Business Daily (Nairobi)
16 November 2009
editorial
Property developers in Kenya appear resigned to some home truths that are unique to this market.
The first is that land will not come in sizes that allow for development of many units, unlocking the benefits of economies of scale to be passed on to eventual buyers.
Individual ownership and subdivision of land to small units, some below the minimum 0.05 of a hectare (50 by 100 in common parlance) needed to qualify for title deed have conspired to ensure this.
This shortage was recently brought home by the government's own search for a portion on which to set up the country's first ICT park and digital village around Athi River.
The second is that when vast swathes of land are available they are likely to be Siberian in nature; far from civilisation, exposed to the elements and lacking in basic facilities like roads, water and sewers.
Before the developer can embark on the core business of construction, laying of physical infrastructure takes up resources, at times more than is committed to the venture itself.
Undaunted, developers soldier on with the knowledge that incidental costs will have to be passed on to home buyers.
The growth of informal settlements points to a seminal failure by the central and local governments to think beyond the bread and butter issues of today and plan for the next generation of city residents.
Not that it has always been like this.
The concept of site and service schemes started soon after Independence collapsed along the way and many of the youth teeming Nairobi's streets would be forgiven for not knowing that this was the origin of estates like Dandora, Riruta Satellite and Makongeni in Thika.
In a nutshell, site and service schemes entail the municipalities setting aside land within a commutable distance of the central business district, laying essential infrastructure and inviting developers to construct houses.
It is a concept that physical planners need to revisit urgently if the country's rapidly growing urban population is to be housed in an orderly and humane way.
A lot of effort and money is now going towards slum upgrading but unless this is complemented by addressing the very causes of informal settlements, little will be achieved.
While the Nairobi Metropolitan Ministry had started off with gusto on partnership with big land owners within a 50 kilometre radius of Nairobi to restart the site and service schemes, little has been heard of the initiative since the change of guard at the ministry in April this year.
Efforts by home lenders and public utility companies hoping to enlarge their potential markets are commercial in nature and, with due respect, cannot achieve much outside a deliberate State sanctioned strategy to increase the stock of houses in the country.
While nearly 150,000 houses are required in the country's cities annually, less than a fifth of those are being completed with both commercial and individual developers blaming scarcity of fairly priced suitable land as a key bottleneck.
For years, land in Kenya has been used more as a speculative rather than a productive tool at all levels and the earlier this trend is curtailed the higher will be the chances of securing decent settlement for those living in cities.
After years of dishing out public land to individuals in exchange for political and other favours, the government and local authorities now have their work cut out in ensuring investors in housing and other sectors have access to well serviced and affordable land for development.
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