The impact of delay in achieving the affordable housing goals

Abstract

Housing plays an essential role in development of an economy, therefore, its provision is a priority for poLicy makers in a country. The Kenyan government, through the big four agenda, implemented an affordable housing goal of delivery of one million housing units over five years from 2017. This goal has, however, been faced by delays that have fed into the housing deficit in the country. These delays raise concerns about the completion of the project and the potential economic consequence of continued delays. Therefore, this paper intends to identify the extent of potential economic loss caused by the delay and the possible amounts needed for timely complete the project by evaluating the effects on GDP growth, unemployment, and estimation of the required volume of employment. To achieve the research objectives data from the Kenya national bureau of statistics was collected from 2007 to 2019 and included the GDP growth, wages, value of completed buildings, informal and formal employment and the value of residential buildings approved in Nairobi county. This data was evaluate using a Koyck model to reveal the relationships between the delay and GDP growth and unemployment, a V AR model was also used to estimate the additional volume of employment needed and the financial implications of this employment. The analysis revealed that the GDP growth and fonnal employment had inverse relationships with the delay variable, indicating an increase in these values would decrease the delay. The wages earned and the informal employment had positive relationships with the delay, therefore increases would increase the delay as they affect the labour force and the funds used in the project. The V AR model once used for forecasting suggested the volume of employment needed between 2020 and 2022 to complete the project averages at approximately 294,868. The financial implications of the delay were derived by finding the difference bet ween the values of the variables in 20 19 and the averages of the forecasted values to reveal a potential loss of 0.419% in GDP growth .