Kenya’s fast paced urbanisation is pushing a large number of urban dwellers into slums due to high rents, according to Shelter Afrique.
The Pan-African housing development financier said that Kenya is urbanising much faster compared to its peers, piling pressure on access to basic shelter and social amenities.
Research by the firm shows the country’s rate of urbanisation currently stands at 4.2 per cent, above the 3.5 per cent continental average resulting in a housing deficit of an estimated two million units.
“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,” Shelter Afrique chief executive Andrew Chimphondah said.
This, he said, has resulted in more than 60 per cent of urban households living in slum areas, a situation that is likely to worsen with the increasing urbanisation rate.
According to UN-Habitat, Nairobi alone is home to nearly four million people meaning nearly 2.4 million are currently living in slums.
Nairobi is also one of Africa's most expensive cities for housing according to the World Bank, with prices in 2013 nearly three times those of 2000.
Coupled with years of unplanned growth amid rapid urbanization, more than half of the city’s residents now reside in slum areas.
This is despite the cropping up of satellite towns and increased housing development in Nairobi and its environs.
“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,” Chimphonda said.
He added that 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.
Data by the Kenya National Bureau of Statistics shows 74.5 per cent of Kenyans earn Sh49, 999 a month or below in the formal sector.
“This means that an affordable housing unit would need to have a monthly rental price of Sh15, 000 and below, assuming a maximum of 30 per cent of household gross income is spent on housing,” Chimphondah said.
He however lauded the government for increased efforts in creating cheaper homes as part of the affordable housing pillar under the Big Four agenda.
“We are, however, encouraged by the initiatives already put in place by the government of Kenya to address the issue,” he said.
Last month the government announced that the planned construction of 500,000 affordable housing units is on course, growing at a rate of about 200,000 units a year.
The housing financier also lauded the formation of the Kenya Mortgage Refinance Company (KRMC), aimed at providing long term lending to commercial banks, microfinance banks and Saccos to allow them to extend mortgage loans to eligible borrowers over a longer period and at a lower cost.
Data by the Central Bank of Kenya shows Kenyan’s have been slow to take up mortgages, with less than 25,000 mortgages in the market.
