The quest for affordable housing has been a running theme in Kenya’s successive governments. President Mwai Kibaki’s administration is remembered for the Slum Upgrading Project; President Uhuru Kenyatta’ s administration is remembered for the plan to offload 500,000 housing units into the market in five years, and now President William Ruto’s government targets to push mortgages downstream to the ordinary citizen and grow their number from the present 30,000 to 1.0 million over the next five years.
Over the years, a lot has been promised, but is the target buyer happy?
DN2 Property sought to understand what the target buyer thinks about Affordable Housing through presenting a questionnaire on Affordable Housing to 65 respondents. In this feature, we tell you what these people think about the plan, their most popular sources of information on this topic, the age bracket interested in Affordable Housing, what they believe are mistakes the government is making in the implementation, and ultimately, what the buyer wants. But first, let us sample of few of the most outstanding opinions.
Eugene Wanekeya, Communications and Advocacy Officer
“Generally speaking, the affordable housing plan is good as it will ensure Kenyans are prompted to not only start thinking about, but also saving towards home ownership from an early age. As it stands, most people (based on observation of the older generations), postpone home ownership until later in life as they approach retirement. They then end up spending most, if not all their pension funds building their retirement homes, thus leaving them with no income to survive on, post-retirement. But this is changing.
The biggest problem with the government's approach to affordable housing was assuming that all Kenyans don't have a home ownership plan and thus introduced a compulsory housing levy to fund. Notably, the deduction is counter-intuitive to those already making mortgage payments or those in the process of building their home, as it takes away much needed cash for these purposes. It would be more prudent for the government to come up with a strategy that factors in where individual Kenyans are at, in their home ownership journeys, and incentivise those actively building or buying.
One of the ways the government can tailor the affordable housing plan to work for me and other people looking to own homes outside of the current available units would involve extending benefits to individual potential homeowners as well as investors and contractors involved in the affordable housing scheme. More developers should get land to put up affordable houses to sell at highly subsidised rates, statutory processes can be fast tracked, and infrastructure costs subsidised among many other benefits. I would be highly motivated to fast track my home ownership journey if I am incentivised through lower cost of building materials, getting tax breaks if I am already building a home, faster statutory approvals at county level as well as less bureaucracy in the building journey. For a long time SACCOs have been homeownership vehicles, as they invest in land and construction projects which they sell to their members, is it possible to extend similar benefits to these financial institutions to ensure the members purchase these properties at lower costs?
Mulang'o Baraza, Writer and Historian
The Affordable Housing scheme does not seem to have a clear implementation plan. Its implementation is almost entirely contingent upon tax-based funding, and the latest frontier could not have come at a worse time. Inflation rates are unbearably high. The economy, long battered by the Covid-19 pandemic, and now blighted by the chokehold of increased taxation, can't support Affordable Housing. And the people, barely scraping by, seemingly believe it shouldn't be at the forefront of government's priority list. As expected, the new Finance Bill 2023, which is partly the operational blueprint of the Affordable Housing scheme, has since elicited, largely, disapprobation from the public.
Kenya has obviously made several mistakes in the Affordable Housing scheme. Firstly, the State has long under-communicated the plan to an otherwise cynical and sceptical public. While the plan may be in line with a universally agreed endeavour to deliver the rest of humankind from squalid living conditions, the Kenyan State hasn't taken the trouble to explain to its people why and how it's about them. Or why it should come at a cost to the taxpayer. It has not sufficiently addressed concerns about the plan not being realistic - and convenient - for everyone. One of the practical challenges of the plan's feasibility is the fact that many Kenyans feel bludgeoned into wanting and accepting it. Some have suggested - while opposing the scheme - that the State's decision to make deductions into the National Housing Development Fund mandatory makes it a tax, and therefore a ruse merely meant to help augment government revenue (disguised as a charitable endeavour).
Moving forward, the government should focus on making the economy work for everyone first. This would, in effect, enhance the people's capacity to comfortably contribute towards the scheme. If possible, the State should shelve the Affordable Housing scheme as the prevailing economic circumstances don't favour neither its implementation nor attainability.
Ruth Tanui, Property Advocate, Managing Partner, Ruth Tanui and Co. Advocates
Many people still opt for the incremental path of owning homes (buying land and gradually constructing a family house). Perhaps the government should focus more on cleaning up loopholes in the Land and Housing Sectors. Such a clean-up would undoubtedly make home ownership more affordable.
The first thorny issue is the digitization of land transactions to make everything accessible online. The government has started this process in Nairobi, but it is slow and not fully effective. Additionally, if land registries could provide all the information when one conducts a search, some of the title issues would be avoided. Unfortunately, when there is an ongoing case in court relating to a given property being fraudulently acquired, when you conduct a search, you will not get such information, unless there is an injunction. As a result, many people end up with properties that have title issues. In the end, some people end up buying property more than once, making the homeownership process more expensive than it should be.
We also have several loopholes in the law that make it easy for criminals to thrive in the property industry. If these loopholes are sealed, property acquisition will automatically be less costly. For instance, the requirements for forming a real estate company do not place significant barriers to entry and there are no vetting processes. Anyone can form a land-selling company today and fix their prices subjectively. Even when the company directors are involved in fraud, they just close the company, form another one and mint more millions through conning people. We need stringent laws to regulate Real estate companies' and serious penalties for those found committing land and property fraud. Currently, land related crimes, like fraudulent transfer of property or forging documents such as title deeds under the penal code are considered misdemeanours, meaning a person is given a small fine or serves at least a year in prison if found guilty.
Perhaps the Directorate of Criminal Investigations should consider introducing land fraud units within their branches all over the country and digitally list the names of all companies or individuals found selling properties illegally. This way people will have a trustworthy reference point before handing over their money.
The above-mentioned questionnaire was presented to multiple respondents to fill online independently and remotely, and it had nine key questions touching on various aspects of Affordable Housing. 65 individuals submitted their responses, and this is what the data revealed:
Though the questionnaire was presented to multiple age groups, 26-40 years olds were the most interested in Affordable Housing as they make up 76.9 per cent of the respondents. Those above 50 were the least interested as they make up only 3.1 per cent. Age groups 40-50 and 20-25 expressed medium interest and their responses accounted for 9.2 per cent and 10.8 per cent, respectively.
It would then, be safe to assume that people within the 26 to 40 age brackets are the most critical target market for Affordable Housing as they are just getting settled or fully settled in their careers and actively working toward owning a home. Those in their 40s and 50s are likely to be in advanced stages of their homeownership journey. Further, employed people accounted for 52.3 per cent of the respondents while the rest were either self-employed (27.7 per cent) or unemployed (20.0 per cent).
Another important factor the questionnaire sought to establish was how knowledgeable the target buyer is on matters Affordable Housing and from where do they get their information. Question number three on the questionnaire required the respondents to disclose their level of understanding when it comes to the Affordable Housing Plan. They were to use a scale with numbers 1 to 5 to gauge their knowledge, number one on the scale being “barely knowledgeable” and number 5 being “very knowledgeable”. 36.9 per cent chose number 3 which indicates medium knowledgeability. Number 5, the highest on the scale, was the second most picked option with 26.2 per cent picks followed by number 4, which was picked by 23.1 per cent of the respondents. Option 1 on the scale which indicates "barely knowledgeable" had some significant picks at 9.2 per cent.
On the most popular sources of information, respondents were allowed to pick several media. Mainstream media took the lead at 69.2%. Social media proved to be a worthy competitor at 63.1 per cent while personal research came in third at 47.7 per cent. The fact that the respondents use personal research to learn more about affordable housing shows that there is genuine interest in the scheme. Friends and Family, Events and Public Forums and Adverts almost tied with 30.8 per cent, 29.2 per cent and 24.6 per cent, respectively.
The most pertinent issue was, and remains, whether the units sold under this plan are affordable enough - 47.7 per cent of respondents picked the options "No" in response to the question "Do you think the units sold under this plan have been affordable enough?". Only 26.2 per cent thought the units were affordable while the rest, (another 26.2 per cent) said "they were not sure".
This question was followed-up by another open-ended question for those who did not think the units were affordable. They were to share their thoughts on how the units should be priced to make them truly affordable. This follow-up question received mixed reactions.
There were varied responses, from Sh300,000 to Sh2.5 million for a 1-bedroom unit, all the way to Sh10.0 million for a 3-bedroom unit. However “Sh1.0 million” seemed to be a popular response for 1 bedroom unit and Sh2.0 million for 2-bedroom units. A few respondents (seemingly more knowledgeable) talked about factors such as location, amenities and size as important price determining factors.
Finally, there were two more open-ended questions. The first one was on the mistakes the implementers have made and the second was on what the government can do to make Affordable Housing work for the respondents. As one may imagine, the respondents had plenty to say regarding these two questions. We mapped out the key areas of concern as outlined under "the most common issues raised" and picked some of the most outstanding opinions on areas that need to be improved.
Overall, the questionnaire is just but a small window through which we got to understand how the public feels about Affordable Housing. The enthusiastic responses, even on the optional and open-ended questions prove that Kenyans are ready to be engaged on the matter. However, there is a strong need for systems and channels that ensure the public's voice is not muffled by the noise. In the end, everyone wants an affordable home, meaning all the stakeholders are on the same team. Why not communicate effectively more often?
