18 | NEWSFOCUS SEPTEMBER 25, 2018 www.mygov.go.ke MINIStRy OF tRANSpORt, INFRAStRUctURE, HOUSING AND URBAN DEvELOpMENt State Department for Housing and Urban Development AFFORDABLE HOUSING REPUBLIC OF KENYA www.housingandurban.go.ke The Affordable Housing Programme (AHP) is part of the Big 4 agenda; the presidential promise to deliver transformation across four development areas, including food security, manufacturing, affordable healthcare, and affordable housing. Affordable housing program principles • Allow every Kenyan to own property • Decent housing built to modern standards • Monthly cost of home ownership to be equivalent to rental cost. Target • 500,000 units owned by Kenyans. Implementation • The State Department for Housing and Urban Development (SDHUD) has the mandate of implementing housing developments across the country. Background • It is estimated that Kenya has an annual housing demand of 250,000 annually, with the estimated supply of 50,000 p.a. (80% deficit), mainly targeting the high end market. • In 2010, the demand for urban housing was estimated at around 80,000 units a year, with demand projected to increase to nearly 300,000 units a year by 2050. By comparison, in 2013 only 15,000 housing construction permits were issued in Nairobi, where most demand exists and most of these were for high-income apartments. • Only 2% of formally constructed houses are targeted to the lower income segments of the market, which account for the largest share of demand. • Furthermore, estimates of housing demand are for new housing only and do not speak to the high qualitative housing deficit in Kenya, estimated at 1.85 mn. • The high cost of formal housing means that home ownership is out of reach for most urban Kenyans, with vast majority of this population finding housing through rental markets (91% in Nairobi). • Kenya has an estimated 25,000 mortgages. The Principal Secretary State Department for Housing, Charles Hinga Mwaura and Governor Siaya County, Mr. Cornel Rasanga Amoth signing the Affordable Housing MoU Affordable Housing Programme Not a Pipe Dream Financing Framework AHP Stakeholders workshop in Kenya School of Monetary Studies with Financial Institutions. Annual housing supply vs demand country wide At National Urban Mobility Forum,Crown Plaza Hotel. SOURCE: State Department for Housing and Urban Development, World Bank AHP has defined four levels of housing types with only three (3) being the focus of the program To enhance program segmentation we have defined four levels of housing types with only three (3) being the focus of the program Middle to High Income (This segment will be supported by KMRC and Funded by lower interest rates over a longer repayment period) Mortgage Gap Income Range: KES 50,000 – KES 99,999 ▪ Share of Formally Employed: 22.62% Low cost Income Range: KES 15,000 – KES 49,999 ▪ Share of Formally Employed: 71.82%% Social Income Range: KES 0 – KES 14,999 ▪ Share of Formally Employed: 2.62% Meeting with Kisumu Governor to discuss affordable housing . Income Range: KES 100,000 + ▪ Share of Formally Employed: 2.85% ▪ Funding to be supported by the KMRC ▪ Low interest rates over a longer repayment period will apply
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