Affordable Housing Programme in Kenya: Policy Guidelines and Milestones

The paper presents an overview of policy interventions and milestones by the Government of Kenya with regards to the Affordable Housing programme targeting civil servants, members of the Kenya Police Service and Kenyan Citizens. The programme was initiated by the Government to supply 500,000 homes over a period of 5 years in line with the Government’s Big Four Agenda, Kenya Vision 2030 and Kenya Constitution 2010. The paper presents a Financing Framework through which Citizens could eventually buy or rent a home cheaply. A highlight of the housing gap in Kenya is presented as well as the residential housing affordability challenges faced by most Kenyan Citizens. The paper highlights the eligibility criteria for affordable housing (through the Bomayangu online platform), the financing framework (for raising capital to buy a home) as well as partnerships between the Government of Kenya and other external stakeholders such as governments and private companies. Through the State Department of Housing and Urban Development, the Kenya Government has initiated several affordable housing projects in Nairobi and Kisumu Cities as well as Embu and Machakos Towns. In addition, slum upgrading programmes are on course in Kibera slums, Nairobi as well as other parts of Kenya. Lastly, the paper highlights the contribution to various stakeholders as well as housing finance theory where limited literature exists on such government initiated programmes.


Introduction
Affordable housing programme comprises of the supply side, demand side and enablers (land, infrastructure, tax incentives, tax breaks etc.); the programme targets low income persons, middle and high income segments with particular emphasis to closing the low-income housing gap by 60%, create 350,000 jobs in the construction sector and increase contribution to GDP (Affordable Housing Delivery Framework, 2018). Kenya's revised National Housing Policy, Sessional Paper No.3 of 2004 sought to address the deteriorating housing conditions countrywide and to bridge the shortfall in housing especially in urban Areas and addressing the issue of safer neighbourhoods (WorldBank, 2011;Nabutola, 2004). The Government of Kenya came up with Affordable Housing as one of the government's priority areas under the Big Four Agenda to ensure that the Citizens would have an opportunity to buy houses at affordable prices with better quality housing environment. Kosgei and Rono (2018) indicate that affordable housing is a key economic development pillar that the Kenya Government is pursuing to bolster economic growth and development.
Article 43 of Chapter 4 of Kenya Constitution 2010 indicates that every person has a right to accessible and adequate housing and to reasonable standards of sanitation. Hence, affordable housing (in the context of Big Four Agenda on Housing implies developing adequate, standardized housing as well as continuous supply of water and electricity (www.kippra.or.ke). This applies to government housing as well as commercial residential housing. The Kenyan government targets supply of 500,000 affordable housing units by year 2022 (bomayangu.go.ke; www.kippra.or.ke). Providing affordable housing in Kenya has become challenging especially due to the growth in Kenya's population. Developing good infrastructure equally means providing clean water, good transport network, sanitation and communication system (www.kippra.or.ke).
In Kenya, The State Department of Housing and Urban Development in the Ministry of Transport, Infrastructure, Housing and Urban Development is in charge of the Affordable Housing Programme. The department seeks to supply 500,000 new affordable housing units over a five year period through lowering the cost of construction, improving accessibility to mortgage financing and upgrading slums. About 300,000 Kenyan citizens have since registered to buy the houses (www.housingandurban.go.ke). Through a five year project pipeline, the government plans to develop affordable housing units in 5 lots with lot number one targeting 35,940 units in: Ngara, Parkroad, Makongeni, Shauri Moyo A, B, C and D, Starehe A & B, Mavoko. The slum upgrading and social housing programme is equally part of the affordable housing programme by the government of Kenya (Affordable Housing Delivery Framework, 2018) Eligibility criteria and financing have been clearly spelt out by the State Department of Housing and Development. To be eligible one has to register online via bomayangu online site created by the Ministry. Eligibility entails one being a Kenyan citizen with a valid Identification Card and should be 18 years and above.
Such applicants should specify the type of house they prefer and could contribute singly (voluntary contribution) or joint contribution with a spouse or some other family member. If one does not get allocated a house, they can access their contributions on the sooner of 15 years after the first contribution or upon attaining retirement age whichever comes first (bomayangu.go.ke). In view of Affordable Housing Delivery Framework (2018), financing framework, the Housing Fund will be the main purchaser of housing units from developers and similarly the long term financier offering home owners affordable and accessible funding to purchase homes through the National Tenant Purchase Scheme. The Housing Fund will mobilize capital from Government via 3% contribution by employer/employee, development finance institutions, local banks and affordable housing home owners' savings plans.
The construction of housing projects in Embu, Machakos County and Kisumu County has been financed by the Civil Servants Housing Scheme Fund for civil servants. Interested civil servants are advised to apply for the houses in view of their grades as well as their capacity to repay (bomayangu.go.ke). National Police Service Officers are equally eligible to apply. An objective point-based criteria is set to be used in allocating the houses once they are advertised for sale. Such allocations will be limited to one house per civil servant and priority being given to first time beneficiaries under the scheme (www.housingandurban.go.ke). This is to ensure fairness in allocation of the houses since about 300,000 Kenyan citizens have applied for the same yet supply of affordable housing is low. The annual demand for housing has increased steadily especially in Nairobi. The annual need for housing in Kenya was estimated at 206,000 units in year 2014 with 40% of the needs being in urban centres yet supply was limited to a paltry 50,000 units (Omagwa, 2014). WorldBank (2011) found that ony 11% of the urban population in Kenya could afford mortgage financing. With these limitations, the affordable housing programme would create an environment for more Kenyans to buy houses. Arvanitis (2013) indicates that in year 2004, the Government of Kenya initiated the Civil Servants Housing Scheme Fund meant to provide loan facilities to civil servants for purposes of purchasing or constructing residential homes and developing housing units for sale and rental by civil servant. Affordable housing programme was equally rolled out to cater for housing needs for civil servants, members of the national police service and the general public. Mburu and Kakumu (2013) document a low level of home ownership despite growth in mortgage portfolio. According to Section 5 of the Social Pillar of Kenya Vision 2030 on Housing and Urbanization, the Kenyan Government seeks to address the problem of affordable housing, social equity and a secure living environment. These are key tenets of government housing for rental and home ownership. Muthoka (2011) acknowledges that most real property investors in Kenya have some information gap and may still not consider the services of brokers who are in most cases better informed. However, the brokers' vested interests and costs associated with providing information to the buyers complicate the buyers' real property investment decisions. Kyambo (2011) contends that most real property buyers in Kenya make mistakes by trying to carry out the investment process on their own without soliciting for professional help. Hence, in view of affordable housing, the State Department of Housing and Urban Development has been key in providing citizens with relevant information about the affordable housing programme through bomayangu.go.ke cite as well and the website for the Ministry that is www.housingandurban.go.ke. Affordable housing is key since it is a basic need and most Kenyans in urban centres spend much of their income on rent; the cheapest home formally constructed would cost about $15,000 which still ends up being quite expensive for most Kenyans (Affordable Housing Delivery Framework, 2018).
Kenya has a population of 47,564,296 persons (23.548 million male, 24.014 million females and 1,524 being intersex) constituting 12,143,193 households; the country's household size is 3.9 persons which is fairly high. Nairobi County has the highest populations of 4,337,080 with a household size of 2.9 persons and a total of 1,506,888 households. The country's population has been rising steadily: with the population being 28.7 million in year 1999 then rising to 37.7 million in year 2009, the numbers rose to 47.564 million in year 2019 with the population density being 82 per square kilometer (KNBA:2019 Kenya Population and Housing Census, Volume I, 2019). This is a clear indication of need for increasing supply in residential housing: the Kenyan government has since responded with the affordable housing programme to address the country's increasing need for housing.

II. Affordable Housing Data and Financing Framework
High housing congestion rates have been recorded in Nairobi unlike other towns and cities in Kenya: Beguy et al. (2010) andRockefeller Foundation (2005) indicate that more than 25% of Kenya's population is housed in Nairobi; However, Nairobi occupies about 8% of Kenya's total land surface (Nabutola, 2004). Omagwa (2014) indicates that Nairobi accounts for about 25% of Kenya's urban population. Owning a home is quite expensive in Kenya especially in urban settings. WorldBank (2011) (2015) indicate that the Kenyan Government has adopted measures to lower the cost of mortgage financing for home buyers and construction housing. Despite these efforts, home ownership by government employees is quite low in Kenya. Mundra and Oyelere (2013) contend that securing a mortgage depends on the borrower's demographics such as wealth and their networks.
In Kenya, demand for housing is far too higher than supply. Despite the demand for urban housing in Kenya being about 300,000 units, only 15,000 units were developed in year 2013; low mortgage uptake has been recorded in the country with mortgages being estimated at 25,000 as of year 2018; demand for housing is constrained by lack of adequate funding, limited financial capacity to quality for mortgage and expensive mortgages (Affordable Housing Delivery Framework, 2018). The Kenyan Presidency seeks to develop about 100,000 affordable housing units via Memorandum of Understanding between the Government of Kenya and United Nations Office for Project Service (UNOPS); a further 200,000 affordable housing units will be developed between the Government of Kenya and other strategic partners (www.president.go.ke).
Arvanitis (2013) cites low mortgage penetration rates in Kenya that is 2.5% of outstanding mortgages to GDP. Home ownership rates are quite low especially in urban settings like Nairobi where houses are quite expensive: Citing Hass Consult (2015), Kosgei and Rono (2018) indicate that the estimated price for apartments in Nairobi is about 11.58 million Kenya shillings. Though government houses may trade at much subsidized prices, their prices are fairly high for low and middle income citizens. Phipps (1988) contends that households are faced with a budget constraint which affects their housing decisions. Through affordable housing, the Kenyan government expects the contribution of real estate and construction to GDP to rise from the current 7% to 14% by year 2022 besides contributing towards job creation (Affordable Housing Delivery Framework, 2018).
There are several affordable housing projects currently undertaken while some are to be rolled out in due course (bomayangu.go.ke). These include: 1,2 and 3 Bedroom 1,370 Apartment Houses at Ngara, Parkroad (228 units for Phase I, 260 units in Phase II then the rest in Phase III); 220 units Civil Servant Houses in Embu Town (2 and 3 Bedroom); 200 units in Machakos (2 and 3 Bedroom) houses set for completion in mid-year 2020; 463 units (2-3 Bedroom Flats and Bungalows in Mavoko Sustainable Housing Programme; 4,400 units in Kibera Soweto East Zone B (1,2 and 3 rooms in highrise blocks of 12 floors; NHC Stoni Athi view (Economy Block for Rental) i.e. 20 bedsitters, 17 units for 1 bedroom and 7 units for 2 bedroom houses; NHC Stoni Athi view (all 4 bedroom houses Type A, B and C to cost sh. 8 million to sh. 9.75 million; 3,000 units Starehe Affordable Housing Project (1,2 and 3 bedroom houses) with mixed-use development with social, common and housing amenities and Mariguini Informal Settlement (a redevelopment of 2,600 residential units of 1,2 and 3 highrise blocks of 10 floors (bomayangu.go.ke). In view of slum upgrading programme, a total of 822 housing units have been completed in Kibera Soweto A; 1, 2 and 3 room houses were sold as rent-to-own with a 25 year tenure for monthly rent of sh. 2,500, sh. 4,500 and sh. 6,500 respectively; Kibera B-D are the next projects; 498 slums have been mapped country wide for purposes of improving housing conditions (Affordable Housing Delivery Framework, 2018).

III. Affordable Housing Programme Updates and Milestones
The Kenya Government has made significant strides in affordable housing programme since it was initiated. On 6 th December 2019, President Uhuru Kenyatta launched the Habitat Heights (8,888 units) at Machakos County, Kenya as part of the affordable housing programme projects undertaken by United Nations Office for Project Services (UNOPS). This would not only provide affordable housing to Kenyans but also create jobs and business opportunities to the locals. In addition, developing decent housing for Kenyans would also promote the Manufacturing pillar of the Big Four Agenda. The affordable housing inputs are to be sourced locally more so from Micro, Small and Medium Sized Enterprises; tax incentives would be extended to lower the construction cost. The Eastlands Urban Renewal Master plan is expected to supply an additional 168,000 units. The resettlement of Kibera Zone B residents will give decent homes to about 4,400 households (www.president.go.ke).
Public Policy and Administration Research www.iiste.org ISSN 2224-5731(Paper) ISSN 2225-0972(Online) Vol.11, No.2, 2021 The Ministry of Transport, Infrastructure, Housing, Urban Development and Public works (through the Office of Principal Secretary) announced the sale of constructed houses in Ngara, Parkroad Nairobi, Embu, Machakos, Kiambu and Kisumu. In Ngara, Parkroad, the provisional selling price for one-bedroom apartment is 1,500,000 Kenya shillings; two-bedrooms apartments would cost sh. 2,000,000 and sh. 2,500,000 for the two different sizes; three-bedrooms apartment would cost sh. 3,550,000 and sh. 4,000,000 for the two different sizes. A parking lot (in the parking silo) would be purchased separately for sh. 390,000 (Ministry of Transport, Infrastructure, Housing, Urban Development and Public Works, 2019).
The development of 1,370 affordable housing units along Ngara, Parkroad is soon being completed with first priority being given to Civil Servants particularly those who vacated the old Parkroad Estate to pave way for redevelopment of the affordable housing units. This was communicated by the Principal Secretary for State Department of Housing and Urban Development. The next project will be a Shauri Moyo and Starehe in Nairobi (www.president.go.ke). About 300,000 Kenyan citizens have since expressed interest in buying the houses along Ngara, Parkroad via the government's bomayangu.go.ke portal. The prospective buyers are required to be paying a monthly minimum deposit of sh. 200. Buyers who may not settle the full purchase consideration are expected to pay 10% deposit and settle the balance over the next 25 years under a rent-to-own arrangement (bomayangu.go.ke).
Prospective buyers are expected to have saved 12.5% of the selling price before getting a mortgage to enable them clear the outstanding balance at 9% interest for up to 25 years. Investors have since committed over sh. 1 trillion towards the affordable housing programme in partnership with the Government of Kenya. For instance, United Nations Office for Project Services (UNOPS) has since committed sh. 500 billion to develop 100,000 affordable housing units in Athi river, Kenya (www.dailynation.org). The first batch of 228 units were completed and handed over to the government in January 2020.

IV. Value of the Review
This paper is of value in different ways. It seeks to sensitive Kenyans on the available opportunities (thro Government of Kenya) on owning a home through cheaper financing arrangements; the paper makes a contribution to the existing body of knowledge on affordable housing programmes especially in developing economies (such as Kenya) where the demand for cheaper housing far outweighs the supply of housing; the paper enumerates the successes that the Kenya government has made in terms of realizing its objective of supplying 500,000 homes in a period of 5 years; it also documents the programmes that the government has rolled out in terms of upgrading housing environment through improving infrastructure and neighbourhood conditions for residential housing. In addition, the paper highlights the financing framework that the government has put in place for raising capital besides the partnerships between the government and other foreign private partners; the paper further seeks to market the affordable housing projects that the government has completed as well as those which are on course for Kenyans to plan on how to buy a home; lastly, the paper highlights how household demographic characteristics affect affordability of housing especially among the middle and low income earners in Kenya.

V. Summary
The paper presents an overview of the Government of Kenya framework for providing affordable housing (for purchase and rental) to civil servants, members of the police service and the general public. A highlight of the housing gap in Kenya is provided as well as Government's efforts to enhance supply of affordable housing via partnerships with private firms and other international bodies: this is in line with the Country's Big Four Agenda and Kenya Vision 2030. Through the Bomayangu.go.ke platform, the government has documented information about the Citizen's eligibility for affordable housing, application criteria for purchasing a unit and relevant information about on-going projects through the State Department of Housing and Urban Development. The paper presents a financing framework (mainly via Civil Servants Housing Scheme Fund) through which citizens can purchase affordable housing units. A brief highlight of slum upgrading initiatives is equally documented. A highlight of complete and on-going developments is captured with respect to Nairobi, Machakos, Embu and Kisumu County governments.