitement to everyday life. Imagine living in a neighborhood where your house is part of a green oasis, with a rooftop garden, energy-efficient technology designed to it, and smart technology that adjusts to your needs—making it seem like a futuristic eco-village that is part of the daily Kenyan life.

Affordable Housing Finance Solutions:

Access to low-interest loans and better terms in property financial terms like low-cost mortgages will enable more people to be homeowners. The National Housing Fund is a crucial component of the government's strategy to tackle the housing crisis. The government and financial institutions partner to offer government-backed loans and support first-time home buyers.

It doesn’t have to stop at that. There are possibilities and investment vehicles for having tailored financial plans to meet individual needs. New financial products are coming up like flexible mortgage plans that will aid low-income households as well as saving programs that are specifically designed for first-time homebuyers. Adequate housing is essential, emphasizing the necessity for accessible and affordable homes for marginalized populations.

Other Issues in Housing Finance Include:

• High Interest Rates: Low-income earners struggle to afford the interest rates offered by most financial institutions.
• Formal Documentation Requirements: Many potential homeowners lack the necessary formal documentation to qualify for loans.
• Limited long-term Financial Options: There is limited financing for low and middle-income households.
• Low mortgage penetration: Mortgage debt represents only 3.15% of GDP. As of 2015, there were fewer than 25,000 outstanding mortgages in Kenya.

The informal nature of employment for low and middle-income Kenyans plus their lack of collateral and unstable source of income, makes them the wrong match for the majority of the financial institutions.

Impact of Slums on Urban Living Conditions:

In Nairobi City, it is hard to ignore the large and various slums like Kibera and Mathare. Nearly 60% of the Kenyans living in Nairobi live in the slums. This is a clear sign of the impending doom in affordable housing.

This in turn has an adverse effect on people's living conditions, with many lacking access to proper sanitation and having to take up other unsanitary options like the flying toilet. There is also a lack of access to clean water and proper land tenure.

Community Support and Empowerment:

Habitat for Humanity: The organization has a significant role in housing. It mobilizes and empowers marginalized groups in the construction of affordable housing projects and improving the living conditions of vulnerable populations.

Advocacy for Land Tenure Security: This is an essential element in addressing land housing challenges in Kenya. Some organizations educate citizens and lead them to pathways in securing land documentation. This enables citizens to take control of their living situations.

Government Initiatives:

President William Ruto set up a pet project dubbed the Affordable Housing Scheme that is supposedly to ensure that most low and middle-income Kenyans are homeowners rather than renters while providing jobs to millions of Kenyans. The project has however received criticism with questions over practicality and the program objective. The affordable housing space is significant in contributing to economic growth and creating job opportunities within the real estate sector.

Kenya's Vision 2030 recognizes the critical need for affordable housing. It is a key component for achieving growth and sustainable development. Under this plan, the Kenyan government committed to building at least 150,000 houses annually for the duration of the plan. 

According to the UN-Habitat, Kenya needs to build at least 250,000 housing units per year, but currently, the country has 50,000 housing units annually. This has made it impossible for Kenyans to afford housing due to the increase in costs of property.

Shortfalls in Implementation:

While the government has made commendable progress in driving the housing supply, several challenges have hindered it's realization:

• Limited budget allocation: Due to insufficient funds, county governments have been held back in opening up critical areas of development.
• Land acquisition: The high cost of land, particularly in urban areas has been a challenge in land acquisition.
• Financing: As of 2015, there were over 15,000 outstanding mortgages in Kenya. There is also limited access to affordable housing finance.
• Bureaucratic delays: Administrative disruptions have slowed the pace of affordable housing down.

To accelerate the progress, the government has identified the following:

• To lower construction costs, they encourage the use of alternative building materials.
• Review the public-private partnership framework to enhance effectiveness.
• Fast-tracking incentives for developers and investors.
• Investing in urban planning to enhance sustainability.
• Providing necessary infrastructure to support housing developments.

Ultimately, the housing deficit situation is like a giant puzzle with missing pieces with all of us as the grand picture. This needs team effort with technology, finance solutions, sustainability, and strategic partnership as puzzle-solving tools.

Picture a superhero squad made up of Kenyan government initiatives, enthusiastic investors, and innovative developers teaming up to combat the housing crisis by building homes. There is a need for each of us to play a part in pushing policing and adopting sustainable practices. Think of it as a comic book, whereby the more the superheroes the greater the story and easier the win.

Regularly evaluating the measures taken to ensure housing affordability in Kenya is necessary for refining strategies and ensuring the resources are allocated efficiently. This will help in tackling matters regarding house affordability for the real estate stakeholders.

Inputting efforts like fostering new policies, fostering innovation, and promoting collaboration can be promoted to ensure that all Kenyans have access to decent and affordable housing.

FAQs:

What are some of the main factors contributing to housing affordability issues in Kenya?

The housing affordability issues in Kenya are mostly driven by the high population growth, slow supply of affordable housing, barriers and inconveniences in policy and regulations, and high cost of construction.

How is the Kenyan government addressing affordable housing? 

The government has launched several initiatives like the National Housing Development fund that aims to ensure that low and middle-income Kenyans own their own houses.

How can individuals and families access affordable housing in Kenya?

Individuals and families looking to acquire affordable housing can reach out to financial institutions, participate in community organizations, and be part of government initiatives on affordable housing.

What innovative solutions are being implemented to improve housing availability?

The housing crisis in Kenya has seen the adoption of housing microfinance, tenant purchase schemes, and community-driven construction initiatives.

What is the affordable house taxing relief in Kenya?

Kenya offers tax relief for affordable housing at 15% of an employee's contribution, capped at KES 108,000 annually. Originally, this tax relief was available only to resident employees who had applied for and were awaiting house allocation under the affordable housing scheme.