Crime and its impact on the property market
Selling, leasing and renting real estate successfully relies on a list of things and security is at the top of that list.
Social media is currently littered with videos and photos of insecurity incidents. Mainstream media too has had a couple of headliners highlighting such incidents.
The increased reports of crime are dividing security stakeholders, with some claiming that these incidents and accompanying videos are not from Kenya while other admits that there is truly a crisis. Whether the alleged increase in crime and insecurity is real or not, the impact on the property market is the same either way.
Compromised property value
Selling, leasing and renting real estate successfully relies on a list of things and security is at the top of that list. The minute a neighbourhood is associated with crime and insecurity, property values within that location will either stagnate or drop.
The tenant turnover rate increases and inquiries reduce significantly. In developed property markets, leasing and property management agents tend to publish credible and verified data on crime rates in different locations as a way of helping house hunters make informed decisions.
Unfortunately, in Kenya, we lack bodies that publish frequent reports on crime rates, thus making it difficult to verify claims of increased insecurity. Regardless, if you are an investor in any property market, the alleged increase in insecurity cases should prompt you to look into your security system.
Michael Karani, the Property Manager and Realtor at Shilan Properties, says lately, security is a major concern for homebuyers and tenants when choosing where to reside or invest.
“Nairobi, is generally viewed as a hotspot for insecurity and as a result, people are shying away from the “not so developed” neighbourhoods, while opting to live in the densely populated estates. Middle- and upper-income class, feel more secure in gated communities where developers invest in security,” he says
But even before robbery videos and images started surfacing, Michael notes that security has always been at the top of house hunters’ checklists. People often ask whether there is a police station nearby and whether there are basic security measures in development, such as CCTV cameras, electric fences, alarms and guards.
These expectations vary depending on the location and the type of development. For instance, in previous years, a lockable gate was simply enough for tenants in low and middle-income neighbourhoods while those paying a little more demanded additional measures like guards and CCTV cameras.
However, as people become more cautious the list of demands is growing and a development-whether commercial or residential- without adequate security is likely to attract very few tenants.
“Properties in insecure neighbourhoods are very difficult to sell. And even when the owner gets lucky, tenants move out as soon as they realize the place is insecure. Subsequently, the property’s value depreciates or stagnates,” says Michael, cautioning that serious crimes such as terror attacks or threats and murders tend to have the worst impact on properties. The minute someone is murdered inside or near your property, it becomes a doomed investment.
Worrying insecurity patterns
But before we get into how an investor can secure their property, we ought to dissect the current crime patterns. Charles Ngoe, a Security Risk Management Specialist with over a decade of experience managing security within the East African Region and the Safety and Security Lead at one Acre Fund says “crime has definitely been on the rise across major towns in Kenya in the last couple of months. The reported cases range from violent robberies, street muggings and home and business invasions.
Ngoe notes that there are peculiar patterns in most cases. For instance, boda bodas have become a favourite tool for criminals, who use them for surveillance, attacks and gateway means.
Weapons of choice- notably, small arms have been involved in most of the crimes, pointing to evidence of a growing number of firearms in the wrong hands. In other instances, small weapons like knives have been used. There is also a worrying trend when it comes to the age of the perpetrators.
“The suspected criminals have been reported to be as young as 15 years old. This is worrying for anyone studying the crime data trends as we look to the future,” he says.
Another trend that should worry property owners is the increasing insecurity incidences in middle-upper-income neighbourhoods that were considered “safe” in the past. “In theory, and in practice, suspects make rational choices and thus choose targets that offer a high reward with little effort and risk, making the normally quiet neighbourhoods prime targets for crime,” explains Ngoe
Security Audit
While property owners may not do much to prevent their neighbourhoods or properties from being targeted, there is a lot they can do to prevent, deter or delay crime and eventually discourage criminals from targeting them. When the general public comes across news of successful crime prevention or suspects that have been apprehended, there is a cathartic feeling that accompanies such news.
The minute a neighbourhood is associated with crime and insecurity, property values within that location will either stagnate or drop.
Subsequently, their perception of a location improves. In the past, a strategically positioned CCTV was enough to scare away criminals but their tactics are advancing. Proper security systems should begin with an audit to establish the threats and the appropriate measures. Note that crime patterns change, according to location, type of property and the assets within a development.
“The importance of a security audit cannot be overemphasized. This exercise helps us identify loopholes, come up with countermeasures and track the effectiveness of the security measures in place. A security audit is, therefore, a first step in ensuring the soundness of your security strategy in mitigating risks that may affect your property, your assets and most importantly your people,” explains Ngoe. And while there are no perfect security measures Ngoe recommends a layered security system which can detect, deter and delay an attack.
Major Boke, a security expert with over two decades of experience in the security sector and the Chief Executive Officer at Jeff Hamilton explains that a security audit should have four phases. It starts with asset analysis to establish whether the assets within a property are worth protecting, threat assessment to identify potential threats facing the assets, vulnerability assessment to identify weaknesses in the existing security program and finally counter-measures and recommendations to mitigate the identified vulnerabilities.
A proper security audit should also be timely to ensure the vulnerabilities are mitigated before adversaries exploit the same to commit crimes. When it comes to the security management systems available, property owners have a long list to choose from especially with advancing technology.
“We could employ intelligent surveillance systems and biometric access control systems. However, technology does not work in isolation. Technology must interface with people to be effective. I believe the problem is not technology but inherent weaknesses within our public security structure. Our police are mostly reactive and not proactive. There are also weak relations between the police and the general public which has led to a serious image crisis,”
More gated communities?
Boke also suggests a change in lifestyle and socialization if we are to curb crime within our neighbourhoods effectively. Estates that are developed to increase social interaction may just be the answer to insecurity issues. He faults the increasing individualism, especially in the capital city, as more properties are developed to increase privacy while reducing socializing opportunities.
“Fundamentally security is a factor of our lifestyle. Socialisation within the Nairobi metropolis is around individualism. As a result, insecurity has increased, premised on the fact that we don’t care who our neighbours are. However, there have been great strides to improve security, especially in gated communities where everyone knows their neighbours and guests state where exactly they are headed,” he says concluding that we also ought to change the operating environment of private security who are five times more than the police. We need to empower private security by arming them. This way the police force can focus on public security rather than private security.
Evolving security tools
Benson Karomo, the Director and CEO at B2K Security and the coordinator of Mombasa Security Firm’s Forum (MSFF), a forum for security companies to engage and liaise with national, regional and county police to curb insecurity has been in the security sector for close to a decade. He says the idea of security has evolved over time and property owners with assets and people to protect have a wide range of options to choose from.
For instance, there is a significant increase in the use of technology, artificial intelligence, and the rise of cloud-based solutions for commercial premises. The idea of security has become more complex than basic man-guarding at an entrance. Just as security systems evolve, so should a property owner’s knowledge of security tools.
“Ideally, any serious investor, will incorporate input from a security expert from the preliminary construction stages and set aside a budget to match the risks and potential threats. Unfortunately, the majority of property owners do not consult security experts from a project’s inception and therefore end up learning the hard way after successful intrusions or attempted thefts,” says Karomo.
When conducting a security audit, establishing crime patterns within a property’s location should be the first step. “Someone in Baragoi faces different threats from someone in Likoni, Kibera, Kondele or Nyali, Karen and the suburbs. Every location has unique threats, which call for unique security measures”
Karomo who mostly operates in the coastal region, explains for instance that the threats change from location to location. “In the highly populated estates of old town area, Kisauni and Likoni, young, unemployed, idle and opportunistic men or boys form groups that terrorise. In Nyali, there was an emergence of a unique crime pattern of spider-men who disturbed residents before the police neutralized them.
Boda bodas and tuktuks, which are a common means of transport in the region have also contributed to the security incidences. Then there are terrorism threats in some parts of north coast areas of Lamu and Boni forest. Analysing a location’s patterns will help deal with crime effectively, as opposed to installing general measures.
Internal crime
Another consideration would be whether the crime comes from inside a building or outside. Karomo notes that in commercial properties, internal crimes committed by staff members are the most prevalent and difficult to prevent. They present the highest threat to commercial entities than the perceived forceful intrusions or external criminals.
In a residential building, criminals living within the property could also present a crime pattern that is difficult to detect and prevent. Therefore, when investing in security, such factors have to be considered in the audit.
Once you have your security measures in place, it’s also advisable to review them from time to time and keep up with new trends as criminals learn to bypass outdated tools. Karomo suggests engaging your security service provider as often as possible. And if you own a grand establishment, monthly security reports and follow-up meetings with the security manager and a comprehensive annual audit would be ideal.
In case of a successful intrusion or attempted theft, an emergency evaluation of the security measures in place is extremely important. Such evaluations should also be conducted during periods that trigger insecurity such as political periods, festive seasons, when there are terrorist threats, and when crime rates increase in the location.
Karomo also advises property owners to engage independent security experts, separate from their service provider every so often, to get a fresh perspective.
