AVAILABILITY OF AFFORDABLE HOUSING FINANCE ON SUCCESS OF THE GOVERNMENT AFFORDABLE HOUSING PROJECT IN KENYA, A CASE STUDY OF NAIROBI.

FACULTY OF ENGINEERING SCIENCES AND THE BUILT ENVIRONMENT

A RESEARCH PROJECT SUBMITTED IN PARTIAL FULFILLMENT FOR THE AWARD OF BACHELORS DEGREE IN REAL ESTATE.

DEPARTMENT OF REAL ESTATE AND PROPERTY MANAGEMENT.

APRIL 2020

DECLARATION

I declare that this is my original research project and has not been presented in any other institution or university for any award.

Signature………………………………                  Date……………………………………………

Andrew Wabacha Mbaria

Reg. No. EARQ/00766/2015

This research project is submitted for examination with my approval as the university supervisor.

Signature………………………………                  Date……………………………………………

Mr. Linus Korir

Lecturer, Department of Real Estate and Property Management

The Technical University of Kenya

DEDICATION

This research project is dedicated to my family for their constant encouragement and moral support during the time of undertaking this study.

ACKNOWLEDGEMENTS

First, I thank God for seeing me through this whole period I undertook to complete this project. I also accolade my supervisor Mr. Linus Korir for his support and time taken to guide me during this period of research. I also appreciate the Chairlady of the Department of Real Estate and Property Management Dr. Sarah Gitau for her support and input.

TABLE OF CONTENTS

DECLARATION i

DEDICATION ii

ACKNOWLEDGEMENTS iii

LIST OF FIGURES vi

LIST OF TABLES vii

ABBREVIATIONS AND ACRONYMS. viii

ABSTRACT ix

CHAPTER ONE. 1

INTRODUCTION 1

1.1 Background to the study. 1

1.2 Problem Statement 4

1.3 Purpose of The Study. 5

1.4 Objectives of The Study. 5

1.5 Research Questions 5

1.6 Significance of the study 6

1.7 Scope of the study. 7

1.8 Limitations of The Study. 7

1.9 Organization of The Study. 8

CHAPTER TWO 9

2 LITERATURE REVIEW 9

2.1 Introduction. 9

2.2 Affordable Housing 9

2.2.1 Benefits of the affordable housing projects to the economy 10

2.2.2 Challenges faced in provision and access to affordable housing 11

2.3 Affordable Finance. 12

2.3.1 Kenya Mortgage Refinancing Company. 14

2.3.2 National Housing Development Fund. 15

2.3.3 Case Studies 16

2.4 Chapter Summary 17

CHAPTER THREE 19

3 RESEARCHMETHODOLOGY 19

3.1 Introduction 19

3.2 Research Design 19

3.3 Research Area 19

3.4 Target Population 20

3.5 Sample Size and Technique 20

3.6 Data Collection 20

3.6.1 Secondary data collection 20

3.6.2 Primary data collection 20

3.7 Data Analysis 21

3.8 Chapter summary 21

CHAPTER FOUR 22

4 DATA ANALYSIS PRESENTATION AND RESEARCH FINDINGS 22

4.1 Introduction 22

4.2 Status of the affordable housing finance (KMRC and NHDF) 22

4.2.1 Kenya Mortgage Refinancing Company. 22

4.2.2 National Housing Development Fund 23

4.3 Status of the government’s affordable housing project (Parkroad project) 24

4.4 Status of other high-profile projects under AHP 26

4.4.1 Pangani 26

4.4.2 Habitat heights 26

4.4.3 River Estate 27

4.5 Challenges Impeding Implementation of Government’s Affordable Housing Projects 27

CHAPTER FIVE 29

5 SUMMARY OF FINDINGS, DISCUSSIONS, CONCLUSIONS AND RECOMMENDATIONS 29

5.1 Introduction 29

5.2 Summary of Findings and Discussions 29

5.3 Conclusion. 30

5.4 Recommendations 30

REFERENCES. 32

APPENDICES 34

6.1 Appendix I: Letter 34

6.2 Appendix II: Consent Form 35

6.3 Appendix III: Interview Questions 35

LIST OF FIGURES

Figure 2:1: Concept of financial affordability of houses (World Economic Forum, 2019). 9

Figure 2:2: Mortgage amounts versus number of accounts 12

Figure 4:1: Parkroad housing project (ongoing construction). 24

Figure 4:2: Sale prices of housing units at Parkroad. 25

Figure 4:3: Extract of the Parkroad project information, 25

LIST OF TABLES

Table 41: Pangani housing project details. 26

Table 42: Habitat heights housing project details. 26

ABBREVIATIONS AND ACRONYMS.

KMRC : Kenya Mortgage Refinance Company

NHDF  : National Housing Development Fund

AHP     : Affordable Housing Project

RDP     : Reconstruction and Development Programme

CAHF  : Centre for Affordable Housing Finance

FHF     : Family Homes Fund

CAGR : Compound Annual Growth Rate

HOSP  : Home Ownership Savings Plan

MRC   : Mortgage Refinance Company

ABSTRACT

Affordable housing finance under this research  mainly revolves around the Kenya Mortgage Refinance Company (KMRC) and the National Housing Development Fund (NHDF) institutions which were formed for the purpose of providing affordable housing finance to the middle and low income earners in order for them to be able to acquire decent and affordable housing  through the government’s Affordable Housing Project under its big four agenda purposely for providing housing to Kenyans, in order to curb the ever growing housing need, with an aim of availing  500,000 affordable house units by 2022. This study seeks to assess the availability of affordable housing finance on the success of the government’s affordable housing projects as well as to know the roles and significance of the KMRC and NHDF on the government’s AHP and also find out the challenges facing the implementation of the government’s AHP. This research uses the Park road project (Ngara), in Nairobi as a case study, it being the flagship project under the government’s AHP. Data for this research are obtained from both secondary and primary sources; review of texts, reports review on the government affordable housing projects (online and print) and review of both published and unpublished government documents as well as interviews. The analyzed data is presented in tables, pictures and figures. The results and findings show how affordable housing finance is vital in the success of the government’s AHP as this will enable the middle- and low-income households be able to obtain mortgages at affordable rates that are below the current market rates as well with long payment tenures. This has raised the appetite for people on these projects as more people register for these homes. These are to be facilitated by the KMRC and NHDF. The study also reviewed literatures on relatable institutions in Africa to Kenya’s KMRC and NHDF on their operations, failures and success in order to make recommendations on best way of operations and policies that have worked and failed in these institutions in order to learn from them and  be able to formulate a structure that would be successful on its core purpose.

CHAPTER ONE.

INTRODUCTION

Background to the study. 

According to the Bill of Rights, every person has a right to accessible and affordable housing with reasonable standards of sanitation, water and other services like security. But in reality, majority of residents reside in dilapidated housing conditions. Urban populations are growing at a rate much faster than can be absorbed and managed, causing demands on services and infrastructure that massively outstrips supply, leaving majority of residents with few options but to live in slums in many emerging market cities (Noppen, 2013). According to the Ministry of Housing (Kenya), provision of adequate housing and attendant services especially for the poor remains probably the most elusive challenge for the government. (Noppen, 2013) further stated that, increasing access to high quality affordable housing has a profound impact, both for the individual and society at large. Yet, housing is a challenging and capital-intensive sector characterized by delays and regulatory difficulties and as a result it rarely gains the lime light to impact investors and social entrepreneurs.

According to a study conducted by (Gacheru, 2017) the process of project implementation, involving successful development and introduction of projects in the organization, presents an ongoing challenge for managers. He further stated that the project implementation process is complex, usually requiring simultaneous attention to a wide variety of human, budgetary and technical variables. Project implementation is the stage where all the planned activities are put into action, the project is produced and performance capabilities verified (Gacheru, 2017). To ensure high probability of project success, it is essential for the project team to undertake full assessment on it; to determine future possible mishap and come up with steps and measures to mitigate these anticipated issues. Funding being an important aspect behind the success of any and all projects; is the means by which the capital required to undertake a project, program or portfolio is secured and then made available as required. Organizations require finance for both short-term medium and long-term requirements and financing is usually matched with their funding requirements. Long-term finance (longer than one year) is usually used to fund capital investments in fixed assets and other long-term projects. Short-term finance (shorter than one year) is usually used to fund the organization’s requirements for working capital (Gacheru, 2017).

The gap in decent affordable housing extends virtually around the globe, exacting a large social and economic toll on both developing and advanced economies, affecting both poor and middle-income citizens (Mckinsey & Company, 2014). The results are seen in the squalor of Brazil’s favelas, the lack of sanitation in the slums of Mumbai and the homelessness on the streets of Los Angeles as well as in Kibera and Mathare slums in Kenya. McKinsey estimated that globally, about 330 million urban households live in substandard housing whose costs exceed 30% of income, with others consuming as much as 70% of income in high cost cities.

In China, low-rent public housing project is provided by the government to low-income urban household, while commercial housing is provided in the market to meet the needs and demands of high-income families as the top 15% of the economic spectrum that have access to mortgage financing (Wang, 2011). This has led to improved housing conditions. This housing reform has resulted in a vigorous and fast-growing urban housing market and greatly improved housing conditions for urban residents, as the floor area per capita in urbanized areas increased from 6.7 square meters in 1978 to 28.3 square meters in 2007, and the home ownership rate reached to 82.3% in urban china in 2007 (Man, Zheng, and Ren, 2011).

Singapore is said to be a country with one of the best housing solutions in the world (Cytonn, 2018). A study conducted by (Cytonn, 2018), stated that in 1960, just after acquiring independence, Singapore had a cumulative housing requirement of 147,000 units for the 10-year period that ended in 1969 for a population of 1.6 million people, which was growing at 6.4% per annum and the private sector only had the ability to provide 2,500 units per year and at price levels out of reach for the low-income segment.  The government, therefore, put in place policies and strategies to promote home-ownership for its residents. Currently, according to the World Bank, 80.0% of Singaporeans live in houses built by the government, through the Housing Development Board (HDB) (the equivalent of the National Housing Corporation in Kenya), with 90.0% being owner-occupied, yet when they attained self-government in 1959 only 9.0% lived in public housing (Cytonn, 2018).

South Africa has a large housing deficit and need. Its government has made notable efforts to address it, resulting to construction of 2.8 million units by 2015 which is approximately 133,000 units annually (Cytonn, 2018).  This contributed to the housing deficit declining from 3 million in 1994 to 2.1 million units as at 2018. Measures taken by its government include; subsidies to low income populations through the Reconstruction and Development Programme (RDP) that saw individuals earning a gross income of USD 295 (or less) qualifying for subsidies worth USD 13,515 (Cytonn, 2018). Subsidy beneficiaries received a freehold title to a 180-250SQM plot with a free 40SQM structure; this is according to Centre for Affordable Housing Finance Africa (CAHF). Another measure is through the access to finance for home purchase with a 30.4% mortgage to GDP ratio, having the highest mortgage penetration in Africa driven by, relatively low lending rates with a Monetary  Policy Rate of 6.8% and average lending rates of 10.3% per annum, presence of a secondary mortgage market with the first residential mortgage-backed securitization being issued in 1999 and currently about 5.0% of the outstanding mortgage loans are securitized, longer tenors by the Government Employees Scheme providing 30-year mortgages, growth of pension-backed housing loans that enable employees to obtain home loans with their retirement fund savings as security, and a relatively high private credit bureau coverage at 64.4% of adults compared to Kenya at 30.4% (Cytonn, 2018).

In Nigeria, half its population resides in slums. Estimates on output in the formal housing sector range from 100,000 units per annum to an optimistic 200,000 units which only covers a part of the minimum 700,000 units required annually to meet the continuously growing population (CAFH, 2019). As part of the government efforts to deal with this housing situation in the country, the Family Homes Funds (FHF) was created in 2017, whose main focus is provision of housing for low income earners as part of the government’s social intervention program. Since its conception, FHF has delivered approximately 3700 new homes, created 20,000 employment opportunities and helped 5000 families. It has also signed a framework agreement with Echostone Nigeria Limited to develop 200,000 units (CAFH, 2019).

Housing project success relies greatly on how it is financed. According to (Gacheru, 2017), 7 out of 10 government housing projects suffer delays in their implementation. He further discovered on a study carried out by (Kaliba, Muya and Mumba, 2009) that majority of government housing projects in reference to Zambia were not properly implemented due to, construction faults, delay in payments and poor planning.

Kenya’s housing challenge is extreme. The average price for an apartment in the capital city of Nairobi is currently KES. 11.58 million up from 5.2 million in December and there is no home on the formal market below KES. 2 million, a level that is still completely unaffordable to low income population (Noppen, 2013). This has influenced the government to make an effort in provision of affordable housing to its people which has been incorporated in its big four agenda, with an aim of supplying the progressively growing demand with 500,000 new affordable homes. UN-HABITAT defines affordable housing as “housing which is adequate in quality and location and does not cost so much that it prohibits its occupants from meeting other basic living costs or threaten their enjoyment of basic human rights” (UN-HABITAT, 2011). Implementation of such project is dependent on key factors that influences its implementation and success, such as funding. For this study, affordable housing finance will be reviewed.

Problem Statement

According to (Habitat for Humanity, 2019), the housing deficit in Kenya stands at 2 million and continues to grow at a rate of about 200,000 units a year. There is a proliferation of informal settlements in urban areas with 61% of the urban population living in slums in overcrowded homes typically with only one room and no adequate ventilation (Habitat for Humanity, 2019). This subjects the families to risk of contracting diseases like malaria and other water-borne infections and jigger infestation. The most vulnerable and susceptible to this being women and children in particular.

In line with the devolved government system, supply of housing is a duty to be met by county government. Lack of competence and proper coordination at this level can suppress supply of housing.

A further study conducted by (Gacheru, 2017) on determinants of successful delivery of housing construction projects in the Ministry of Housing Nairobi (Owoko, 2013), found that funding was a critical factor in the success of a public project implementation and that such projects must have clear funding structures for the projects to succeed. Involvement of people who stands to benefit from the project is paramount to their implementation. Also, stakeholder involvement helps in avoiding future predicaments when done proactively rather than when an issue arises and responded to. And at the completion of the project, it fully serving its purpose is through solving the problem it was mainly put up for is in this case considered as success. The uptake of these homes is highly dependent on availability of affordable housing finance, which if available will ensure 100% success of the project as success of any project is reflected by how best it has served its purpose. This will in turn increase the affordability of acquiring a home.

The affordable housing project is a milestone project that is slowly becoming a reality. it will have positive impacts on the social and economic aspects of the country. Its success is determinant on key factor to be examined by this study. But there lies an information gap on this, which spikes the urge and need for study.

Smooth and efficient implementation of the government affordable housing project remains a huge task despite its efforts in delivering decent housing to its people, and this is due to a number of factors that influences the success of any given project i.e. with relation to this study; availability of affordable housing finance.

Purpose of The Study.

The main purpose of this study is to investigate the availability of affordable housing finance on the success of government’s affordable housing project for Kenya, Nairobi.

Objectives of The Study.

The objectives of this study are to;

To establish the roles and purpose of the KMRC and NHDF in the government affordable housing project.

To investigate how affordable housing finance contributes to the success of the government’s affordable housing projects.

To assess the challenges facing implementation of the government’s affordable housing project.

Research Questions

The research questions of the study are

What is the role and purpose of the KMRC and NHDF in the government affordable housing project.?

How does affordable housing finance influence the success of the government affordable housing projects?

What are the challenges impeding the implementation of the government’s affordable housing project?

Significance of the study

The outcomes of this study would be of great importance as it would assist the government to assess performance of its affordable housing projects that maybe helpful in proper decision making as well as to the financial institutions. It would further aid the government through assessment of successful projects by other nations internationally to be able to emulate and implement working policies and strategies in ensuring success of projects of its own. With regards to financial and mortgage institutions, it would assist them in coming up with packages and financial solutions and policies that accommodate almost all if not all income brackets willing to uptake financing/mortgages. It would additionally encourage these institutions to partner with the government in its various housing projects in offering loans and financing at affordable rates and affordable payments plan to all individuals.

The findings would also be useful to the stakeholders involved who will be able to assess performance of the project. Understand better the influence of funding to a project for better management of the resource, with it being a major determinant of whether a project is successful or not.

The study will be able to establish how the project in the long run impacts the economy of the country and the livelihood of the people seeking to benefit and to what extent it meets the ever-growing housing need and demand of the country. In addition, for the people seeking to benefit, they will be able to comprehend the importance of such projects and how it seeks to impact their social lives as everyone has a right to a proper housing.

The results of this study would also be aiding to the Ministry of Land, Housing and Urban development in comprehending the factors that steers towards the implementation and success of government affordable housing project for Kenya and also device countermeasures that would ensure their success.

The study results may also provide platforms for future further research.

Scope of the study.

The main scope of the study will be within the boundaries of Nairobi County. The various affordable housing projects within the county would be assessed to determine how availability of affordable housing finance influence the success of government affordable housing projects in Kenya. Affordable housing finance and need for affordable housing would be used as variables of study. Time frames between start and completion of the projects, hiccups experienced during the project cycle with regards and relation to the main purpose of the study will be looked into. The people being involved, where the selected sites are used to develop the projects. The impacts to them before (demolitions, relocations), during (job opportunities) and after projects completion. The financial institutions involved behind these projects, international and local and their roles and significance i.e.; Kenya Mortgage Refinancing Company (KMRC) and the National Housing Development Fund (NHDF).

Population of this study would be the units put up or being put up, where the people involved in these projects would be the respondents.

Limitations of The Study.

The affordable housing project being a government project, extracting needed information may be slow with regards to the allocated time frame of conducting the study, as relevant sources may not be always present. Appointment meetings to be set and purpose of research assured to be used for academic purposes only.

Another is the non-probability of accessing relevant data based on the study goals. This limitation may evolve from the bureaucratic nature of the government as due to this nature may operate on closed systems where information that is labelled sensitive may not be availed easily to the people. To overcome this, the researcher will seek consent from relevant target sources to be permitted to carry out the study at the Ministry of Lands offices for academic purposes only.

Respondents maybe unwilling to give feedback needed and to mitigate this, the researcher will establish a rapport with them assure them of their anonymity and the significance of the exercise being conducted.

Organization of The Study.

The research is organized in five chapters. Chapter one covering background to the study, the problem statement, purpose of the study, objectives, research questions, the significance of the study, scope and limitations of the study. Chapter two covers the literature review on affordable housing, affordable housing finance and theories with relation to the study. Chapter three covers the research methodology. Chapter four presents the research findings and records of data. Chapter five provides the discussion and summary of findings on the research as well as recommendations.

CHAPTER TWO

LITERATURE REVIEW

Introduction.

This chapter reviews literature by other scholars with close relation to factors influencing implementation of government housing projects and projects in general. Availability of affordable housing finance on success of affordable housing projects in Kenya will be reviewed.

Affordable Housing

As stated earlier, (UN-HABITAT, 2011) defines affordable housing as “housing which is adequate in quality and location and does not cost so much that it prohibits its occupants from meeting other basic living costs or threatens their enjoyment of basic human rights.” It is recognized by the constitution under article 43(1)(b) that every person bears the right to accessible and adequate housing with reasonable sanitation standards.

The notion of affordability is not only about being able to afford to buy or rent a house, but also being able to afford to live in it (World Economic Forum, 2019). Affordability does not revolve around expenses relation to operations and maintenance, it goes beyond that to consider costs of transportation, other services and infrastructure.

Figure 2:1: Concept of financial affordability of houses (World Economic Forum, 2019).

Source: WEF Making Affordable Housing A Reality In Cities, 2019.

Production of housing units is currently at less than 50,000 units annually, well below the target number (200,000 housing units annually), culminating in a housing deficit of over 2,000,000 units with nearly 61% of urban household living in slums and the deficit continues to rise due to fundamental constraints on both the demand and supply side and its exacerbated by an urbanization rate of 4.4% equivalent to 500,000 new city dwellers every year (World Bank, 2017). In recently concluded population census (2019), the country’s population was estimated at 47.6 million, with 26.6% of population residing in urban areas (CAHF, 2020). These figures reflect the high need for housing to meet the current housing status in Kenya. Kenyans in urban area spend a considerable part of their income on rent which may tally up to 40% of their income which is above the recommended 30%.

With this current state of housing in the country, the government came up with the 500,000 affordable housing program that seeks to meet the housing need and demand which will be implemented over the next 5 years (as from 2018) being part of the Big 4 Agenda. And apart from the delivering of homes, the affordable housing project is expected to have positive impacts on the broader economy.

Benefits of the affordable housing projects to the economy

With making Housing more affordable to Kenyans, it will in turn boost economic growth for the country both at national and county levels.

An estimate reported in the Affordable Housing and Economic Development, 2019 indicates that the contribution of real estate and construction to GDP (Gross Domestic Product) will increase from the current 7% to 14% by 2022. Aside from that, the increase in construction activity can become an important source of revenue through the processing of permits, approvals and other related activity and in relation to that, with regards to the “housing multiplier effect”, for every USD 1 invested between USD 1.5 and 3 is induced in the economy.

With the increased construction activity, this automatically leads to creation of employment opportunities with construction of housing being labour intensive. With reference to the Affordable Housing and Economic Development report, labour can capture up to 10.5% of the value created on the spend on affordable housing. And an estimate done in the report shows that for every constructed unit, 3-5 new jobs are created and up to 8 indirect jobs created per unit.

Aside from that, the project will effect to the formalization of the informal sector. Jua Kali services will be outsourced through the ringfencing strategies, to contribute to the project. The government is set to procure 3 billion worth of orders for doors and windows from the jua kali sector.

Provision and access to housing is still a challenge to home buyers but also suppliers.

Challenges faced in provision and access to affordable housing

Large percentage of Kenyans earn low incomes which makes it difficult for them to afford decent housing. For instance, for one to purchase a standard 3bedroom affordable home costing KSH. 3,000,000 using a mortgage .at the current average rates of 13.6% and a tenure of 12years, they have to earn a minimum monthly income of KSH. 106,000 in order to pay monthly instalments of KSH. 42,359 (Cytonn, 2019).

Another challenge is increase in prices of properties which continues to escalate. Which is induced by the rising demand for housing brought about by the high urbanization rate of 4.3% and population growth rate of 2.5% (Cytonn, 2019). High property prices are also brought about by the increase in production cost (high cost of land acquisition and construction) incurred by developers who inturn transfer the burden to home buyers who experience high cost of acquiring homes. House prices in Nairobi have been growing at a 5.1% 4year Compound Annual Growth Rate (CAGR) between 2014 and 2018, land prices at a 5.3% and 11.2% 4year CAGR in Nairobi suburbs and satellite towns (Cytonn, 2019).

Inadequate and high cost of funds is also a challenge. Regardless of the capping of interest rates, actual credit cos is seen to be high averaging at 18% brought about by additional administration fees that in turn shoot up the cost of development making it costly. In addition to that, banks have in turn reduced advancement of credit due to the interest rates capping.

In addition, inadequate infrastructure, which is contributed by poor planning and inadequate funding. There are limited access roads, power supply and sewerage services which developers have overcome in order to improve marketability, who in turn transfer these costs to home buyers. According to a study carried out by Centre for Affordable Housing Finance Africa 2015 and 2016, infrastructure contributes to approximately 15% of total development costs.

Affordable Finance. 

The main aim of affordable financing in any economy is; to reduce the borrowing cost and encourage supply of money, which eventually boosts economic activity. The housing problem are aggravated by low level of income of people. (CAHF, 2013), up to 75% of people live below the poverty line and about 3% are viable for a mortgage. Finance institutions are few and which, charge high rates of interests making them inaccessible by the majority. This is reflected in the minimal number of mortgage uptake in the country. With only a small number having access to financial services from these institutions shows how difficult it is for the majority of households to afford proper and decent housing. According to a report by Cytonn, 28^th April 2019 on CBK Bank Sector Annual Report 2017 showed that there were only 26,187 mortgage loans growing at an annual CAGR  of 5.7% since 2013 as the average mortgage size growing at a higher CAGR of 9.6% from 6.9 million in 2013 to 10.9 million in 2017 as presented in figure 2. This backlog is experienced in developing countries due to lack of adequate financial systems.

Figure 2:2: Mortgage amounts versus number of accounts

Mortgage Accounts 5-Year CAGR – 5.7%

Average Mortgage Size 5-Year CAGR – 9.6%

Source: Central Bank of Kenya (CBK)

In the Cytonn report it was further discovered, on a study done on a report by Kenya National Bureau of Statistics (KNBS), approximately 74.5% of the formal working population in Kenya earns Kshs 50,000 and below, monthly. With the average mortgage size in Kenya at Kshs 10.9 million, interest rates at 13.6% and an average tenor of 12-years, therefore, an average Kenyan household earning Kshs 100,000 per month (assuming it has two persons each earning Kshs 50,000) is required to commit monthly repayments of Kshs 153,905, which is unaffordable to this income class. However, using 40% of their gross income on monthly mortgage payments under similar market conditions, the household can afford a Kshs 2.8 million home.

The government developed housing incentives to trigger the housing markets supply and demand. Such incentives include; tax deductions for mortgage loans and expenditure for social infrastructure under the Income Tax Act, exemption from VAT for development of affordable housing for low income earners under the VAT Act, reduction of stamp duty fees on mortgages from 0.2% to 0.1% under the Stamp Duty Act, retirement benefits and low levies on housing bonds (Kieti, 2020). With the government in addition, recently proposing exemption of 1^st time home buyers from 15% tax relief and stamp duty payment in order to boost affordability and 15% corporate tax rate relief (which is half the statutory 30%) for developers providing a minimum 100 low cost housing units annually.

The Kenya Mortgage Refinance Company (KMRC) is the key component of the affordable housing project, whose purpose to increase mortgage affordability by enabling long-term loans at attractive market rates through provision of affordable long-term funding and capital market access to primary mortgage lenders such as banks and financial cooperatives (Cytonn, 2019). Aside from KMRC the National Housing Development Fund (NHDF) was established to bridge the gap of affordable housing by, offering affordable finance solution such as the nationwide tenant purchase scheme, serving as a saving plan towards the purchase of an affordable home through the Home Ownership Savings Plan (HOSP) and availing funds for affordable housing development through offtake  agreements that derisks private developers.

Kenya Mortgage Refinancing Company.

The KMRC is an initiative by the National treasury and the World Bank whose main objective is providing long-term funding to mortgage providers such as banks and mortgage institutions, in order to grow the mortgage market. This directly supports the affordable housing by ensuring the availability of finance for housing.

According to (Cytonn, 2019), a Mortgage Refinance Company (MRC) is a non-bank financial institution incorporated as a limited liability company to provide affordable long-term funding and capital market access to primary mortgage lenders such as banks and financial cooperatives. They simply act as middlemen between capital markets and mortgage lenders by creating liquidity for these mortgage lenders enabling them to offer long-term loans at low rates of interests. By this, the MRC mitigates the unavailability of affordable housing finance. Affordability is a major problem in accessing decent housing in Kenya as only 26.1% of Kenyans living in urban areas own the homes they live in, according to a study conducted by Cytonn, 2019.

MRCs operate by; taking loans as security by providing loans to mortgage institutions having the institutions’ mortgage portfolios as collateral or instead buying the mortgage portfolios from the institutions and issuing of bonds to the bond market to interested investors who purchase at margins above government securities.

 Benefits of the KMRC.

Increase in volumes of home ownership attributed by the increase in mortgage uptake, due to its affordability brought about by lenders offering longer payment periods of about 20 years average and lower affordable rates capped at 10% annually with regards to present proposals.

Improved lending policies that is reflected on the proposed interest rates of about 10% and longer mortgage tenures of 20years or more thus creating cost efficient market.

Growth of Kenyan mortgage market which will be attributed by the increase in number of mortgage uptake for financing home ownership due to the KMRC’s role in improving the mortgage institutions.

 Challenges facing the KMRC.

High cost of debt as investors would most probably demand high yields above 10% thus challenging the KMRC intentions of providing mortgages at 10% interest thus low-income earners lack access to mortgages.

Most mortgage institutions will shy from offering loans at stated terms of low interest and long-term periods thus affecting the KMRC’s operations due to insufficient funding.

Bureaucratic processes in government departments in issuance of titles thus reducing eligibility of mortgage acquisition thus hindering the KMRC’s operations and efforts to improve mortgage uptake.

National Housing Development Fund.

The NHDF under the control of the National Housing Corporation (NHC) as provided for in the Housing Act cap 117 was established under the Housing Act 2018 section 6(1) (Cytonn, 2019). It seeks to enable home buyers to save towards purchase of an affordable home through the HOSP.

The proposed model of raising funds is through (now) voluntary (previously was mandatory) tax deduction of 1.5% of employees gross income per month with employers expected to match as well, with the informal sector workers allowed to contribute as low as KSH. 100 minimum monthly amounts. The funds will be pooled into the housing fund and credited to each individual’s account. This housing scheme is however limited and only legible to first time home buyers.

The NHDF will also issue mortgage backed securities in local capital markets backed by tenant purchase certificates and the affordable housing units. An online portal was established, Boma Yangu where all parties, buyers and investors interact with the housing fund.in the housing fund scheme, individuals earning below KSH. 50,000 will be legible to the homes through tenant purchase schemes while those earning above KSH. 50,000 are set to purchase the affordable home units through low interest mortgage loans. With rates between 3-7%. In addition, a lottery system will be used to award homes to prevent contributors with financial strength from acquiring all units. For one to be legible; must complete Boma Yangu portal profile information, made regular contributions to the housing fund for at least 6 months and accumulated 2.5% of the home value one is interested in acquiring.

Case Studies

Nigeria National Housing Fund

There are a number of housing funds in Africa namely; Mchenga Housing Fund (Malawi), Cameroon Housing Fund, Nigeria National Housing Fund and Ghana National Housing Fund (recently introduced) all with similar objectives which is enhancing home ownership but all differ in terms of structure. Here the researcher will focus on Nigeria’s NHF as their structures are similar in nature to Kenya’s NHDF.

According to a study conducted by Cytonn (2019), Nigeria has a housing deficit of about 17million to 20million as at 2018 and requires at least 1million houses put up annually to meet the need, but its annual production clocks at 100,000 units annually which is less than adequate. The mortgage industry in Nigeria mainly targets the wealthy, leaving out the middle to low income earners as they cannot afford to acquire it due to its high repayment costs.

Due to this, the NNHF was formed through the NHF Act of 1992 inorder to provide affordable housing. It require/was mandatory to contribute 2.5% of one’s monthly basic salary; legible to persons earning USD 83 per month or more. The funds accumulated would be then made available to finance individuals in obtaining homes at rates of 6.0% (Cytonn, 2019). A new Act; National Housing Fund (Establishment) Act was established (2018), with targets of acquiring funds from more sources including; banks, insurance companies and pension funds administrators to contribute 10% of their annual profit pre-tax.

The Federal Mortgage Bank of Nigeria managed the funds to avoid its misappropriation. But despite this, in trying to achieve its set purpose, the fund has experienced setbacks which include;

Lack of transparency in funds management as, despite contributions made to the fund amounting to N2.4 billion monthly average, only 60,000 house units have been provided as at 2015 after 27 years of operations, out of its target 1million units annually.

Reduced government help towards the fund; no allocations has been made to it.

Contributors (institutions) fail to comply to contribution of funds despite it being mandatory.

Tanzania Mortgage Refinance Company

Various countries in Africa like Nigeria, Egypt and Tanzania have made steps in trying to improve their mortgage markets through formation of mortgage refinance institutions that have created positive outcomes as mortgage lending have increased in these respective countries due to its affordability. Tanzania’s MRC will be assessed due to the comparability of Kenya and Tanzania’s financial markets.

With regards to Tanzania’s National Housing Corporation, Tanzania is estimated to have a housing deficit of 3million units which grows annually by 200,000 units. This is propelled by the country’s huge population of about 56.9 million people recorded by World Bank as at 2018. This figure is expected to double by the year 2050, calling for the need of the housing crisis to be met. This fueled for the formation of TMRC in 2011 with the main purpose of enhancing mortgage affordability.

Mortgage to GDP ratio has grown from zero to 0.3% as at 2018 with mortgage loans amounting to a total of KSHS. 15billion as at 2017 from KSHS. 4.9billion (2012), recording a CAGR growth of 34% within the span of 5 years (Cytonn, 2019). This has been achieved due to; affordable interest rates, increased awareness on TMRC operations and longer mortgage tenures. Despite this positive growth and progress, some key challenges still hinder TMRC’s operations, which include;

Bureaucratic processes in land transaction processes.

High cost of land

High poverty levels of people still making mortgage affordability low.

Chapter Summary

This chapter has reviewed previous literature on researches and studies conducted by other researchers and scholars with close relation to this study which is the availability of affordable housing finance on the success of the government’s affordable housing projects in Kenya. Project success is met on conditions where a project is considered to be completed in/on time, within the set budget and in this case with regards to the project serving the purpose in which it was intended.

Availability of affordable housing finance purposely for these government affordable homes projects greatly determines the success. As affordable finance guarantees mortgage affordability which will then increase volumes of mortgage loans in the country as more people will acquire them in order to be able to secure one of these housing units for themselves. Main target being the middle to low income households. Mortgage affordability will be enhanced through formed institutions namely the KMRC and NHDF. Their formation, purpose and operations have been looked at with close review of select case studies in Africa; countries with similar institutions (their achievements and failures) that are already in practice and have close similarities to Kenya’s own institutions.

CHAPTER THREE

RESEARCHMETHODOLOGY

Introduction

In this section, the research methodology and research design implemented during the study will be highlighted. This chapter further sheds light on the approaches employed to collect, analyze, interpret and communicate data, information and results respectively.

It also stipulates the research design, target population, representative sample, data collection and analysis methods.

Research Design

The research design glues the research project together as it provides structure to the study showing how all parts of the research seeks to address and answer the research questions. This study employed the case study research design. Which as described as Summers, (2008), is an empirical research method used to investigate a contemporary phenomenon, focusing on the dynamics of the case within its real-life context. This design is useful because it provides the researcher with a chance to gather data, using different methods such as, survey, carrying out interviews and experiments all within the study.

Research Area

This research is focused on the availability of affordable finance on success of the government affordable housing project in Kenya (Nairobi). It was estimated by World Bank (2017), 61% of urban households live in slums and continue to rise due to fundamental constraints on both demand and supply side which is exacerbated by an urbanization rate of 4.4%, equivalent to 0.5 million new city dwellers every year.

This resulted to the government coming up with the 500,000 affordable homes project which is among its big 4 agenda which seeks to cater for the growing housing need and demand in the country which will be put up all over the country in respective counties. With the current housing deficit in the country is over 2 million units and current production of units is less than 50,000 units per year. In Nairobi, these housing projects are set to be put up in; Parkroad (Ngara), Shauri Moyo, Jenanjee and Parkroad being the first and flagship project whose phase one is already completed and ready for occupancy.

Target Population

For a survey, the target population is the entire setoff units for which the research data are to be used to make inferences (Lavrakas,2008). They are thus, the units for which the findings of survey are meant to generalize.

The population for this study will be the various affordable housing projects by the government in Nairobi county and residents surrounding; Parkroad (Ngara Estate), Jevanjee Estate (Ngara), Makongeni Estate, Shauri Moyo/Starehe, Kibera, Mariguini and Kambiu Projects.

Sample Size and Technique

The technique employed was purposive sampling, that is also known as subjective or selective sampling, where the researcher relies on his/her own judgement when choosing population to participate in the study.

The Parkroad Affordable housing project being the only one that has been completed (Phase 1 with 228 units complete out of the proposed 1370) and it being the first and flagship project in the affordable housing project was selected for carrying out the research in representative to the other projects within Nairobi county that are underway.

Data Collection

Here steps in gathering information from reliable sources relevant to the study being undertaken in order to obtain answers by evaluating the results.

In case study, it entails the careful and in detail observations of the unit which can be an institution, person, group or community (Kothari, 1990).

Data collection instruments to be adopted are both secondary and primary.

Secondary data collection

Methodology used is the review of texts, reports review on the government affordable housing projects (online and print) and review of both published and unpublished government documents.

Primary data collection

Researcher will be required to have the knowledge of present situation on site, so site visits will be made, aside from that; observations, interviews and discussions with experts in housing directly involved with the affordable housing projects.

Data Analysis

The data analysis employed in the study are descriptive content analysis which is effective and a powerful technique in analyzing significant aspects of the study’s collected data through interviews and surveys as well as text documents.

Chapter summary

This chapter outlines the research methodology describing the procedures and techniques to be used to undertake this research. It provides with the research design and area of interest, target population, sample design and technique. Methods of data collection and their analysis are also laid out.

CHAPTER FOUR

DATA ANALYSIS PRESENTATION AND RESEARCH FINDINGS

Introduction

This chapter analyses and presents research findings of the study. It tackles each of research questions with analysis of information and data obtained. The purpose of this research was to assess the availability of affordable housing finance on success of the government affordable housing project in Kenya; Nairobi. Descriptive content analysis was employed.

Status of the affordable housing finance (KMRC and NHDF)

Kenya has fairly the largest commercial banking industry, among the East African community; with 43 commercial banks and 2 mortgage finance institutions with only 77.5%of all mortgage lent coming from 6 institutions (CAHF, 2019). This is attributed to the reluctant nature of most of these institutions to grow their mortgage portfolios because of its expensive nature contributed by complex collateral requirements and minimal access to capital markets; reflected by the low number of registered mortgage loans clocking at 26,187, growing at a CAGR of 5.7% since 2013 states the Central Bank of Kenya’s most recent survey on mortgage lenders (December, 2017). Due to this nature, the Central Bank rate was lowered in 2018 to 9.5% with the aim of reducing borrowing costs and boosting money supply. But after implementation of the interest rate cap, bank credit to the private sector dropped, causing slow growth in private sector as commercial banks became less willing to offer loans thus businesses became unable to invest due to the limited credit. This later championed for its repeal and was removed in November 2019. However good the intentions of the interest capping were in theory, on application caused reduction of credit and weakened the monetary policy’s effectiveness.

Saccos rates of interest remain at 12% low but highly constrained by their short-term nature of their deposit liabilities and tenures of not more than 5 years (CAHF, 2019).

Kenya Mortgage Refinancing Company.

KMRC was formed as an initiative whose main function is enhancing mortgage affordability by enabling long-term loans at attractive market rates through provision of affordable long-term funding and access by primary mortgage lenders to the capital markets (CAHF, 2019). The Kenyan government owns 20% stake the other 80% stake shared by 11 saccos, 8 commercial banks and a micro-finance institution. Initial startup loans for the KMRC have been provided by the African Development Bank, sum of 100 million USD and the World Bank, a sum of 250 million USD with the government having an aim of Kenyans acquiring loans from primary mortgage lenders at  rate less than 10% (only legible to individuals earning less than ksh. 150,000 monthly salary) since it’s going to incur all foreign currency risk. Once in full operation, mortgage loans are set to spike from the current 26,000 up to over 60,000 by end of project period which is 2022, with loans being capped at ksh. 4 million in Nairobi and ksh. 3 million in the other counties (CAHF, 2019).

Kenyans will from September 2020 be able to access mortgages at a set rate of 7% annually. The KMRC will in turn avail capital to financial institutions at an annual rate of 5% for onward loaning to individuals at the set 7% which is half the current market rates states Joy Makena on an article on Construction Kenya (March, 2020).

National Housing Development Fund

The NHDF is currently not in full operation as contributions are expected to be made in continuity, as certain regulations are put in place since the High court has suspended implementation of the housing levy which is 1.5% of employees’ monthly salary to the fund. With relation to this, contributions made are projected to accumulate up to ksh. 55 billion annually from both employees and employers. With each individual’s contributions monitored in one’s own personal home ownership savings plan. If it occurs that an individual isn’t able to acquire a house, his/her accumulated contributions will be paid back 15 years after first time of contribution or upon retirement and the contributions will grow at a rate of interest yet to be set.

Individuals must register through the Boma yangu online housing portal by recording a range of required information like; name of employer, size of household, income earned (total household income) and location of housing they prefer and to have been making continuous uninterrupted monthly contributions for 6 months to be eligible and additionally, to have contributed 125% deposit of the value of the type of home preferred and will in turn receive 87.5% financing under the tenant purchase scheme.

The NHDF has received and accumulated up to a total of ksh. 150 million from 14,800 voluntary contributors to the scheme through the housing portal. A total of 298,889 applicants had registered as at June 29^th 2020 (Boma yangu online, 2020), a growing number reflecting high interest and need for this government’s AHP projects.

Status of the government’s affordable housing project (Parkroad project)

The Parkroad project (Ngara) is the first project under the affordable housing program to break ground. Located on a 7.9-acre piece of land, with close proximity to the CBD. It is set to avail 1370 housing units. This project is put up on state land and estimated to cost up to Ksh. 5billion, contracted to a Chinese based construction company China State Construction Engineering Coorp, under a design-build-finance model (financing from Chinese government). Currently, phase one of the project is complete which constitutes 228 housing units out of the 1370 which is set to be fully complete by February 2021.

Figure 4:1: Parkroad housing project (ongoing construction)

With reference to the Boma yangu online portal, the unit’s prices are set to be as (in kshs.);

30sqm (1bedroom) – 1,500,000

40sqm (2 bedroom) – 2,000,000

60sqm (2 bedroom) – 3,000,000

60sqm (3bedroom) – 3,500,000

80sqm (3 bedroom) – 4,000,000

Figure 4:2: Sale prices of housing units at Parkroad.

Source: boma yangu Online housing portal

Figure 4:3: Extract of the Parkroad project informationSource: AHP Brief Presentation, Feb 2019, Page 19

The Parkroad project will further include; a running track and other recreational facilities. No social housing is set to be provided in this project.

 Status of other high-profile projects under AHP

Pangani

Pangani project launched under the AHP is a redevelopment of a 5acre site belonging to city county of Nairobi with 48 units and is set to be redeveloped into 1434units by Technofin in partnership with Stima Sacco (CAHF, 2019). Buyers of this project are set to be members of the Stima Sacco.

Table 41: Pangani housing project details.

Source: CAHF, November 2019, page 16

Habitat heights

This is a development that is a joint venture between UN Habitat’s Habitat Housing Cooperative Society (contracting the land) and Singapura Developers based in Singapore (Shah CAHF, 2019), delivering 8800 housing units with other complementary developments on a 77.5acre land.

Table 42: Habitat heights housing project details.

Source: CAHF, November 2019, page 17

River Estate

This is a development located in Ngara that was launched in March 2019. It’s not set to be under the PPP framework of the AHP. It’s a project set on a 5.7acre land (owned by a private family). The developer is a Chinese based developer Erdemann Properties; with the county government waiving all building approval fees for the project (Shah CAHF, 2019; Capital Fm, 2019).

This project is set to deliver 2,270 units of 1 and 2bedrooms over eight blocks of 34 stories each with the developer aiming to sell the units to the open market.

Challenges Impeding Implementation of Government’s Affordable Housing Projects

Shortage of finance. This occurs when investors foresee risks of high cost of investment with longer term for returns on the government affordable housing project that is in direct competition with other real estate investments; commercial spaces and luxurious high end properties that are considered more lucrative and reap bigger and faster benefits thus investors divert their financing on such opportunities.

The NHDF has incurred some hiccups due to its initially proposed methodology of raising money to its fund through the 1.5% taxation of every formal employee’s monthly salary as it was to be mandatory but then became voluntary after it was contested in court. This has affected its operations as it is unlikely to be able to raise the capital it intended to after the high court barred statutory contributions. Since out of the almost 300,000 applicants of the houses, according to an article by James Baraza, only 14,800 people have made their contributions and out of those, only 0.1081% of those have paid at least 12.5% of value of house they applied for.

The ongoing acquisition of sites for development and redevelopment of select estates have brought about the challenge of relocation of individuals initially at these selected sites to pave way for construction of these projects. These exercises have been faced with hostility and resistance from the people being relocated, with some claiming they were not fully informed and consulted regarding the resettlement, with doubts of the conditions of 1^st consideration of award of these houses once construction is complete.

Poor land governance that is caused by the contradicting land tenures, out of date land registries and outdated land titling systems. Making security of land always in question bringing in complications on property rights. This hence end up discouraging potential investors. This coupled with lengthy and expensive process of acquiring land, thus less support for this affordable housing projects leading to its slow and delayed implementation.

CHAPTER FIVE

SUMMARY OF FINDINGS, DISCUSSIONS, CONCLUSIONS AND RECOMMENDATIONS

Introduction

This chapter presents discussions of key data findings, conclusions made as well as recommendations. It presents conclusion drawn with respect to the objectives of the study.

Summary of Findings and Discussions

The research aimed to establish the availability of affordable housing finance on success of the government affordable housing project in Kenya; Nairobi. The governments Affordable Housing Project is a milestone project, creating positive impacts but also with its own hiccups. It is well on progress and gaining traction with its first project put up at Parkroad (Ngara) already completed with 228 housing units as its phase one which are ready for allocation and occupation. Aside from this, many others are well on the way with Parkroad itself strides away from full completion. Other projects are awaiting full implementation due to varying reasons like, site relocation process of people on earmarked sites that could stall the projects due to the resistance faced by residents in respective sites. Aside from that challenge, another is that facing the NHDF, brought about by the court order that sought to stop the mandatory contribution imposed by the 1.5% housing levy on all employees’ monthly salaries. This has resulted to it not being able to continuously accumulate sufficient funds for the financing of the government’s affordable housing projects. Despite this a number of Kenyans still register on the online housing portal and numbers keep growing by the day with a select number still committed in making regular contributions, reflecting their continued interest in the houses with recorded individuals making voluntary contributions.

With the KMRC’s creation, it seeks to increase mortgage affordability through its set policies set to be offering long term financing at low affordable interest rates. It has as well received startup capital from the World Bank and the African Development Bank which strongly support the institution’s cause.

Despite challenges and mishaps faced during this project, it has recorded successes, with bringing positive impacts to the country’s economy, through the creation of jobs, recording up to 650 direct employment opportunities created for the Jua Kali sector. With the government also directing that 70% of all construction materials to be obtained in the local market.

Conclusion.

Availability of affordable housing finance is clearly a great determinant on the success of the government’s affordable housing projects. With existence of affordable housing finance which is promoted by the existence of the KMRC and NHDF will increase mortgage affordability mainly targeting the middle and low income earning families due to the favorable lending policies that operate with these finance institutions which are  long-term payment periods that stretch up to 20 years and low proposed interest rates of 10% or lower. Interest in the government’s affordable housing projects has since increased due to this. Public awareness has been created through forums held by these institutions where they educate the public on how they operate which has also spiked the interest of people on these projects and resulted to the increase in number of registered persons on the Boma Yangu online portal clearly indicating how the availability of affordable housing finance is a key factor in ensuring the success of the government’s affordable housing projects which is the provision of decent and proper housing mainly to the middle and low income earning households in Kenya.

Recommendations

The following recommendations were made by the researcher with respect to the above findings.

There’s need to refine the Kenyan law on stamp duty exemption to first time owners of homes under the government’s affordable housing program because this would be difficult to put into practice as it would require in depth analysis of individuals assets in order to establish if one is eligible to be exempted from stamp duty tax. Or rather decide to waive completely the payment of stamp duty on the government affordable homes once purchase.

There’s also need to refine the corporate tax reduction from 30% to 15% on developers seeking to avail minimum of 100 affordable homes within a year as this maybe difficult to achieve as development timeframe of projects from start to finish may take longer than a year as it maybe delayed because of a number of reasons like; slow approval processes of project and lack of financing. Maybe made more possible if the limited timeframe would be scrapped.

The NHDF should source more finance from other sources as the court curtailed its target source of funds.  Other possible sources maybe; national government including it to its budget in order to obtain a certain share revenue or taxes obtained from taxation of real estate or a percentage of it to be redirected to this fund. The NHDF may also put into consideration obtaining funds from the capital market.

In addition to this, the NHDF should strive to enhance transparency on its management of funds, award of houses and refund of funds to the respective contributors who wouldn’t have been able to secure themselves a home from the program.

REFERENCES.

AHP. (2019). Delivery Framework Overview: Affordable Housing Program Presentation.

Baraza, J. (2019). Only 60 Kenyans qualify for state low cost homes. Retrieved July 28,2020 from www.constructionkenya.com.

CAHF. (2020). Housing finance in Africa: Centre for Affordable Housing Finance in Africa (CAHF).

CAHF. (2019). Assessing Kenya’s Affordable Housing Market: Centre for Affordable Housing Finance in Africa (CAHF).

CAHF. (2013). Housing Finance Year Book: Centre for Affordable Housing Finance in Africa (CAHF). S.A.: Fin Mark Trust.

Cytonn weekly. (2018, April). Report on Kenya Mortgage Refinance Company (KMRC). Nairobi: Cytonn Investments.

Cytonn weekly. (2019, May). Report on National Housing Development Fund (NHDF). Nairobi: Cytonn Investments.

Gacheru A. N. (2017). Factors Influencing the Implementation of Government Housing Project for Kenya Police Service in Nairobi County. Unpublished MA Thesis: University of Nairobi.

Man, J. Y., Zheng and Ren. R. (2011). Housing Policy and Housing Market: Trends, Patterns and affordability. Lincoln Institute of Land Policy.

MGI. (October, 2014). A blueprint for addressing the global affordable housing challenge: Affordable Housing Full Report. McKinsey & Company.

Noppen, A. V. (2014). The ABC’s of affordable housing in Kenya.

Raphael, M. K., Robert, W. R. and Washington, O. A. (2020). Affordable Housing in Kenya: Status, Opportunities and Challenges. Africa Habitat Review Journal.

Republic of Kenya. (2019). How to Register and Apply for Affordable Housing. Nairobi: State Department of Housing and Urban Development. www.Bomayangu.go.ke.

Shah S. (2019). Construction financing in Africa’s affordable housing sectors: Testing the assumptions in Kenya’s Affordable Housing Program. Centre for Affordable Housing Finance in Africa (CAHF).

UNHABITAT. (2008). Affordable housing and housing finance in the face of the global financial united crisis nations human settlements programme.

UN-Habitat. (2011). Affordable Land and Housing in Africa. UN-Habitat.

Yanyun, J. M. Affordable Housing in China. Lincoln Institute of Land Policy.

Wairimu, L. W.  (2018). Evaluating the Effects of Access to Affordable Housing on Low Income Earners in Kenya. Unpublished MA Thesis: United States International University – Africa.

Wang Y. P. (2011). Recent housing reform practice in Chinese cities. Cambridge: Publisher Lincoln Institute of Land Policy.

World Bank. (2017). World Bank Annual Report 2017. Retrieved July 28, 2019 from documents.worldbank.org.

World Economic Forum (2019). Making Affordable Housing a Reality in Cities.

APPENDICES

Appendix I: Letter 

Dear Sir/Madam,

RE: REQUEST TO PARTICIPATE IN THE RESEARCH STUDY

This study is a requirement for the partial fulfilment for the Bachelor’s degree in Organizational Real Estate and Management. In order to accomplish my study, I am required to conduct a study on the availability of affordable housing finance on the success of government’s affordable housing project for Kenya (in Nairobi). I have identified you as my target source of information to aid in accomplishing my objectives by agreeing to an interview. The information gathered will be accorded with great confidentiality and your response will be highly appreciated.

I look forward to your response.

Regards

Andrew Wabacha.

Appendix II: Consent Form 

I………………………………………………………agree to take part in this research on the availability of affordable housing finance on the success of government’s affordable housing project for Kenya. I have been informed on the study to comprehension. Moreover, I am ready to withdraw from the study at any time without recursion and have been assured of my confidentiality.

Signature……………………………………………….

Appendix III: Interview Questions

1. What is your name?
2. What is your current job description?
3. What is your role in the AHP?
4. What role does your institution play/have in the AHP?
5. What is the operation structure of your institution?
6. What are your institution’s set objectives and goals (short-term and long-term)?
7. How does your institution aim to fix the shortage of long-term financing in Kenya’s housing market?
8. Who is your target market?
9. What benefits does your institution bring in financing for home ownership?
10. What and how many (if any) select financial institutions are in partnership with your institution?
11. What differentiates your institution from other mortgage lending institutions?
12. How does your institution seek to create/increase the affordability of finance for housing?
13. Does your institution only offer finance under the AHP?
14. What are the challenges facing your institution/ it anticipates to face? And what are the measures put to mitigate?
15. What are the responses/feedback (positive and negative) your institution has received from the public?