Pressure for housing as Kenya’s urbanisation surpasses continent’s average

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By 2030, nearly half of Kenyans will be living in cities as many young people keep moving to urban areas in search of jobs, opportunities and more choices.

With half of Kenya’s population aged under 18 and with the mass movement to urban areas, it means that the housing challenge will continue until it is sustainably addressed.

Already, the UK has pledged support for Kenya’s plans to deliver affordable housing.

Kenya urbanizing rate higher than continent’s average

Kenya’s quest to provide quality housing is mired in controversy since the government does not have a clear plan on how the houses will be allocated.

This is despite Kenyans being forced to contribute to the scheme through deductions to their salaries every month, a move the government has now backtracked on due to its unpopularity and following a court ruling against it.

According to Shelter Afrique, Kenya’s growing urban population needs sustainable, resilient, affordable housing. The pan-African housing development financier says that getting this right is key to East Africa’s economic hub’s development.

Kenya is urbanizing at a rate higher than the continent’s average thus putting pressure on access to basic shelter and social amenities.

Shelter Afrique Chief Executive Officer Andrew Chimphondah notes that Kenya’s urbanization rate of 4.2 per cent is way above the continent’s average of 3.5 per cent, and has left a significant number of Kenyans living in slums.

“Our research has shown that Kenya has an estimated two million units housing backlog with an annual demand of 200,000 new units versus the 50,000 currently being constructed. The result has been that over 60 per cent of urban households are living in slum settings, a situation that could worsen with the increasing urbanization rate,” Chimphondah said.

“As the rate of urbanization increases so does the demand for decent housing and this partly explains why many Kenyans are living in slum settings. We are, however, encouraged by the initiatives already put in place by the government of Kenya to address the issue,” Chimphondah said.

Poor Kenyans

He said housing affordability continues to be a key challenge in the country given the current high cost of funding and unavailability of financing, amid rising property prices.

According to the Kenya National Bureau of Statistics, 74.5 per cent of the Kenyan population earn KSh49, 999 (US$487) a month or below in the formal sector.

“This means that an affordable housing unit would need to have a monthly rental price of KSh15, 000 (US$146) and below, assuming a maximum of 30 per cent of household gross income is spent on housing,” Chimphondah explained.

He said Shelter Afrique was encouraged by the formation of the Kenya Mortgage Refinance Company (KRMC), which will provide long term lending to commercial banks, microfinance banks and Saccos to allow them to extend mortgage loans to eligible mwananchi over a longer period and at a lower cost.

“That is important because it enhances affordability and boosts uptake of housing thus Shelter Afrique’s decision to invest US$2m in KRMC to stimulate the demand for affordable housing,” he said.

Africa’s housing deficit

The continent needs more than US$1.4 trillion in funding to be able to effectively address the growing housing crisis.

Shelter Afrique notes that the overall shortage of housing in Africa is estimated to be 56 million housing units. Out of this, more than 90 per cent or 45 million units are in the affordable housing bracket.

“This means that for Africa to fully address the issue of the affordable housing shortage, at an average construction cost of 25,000 dollars per unit, the continent requires at least 1.4 trillion US dollars excluding the cost of the bulk infrastructure,” Chimphondah said during an MoU signing ceremony in August this year.

He said a majority of African countries were already facing housing crisis as a result of high population growth, increased urbanization, poor urban planning, dysfunctional land markets, rising construction costs, the proliferation of informal settlements, and underdeveloped financial systems.

Countries with growing housing deficit include Nigeria with a deficit of 22 million housing units; Tanzania and Democratic Republic of Congo with a deficit of 3 million units; and Kenya, South Africa and Madagascar with deficits of more than 2 million or more.

Read: 2019: Luxury car sales drop in Kenya

I have 10 years of experience in multimedia journalism and I use the skills I have gained over this time to meet and ensure goal-surpassing editorial performance. Africa is my business and development on the continent is my heartbeat. Do you have a development story that has to be told? Reach me at njenga.h@theexchange.africa and we can showcase Africa together.

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