City for rent

Abstract

The housing market in Nairobi is characterised by a mosaic of players and housing typologies determined by varying levels of access to land and affordability. The legacy of colonial segregation since the establishment of Nairobi in 1899 as a transport and administrative centre for the Kenya-Uganda railway is also still evident, with majority of the planned housing being on the higher-altitude western areas that were designated as European zones. The market is dominated by build-to-rent tenements or semi- permanent, iron-sheet-constructed, single-roomed housing, which account for approximately 69.5% of housing for households in Nairobi and are mainly situated in the dense eastern area of the city. Various attempts have been made to address the poor access to housing and general quality of living conditions in urban areas in Kenya. These attempts often bear little or unsustainable results, raising questions about the effectiveness of the interventions or rigour in understanding the underlying causes. A gap therefore persists in understanding affordable and scalable solutions to improving the housing reality in Nairobi. Suggestions of a policy shift from middle income home ownership to regulated low income build-to-rent models have been made. This study examines the modes of financing, constraints in formal financing and perceptions of investors in the housing sector in Nairobi. Its purpose it two-fold. First, it seeks to understand the source of financing for housing developments in Nairobi since the classic financing mortgage model falls short by 95%. Second, it aims to contribute to the discourse on housing finance in terms of innovative financing for social housing as well as policy direction in private supply of low-income quality housing.