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Affordable housing still a dream in Kenya

Milliam Murigi @millymur1

Tehillah Holdings Limited is one of the new real estate firms in Kenya. What motivated you to venture into this industry, which seems already flooded?

Though the company seems new, we have been here since 2012 but not so active. By then I was working with another real estate company known as Dinara Developers.

However, in 2016, I parted ways with my co-founder to concentrate more on this company. This is a real estate and property management company based in Nairobi and we are keen on development of quality houses as well as real estate management.

In Kenya, we have a serious housing deficit. What do you think needs to be done?

The only thing which is ailing this sector, is that most developers are not ready to embrace new technologies. For the few who have taken up such technologies, Kenyans are sceptical about such houses, thus making developers to stick to the traditional construction methods— brick and mortar.

If we don’t embrace such technologies the problem will continue and will even become worse because of the rate of rural-urban migration. Developers need also to consider apartments rather than stand-alone houses because cost of production for apartments is lower, the space utilised is still less yet the number of units is more. 

What are some of the strategies developers are taking to lower the cost of production?

So far, 90 per cent of developers have done away with middlemen. They are sourcing for the construction materials directly.

Others have started selling standardised, unfinished houses. This means that you buy a complete house to the stage of finishes and the owner is supposed to do floor covering, wall tiling, kitchen cabinets and bedroom wardrobes.

The government is planning to put up 500,000 affordable houses in the next four years. Is this feasible? 

No, demand for housing will still be there even after four years, even though this will cut the housing deficit by half. The government needs to motivate more developers and ensure that such projects are consistent with every government, which comes to power later. 

What are some of the challenges facing this sector?

Before introduction of the bank’s interest rate cap law, housing business was lucrative since banks were willing to lend.  Today, banks are shying away from lending. If this cap is reviewed, more developers will be willing to build houses because the demand is there.

Further, both governments national and county should consider setting aside direct funds for developers.  The high cost of land has forced more developers to change their strategies such as having projects far away from Nairobi to lower the cost and having longer payment period so as to attract as many people as possible.

Additionally, there are so many levies when one is moving materials from one county to another and this needs to be reduced. The worst challenge is that this industry is full of con men and women and there is no way you can differentiate them from honest contractors and property dealers.

What is the secto outlook for this year and next year?

There will be a lot of expansion in this sector if the government implements its agenda well. The government should distribute the houses they are targeting to construct to different counties to ensure that the traffic – the benefits — moves to different locations.

On top of that, the government should make infrastructure their number one priority because this will encourage developers and Kenyans to move to areas far from Nairobi. 

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