At independence, the founding President,
Fifty years later, we are still fighting the same vices with a population that has increased almost six fold. Interestingly, the son has taken over the father's mantra. President
Our collective aspirations, under Vision 2030 are to win this war against poverty, disease and ignorance within the next 16 years. The question therefore is what should our generation or the Jubilee Government do differently in order to overcome?
Decent shelter for all citizens is one of the major aspirations under Vision 2030. Shelter has however been one of the major challenges, with mushrooming informal settlements in almost every town in order to cope with the rural urban migration.
It has been estimated that
The costs associated with housing are high and beyond the reach of most workers. Could access to affordable credit therefore be the solution?
The high interest rates have made it nearly impractical, even for those with decent incomes to contemplate taking a mortgage. Recent data indicates that there are only 20,000 mortgages in the whole country out of a population of 42million.
A decent three bedroom family house in
Add the fact that the rates are often variable, meaning that the bank can change the interest rate any time. The risk obviously becomes too high.
With the high interest rates, the bank's target market is the salaried employees who have proof of regular income, with the informal sector remaining largely eliminated and hence unbanked. There are slightly over two million people in formal employment and over 12 million others in the informal sector.
Based on the figures of people in the formal sector and with 20,000 mortgages, only one per cent of the salaried people have mortgages! The only option for most of the working population both in the formal and informal sector is renting.
Developers also face similar challenges when it comes to obtaining development loans. This simply means the developer has to load in the cost of credit in his pricing of the house, thus making the cost of houses prohibitive. In fact considering the cost of credit, many landlords continue to "subsidise" tenants. In the above scenario, rent for a three bedroom house costing Sh5 million should ideally be not less than Sh80,000 per month to enable the landlord pay for the mortgage.
Unfortunately for instance in
As the urban population grows, unless some drastic measures are taken to remedy the whole housing sector, the proliferation of slums will continue.
More importantly, actualising house ownership dream for majority Kenyans will remain just that- a dream.
Now compare this with for instance a country such as
The big question is, with this state of things, how will we achieve our dream of of providing decent housing as a basic need.
What we need is a holistic solution to home ownership. The government has a big role to play in putting in place infrastructure to open up new areas in the outskirts of the city. Tax incentives such as zero rating building materials and reducing construction levies in order to encourage and attract investors to the sector.
Additionally, possibly banks should be given incentives to commit a portion of their loan book to mortgage lending.
In the overall, the ministry responsible for housing needs to ask itself the crucial question: "What strategy do we have to house the Nation?".
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