Nairobi County has paid out Sh28.8 million to 48 house owners at Old Pangani Estate paving the way for construction of 1,500 affordable housing units in the next two years.
Governor Mike Sonko, who handed out the cheques to the beneficiaries, most of whom have lived there since establishment in the late 1960s, said each tenant would receive Sh600,000 to facilitate relocation.
The cash is to enable the Pangani tenants to rent houses in Nairobi at an average of Sh25,000 a month for the next two years awaiting completion of the new high-rise apartments where each would be allocated three-bedroom units at a cost of Sh3 million repayable at Sh8,000 a month for the next 30 years.
"My administration is on course to construct 200,000 affordable houses in Nairobi in line with President Kenyatta's Big Four agenda. Phase One of the project will kick off in Pangani Estate this month, where 1,500 affordable housing units will be constructed in the next 10 months," he said on Twitter. He did not reveal the contractor.
This redefines mortgage rules where the tenants -- most of them in their late 50s and early 60s -- will benefit from the government-fronted Affordable Housing Programme in which they are expected to pay Sh144 million. Traditionally, the mortgage repayment period is pegged on a worker's remaining working tenure with a cap of 60 years when most receive a lump sum payment for retirement and are presumed to be unable to service mortgages.
But current changes introduced new pension schemes have seen a majority of Kenyans receive part of their retirement perks with the rest placed in a pensions scheme that guarantee them a monthly stipend for life.