A new world Bank report released recently, reveals that to curb growing slums in Kenya two million affordable city houses need to be constructed.
The report cautioned that unless elaborate plans are made towards affordable housing, growing slums
in Kenya will only get worse in the next decade.
Kenya like any other African country has the fastest growing cities in the world however most new homes target the middle and upper classes as it’s easier to make a profit from high-end sales.
The world Bank predicts that most Kenyans will live in cities by 2033. Practically, Kenya needs to produce 244,000 homes a year to meet demand however less than a quarter of this number are being constructed.
But given rapid urbanisation, the situation is only worsening. World Bank notes that Kenya’s cities are growing by 500,000 people a year. Nairobi is one of Africa’s most expensive cities for housing, with 2013 prices almost triple those of 2000 the world bank observes.
The report identifies financing as the main impediment to housing in Kenya. There are fewer than 25,000 mortgages in Kenya as banks have limited access to long-term funding.
The report urges private sector to set up a mortgage refinance company to provide cheap, long-term funding to mortgage lenders from the capital markets and other investors.
This, World Bank believes,could increase the number of outstanding mortgages in Kenya to 140,000 by 2022, with one-third of borrowers having low or informal incomes, it said.
The World Bank also challenged the government to improve access to land, provide basic infrastructure and speed up mortgage registration and title transfers.