The impact of delay in achieving the affordable housing goals
Date
2021
Authors
Majanga, Paige Ongachi
Journal Title
Journal ISSN
Volume Title
Publisher
Strathmore University
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 .
Description
Submitted in partial fulfillment of the requirements for the Degree of Bachelor of Business Science at Strathmore University