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Affordable housing possible

23rd Nov, 2016

I recently attended a World Bank-sponsored workshop in Nairobi on how county governments can partner with the private sector to deliver affordable housing.

The workshop focused on the role county governments can play in “catalysing” the supply of affordable housing. They can do this by setting aside the large parcels of land they own for large-scale development of fairly-priced houses by the private sector. The partnerships could be in the form of joint ventures or public private partnerships.

What I found interesting from the discussions was the complaints by some private developers that many county governments are bureaucratic and most often lack proper structures for such engagements.

A developer said he had tried to approach some counties for possible joint venture projects, but it was hard for him to know exactly who deal with. There were also allegations of corruption in counties.

Some panelists, including an official from World Bank’s funding arm, the International Finance Corporation (IFC), shared some best practices from around the world, which players in the local real estate scene could learn from.

When it came to why house prices are generally out of reach for most people, developers blamed it all on the high cost of borrowing (even after a law capping interest rates at 14 per cent per had come into force).

But the financiers at the workshop quickly dismissed that claim, saying the problem was that most developers “don’t know how to package their financial requests in away that would appeal to lenders”.

Then came the stunner: Mary Mathenge, the CEO of National Cooperative Housing Union (Nachu), said affordable housing was possible, sharing how they had managed to build decent houses going for as low as Sh800,000.

My point? Affordable housing is possible. We only need to do our homework well and do things right.

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