Majority of African countries are facing a housing crisis as a result of high population growth, increased urbanization and low supply of affordable housing, the Pan-African housing development financier, Shelter Afrique, has said.
In Kenya, there is an estimated accumulated housing deficit of over 2 million units, and nearly 61% of urban households live in slums. The latest edition of the Kenya Economic Update finds that Kenya is missing a major opportunity for job creation and economic growth to formalize the housing industry and encourage it to better serve low income households.
Speaking in Nairobi at the inauguration of Karibu Homes, a low-cost housing project financed by the organization, Shelter Afrique Chairman Daniel Nghidinua said the situation is compounded by lack of affordable housing finance, high cost of urban land and weak tenure security, rising construction costs, and rapid growth in slums.
The company is now calling for a stronger public-private-partnership to address the shortage.
“These high growth rates have given rise to a surge in the demand for urban infrastructure and housing in urban areas. Unfortunately, urban planning and investment in housing are often lagging behind resulting in housing deficits. The surge in demand for housing, in turn, has driven up housing prices and often pushed quality housing out of rich for the majority, especially the poor, low, and middle-income households,” Mr. Nghidinua said.
To mitigate the crisis, Shelter Afrique has invested $2m (KSh 200m) in the Kenya Mortgage Refinance Company.
The firm’s Chief Executive Officer Andrew Chimphondah said this will support the development of affordable housing to meet the rising demand.
According to Mr Chimphondah, housing developers were not keen on building houses without guaranteed take-up, hence less focus on the lower end of the market. He added that a lack of affordability also explains the reasons why there were only 24,000 active mortgages in Kenya despite the country having a housing shortage of over 2 million units.
The Kenya Mortgage Refinance Company, fashioned as an implementing arm of government’s affordable housing plan, operates as a private sector-driven company with the purpose of developing the primary and secondary mortgage markets through the provision of long-term funding to the mortgage lenders.