Kenya: High Construction Costs, Poor Planning Hindering Affordable Housing Projects

7 December 2023

Nairobi — High construction costs are hindering the success of affordable housing projects in Kenya, according to the latest report by the Architectural Association of Kenya (AAK) Built Environment Report.

The 2023 data shows that the cost of building materials has gone up from between Sh34,650 and 77,500 at the beginning of this year to Sh41,600 and 100,800 this month.

For example, the price of steel reinforcement bars went up from Sh140.6 per kilogram in December 2022 to Sh160.26 per kilogram in December 2023, representing a 14.29 percent growth.

Likewise, 50 kg of cement rose from Sh650 to Sh750 in the same period.

The devaluation of the Kenyan currency against major global currencies, in addition to a surge in land rates, is to blame.

"In urban centers like Nairobi, what was valued at KES 30.3 million has now risen to KES 190.4 million in 2023," said Florence Nyole, AAK President.

"These exorbitant construction costs, hinged on the cost of building materials and land, threaten the achievement of affordable housing," Nyole added.

Similarly, development control has emerged as a critical challenge for building industry professionals.

"The absence of essential planning and legal frameworks, such as local physical development plans, zoning regulations, Development Control Regulations, and Building Regulations, contributed to haphazard developments in urban areas," she said.

"For instance, the Nairobi Development Control Ordinances expired in 2014, and the zoning guidelines have been arbitrary."

AAK also surveyed members to gauge the efficiency of Nairobi, Mombasa, Kisumu, Nakuru, Uasin Gishu, Kilifi, Tharaka Nithi, and Kiambu counties in granting development control applications.

It found that delays in issuance of construction permitting was not due to systems or external factors challnges but human actions and oversights.

While 43 percent of AAK members in Nairobi noted an improvement in approval times, with an average of 8 weeks, 7 percent reported the most prolonged approval timeline, exceeding 32 weeks.

In Mombasa County, only 16.7 percent of applications received approvals, with 83.3 percent remaining unapproved.

In most cases, members have to provide facilitation to county officials for successful processing.

The engagement of consultants in the Affordable Housing Program has been AAK's focus since the inception of AHP under the Big Four Agenda.

With a total project pipeline of 838,876 units, the government has completed 584 units and launched 39,879 units, and some 34,355 units were waiting to be launched as of November 2023.

"While some of our members have volunteered to be consultants for the affordable housing project, there is still an issue when it comes to negotiation of the consultation fees for the work they are doing," AAK President noted.

"Feasibility studies also need to be done for the projects and we have given our comments on the same."

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