NAIROBI, Kenya June 2 – Six decades after Kenya gained independence 70 percent of the country’s ballooning urban population lacks the ability to build, purchase or get a mortgage to own homes.
In the capital city of Nairobi, one of Africa’s most developed and largest cities, 90 percent of the population lacks the means to realize the dream to live in their own houses.
These were some of the disheartening statistics of Kenya’s housing sector which Housing and Urban Development Principal Secretary Charles Hinga shared with an international audience on Wednesday.
While addressed the 9th Global Affordable Housing Conference going on in Washington DC, PS Hinga literally spilled the beans on some little known secrets of how the overwhelming majority of Kenyans fail to achieve the dream to build or purchase houses for themselves.
Some of the shocking statistics the PS cited included the fact that out of an adult population of more than 24 million people, there are only 27,000 people with mortgage accounts.PS Hinga said it is only in the rural areas that the majority of Kenyans occupy their own houses with 70 percent home ownership.
The PS was making a keynote presentation on how Kenya has used the rent to own concept otherwise known as Tenant Purchase Scheme and the accompanying policies to reduce the unit price of apartments from the normal market rate of Sh11 million to an average of only Sh3 million.
While explaining why the Government was compelled to implement the Affordable Housing Programme, Mr Hinga said less than 80,000 of the formally employed Kenyans earn salaries ranging above Sh100,000 which can sustain to service a mortgage.
Hinga also explained to the participants at the World Bank organized conference how the Housing Fund works and it’s role in anchoring the National Tenant Purchase Scheme.
“The Housing Fund will mobilize Capital, offer certainty of sales in form of an off-take undertaking to developers and provide accessible finance for home buyers through a National Tenant Purchase Scheme,” said Hinga.
He said even after bringing down the unit prices of apartments through the AHP, majority of Kenyans still find it difficult to buy the houses
To bring down the cost of housing, the Government is partnering with with private sector developers. The State also provides land for the projects free of charge. So far, 42 Counties have signed agreements to avail land for the Affordable Housing Programme.
On how the Housing Fund will work, the PS said employees will make a contribution of 3 percent of their salaries while employers will contribute an equivalent amount to the account of their workers. The cumulative monthly contributions are not supposed to exceed Sh5000.
While contributions are mandatory for the formally employed, the Government encourages those who are in the informal sector to make voluntary contributions.
The contributions are meant to accumulate and serve as a 10 percent deposit before a contributor can become eligible to get a house through the scheme.
Those who fail to qualify will be refunded their money while contributors who do not want to purchase a house can withdraw their savings after seven years.
He said the programme has immense potential to promote economic recovery because it is linked to the Jua Kali and MSMEs.
PS Hinga added that the Government is rolling out housing projects all across the country to bridge the annual housing deficit of 250,000.
