Seven in 10 real estate property projects ‘extorted’ – association
Nearly two in three property developers in Kenya have projects stuck in the approval process, with some waiting more than two years for permits, according to a newly launched industry handbook.
The Kenya Property Developers Association (KPDA) says the regulatory bottlenecks are increasing housing costs and slowing investment in the country's real estate sector.
The findings are contained in the newly launched Property Development Handbook, which shows that 67 per cent of surveyed developers had pending approvals.
According to the handbook, bureaucratic procedures, overlapping regulations and corruption are among the key challenges delaying projects and increasing construction costs.
The industry lobby says prolonged approval timelines are forcing developers to absorb higher financing costs, contractor expenses and material price increases before projects can break ground, costs that are ultimately passed on to homebuyers and tenants.
Speaking during the handbook's launch, KPDA chairman Ken Luusa said the guide was developed to help developers navigate an increasingly complex regulatory environment as new laws and regulations continue to emerge.
"I think the biggest challenge we have is a lack of understanding. With the various new laws, regulations and Acts that are being passed, they create a new operating environment, and it's important for our members to understand what they need to do in order to seize the opportunities that are available," he said.
According to KPDA, poor coordination between government offices, corruption, unofficial payments and land ownership disputes create significant project risks.
Luusa said the handbook is intended to serve as a practical reference for both new and experienced developers by consolidating approval procedures, regulatory requirements and compliance obligations into a single document.
The handbook shows that approvals can take between three and six months, while some developments remain in regulatory limbo for more than two years.
It also cites physical paperwork, multiple approval agencies and human interference in digital approval systems as major contributors to the delays.
"The biggest advantage is that it gives developers a quick reference point on the key areas they need to focus on and the regulatory environment they operate in. Knowledge is power, and we felt it was important to capture the lessons and experiences we've learned into one guide for everyone operating in the real estate sector," he said.
According to the handbook, delayed approvals and regulatory challenges continue to undermine investor confidence.
Developers surveyed reported demands for facilitation fees, political interference in projects and intimidation by enforcement officers, while unclear approval procedures have resulted in significant budget overruns, higher borrowing costs and missed investment opportunities.
The publication also highlights the complexity of Kenya's development approval system, which requires developers to obtain clearances from numerous national and county agencies responsible for planning, environmental compliance, construction standards, utilities, roads and taxation before projects can proceed.
The handbook comes at a time when developers are also adjusting to changes introduced under the Finance Act 2026.
Luusa said the removal of stamp duty exemptions on some construction materials could further increase development costs and undermine the government's affordable housing ambitions.
"The government's biggest agenda has been housing its citizens. Some of the taxes affecting construction inputs are issues we continue to raise because we need an enabling environment that allows developers to deliver on the housing agenda," he said.
Despite the challenges, KPDA says opportunities remain in selected segments of the market, particularly housing, logistics and warehousing, although developers must be more deliberate in identifying viable investments.
"The outlook is quite patchy. There are sectors that are doing well, but developers have to be very discerning about where they invest. We continue to see opportunities in housing and in logistics and warehousing, but developers need to be very focused," Luusa said.
As part of efforts to strengthen industry advocacy beyond Nairobi, KPDA also announced plans to open its first regional branch in Mombasa in August as it marks its 20th anniversary.
The association said the expansion will give developers along the Coast a stronger voice in engaging regulators and shaping policies affecting the sector.
The association believes that reducing regulatory uncertainty and improving coordination between developers and government agencies will be critical to lowering development costs, accelerating project delivery and increasing private investment in Kenya's property market.
