Summary

For nearly 50 years the Kenya Government housing policies have sought to [increasingly] enable low income households pay for and own a home in an urban area such as Nairobi. Various financing strategies have been applied towards this goal including subsidizing the cost of the housing unit or the cost of credit, increasing access to long term mortgage capital as well as providing social housing. These strategies have however repeatedly failed in making any meaningful impact on access to adequate housing for all as enshrined in article 43 of the Constitution of Kenya 2010.

In this brief we argue that this “one household – one housing opportunity” home ownership paradigm fails on two significant aspects:

​

1. It fundamentally assumes the willingness to pay for and live in affordable urban homes by the estimated one million Nairobi low income households.

   1. The policy is also blind to the reality of a private rental market in urban areas and does not seek to explain its persistence since independence.

We propose policy expansion beyond home-ownership paradigm to include interventions that stimulate institutional investment in a Lease – to – Build – to – Rent affordable housing framework while safeguarding the right to city for vulnerable groups.

Summary

Urban residents living in informal settlements in Nairobi pay a much higher price for house rent, water, electricity and other basic goods and services compared to middle and higher income residents of the City. This extra cost to the poor in accessing basic goods and services is termed as the poverty penalty.

Official statistics on poverty do not take into account the poverty penalty. This essentially underestimates poverty levels for the urban poor. Poverty penalty increases the risk of adverse cycles of poverty creating poverty traps and intergenerational transmission of poverty that is increasingly evident in informal settlements in Nairobi.

Policy actions to address urban poverty that ignore the poverty are often inefficient and ineffective.

Looking at it differently, the fact that slum residents pay a higher price, means that they are willing and able to pay the normal price for the basic services. This presents a unique opportunity in slum upgrading – there exists an economically sustainable path for basic service providers to extend provision to the urban poor.

Abstract

This study analyzes the financing aspects of the relationship between land tenure and access to basic services in Mukuru, one of the biggest slums in Nairobi, Kenya. The study challenges the premise that slums offer low quality services at an affordable cost, and instead estimates residents pay a premium. The informal service structure presents a vibrant untaxed economy which could be channeled towards the improvement of services. We suggest a framework to leverage land tenure changes by using a community approach as well as accessing the untaxed economy to provide improved collateral and financing for Mukuru residents.

http://search.proquest.com/openview/0ccb277bdb70406f3a31901b47cd7f61/1?pq-origsite=gscholar&cbl=436385

Abstract

Until recently, improving land tenure security has been an integral part of slum upgrading initiatives aimed at improving living conditions in urban slums. However, there is limited empirical evidence on whether slum dwellers find housing options with improved tenure security preferable and whether they can afford such options. This study identifies the causal effects of improving land tenure security on slum dwellers' preferences and abilities to afford alternative, upgraded housing options.

https://www.sciencedirect.com/science/article/pii/S0197397518312438