The Impact of affordable housing policies on household wealth in Kenya

Abstract

Affordable housing policies have gained increasing attention globally as essential instruments for enhancing the socio-economic well-being of lower-income populations. These policies aim to provide safe, adequate, and affordable housing options to those who might otherwise be unable to access such resources (Favilukis & Van Nieuwerburgh, 2023).In many developing countries, including Kenya, the housing crisis is a significant concern, with a large proportion of the urban population living in informal settlements characterized by inadequate housing conditions (Howell, Gibbons, & Ding, 2018).Addressing this issue through well-designed affordable housing policies can potentially transform the lives of millions, contributing to broader economic and social development goals. According to (Mutisya & Yarime, Urbanization and housing pressures in Kenya: Challenges and policy responses., 2019) Kenya’s urbanization rate has been rapidly increasing, with more than 30% of its population residing in urban areas as of recent estimates. This rapid urban growth has exerted substantial pressure on housing infrastructure, leading to a proliferation of informal settlements. These settlements are often characterized by overcrowding, inadequate sanitation, and lack of basic services, which undermine the residents' quality of life and economic productivity. The Kenyan government, recognizing the critical role of housing in economic development and social stability, has prioritized affordable housing in its national development agenda, notably through the Big Four Agenda, which includes affordable housing as one of its key pillars (Ndungu & Otieno, Affordable housing in Kenya: The Big Four Agenda and its impacts., 2020).