Paradox of city’s poor renting out affordable houses to the wealthy

At least six people were reported dead in Nairobi last Monday after heavy rains pounded the city, with informal settlements, or rather slums, being the most affected.

In the city’s Mukuru Kwa Reuben slums, one person died after being swept away by floods, with more than 500 residents being displaced in the different slums across Nairobi.

A short distance from the Mukuru slums stands the Mukuru Affordable Housing Project being developed on a 56-acre parcel of land, initially grabbed by private developers before it was recovered by the Ethics and Anti-Corruption Commission and handed over to the government in 2020.

This is the biggest single housing project being developed by the government, comprising 13,248 housing units made up of bedsitters (26 blocks of 5,616 units), 14 blocks of one-bedroom units with 3,024 units and 48 blocks of two-bedroom units totaling 4,608.

“We are targeting mainly Mukuru slum residents as we implement these key projects that are aimed at replacing slums across the country with decent housing units for the population,” said Benjamin Njenga, secretary, Urban and Metropolitan Development at the State Department for Housing and Urban Development.

It is part of the government’s affordable housing projects targeted for the poor, low- and middle-income earners, with eradication of slums across the country being at the centre of the government’s housing plan under social housing projects.

Other projects in Nairobi include Shauri Moyo, Starehe and Soweto in Kibra, with about 840,622 units in the pipeline across different parts of the country.

This initiative, however, faces a constant threat where the targeted population opts to rent out those decent houses and build shanties for themselves, defeating the whole purpose of the slum upgrading.

This is not, however, an issue that started recently. History documents such instances even as successive governments commit to the affordable housing agenda.

Kenya’s affordable housing history includes initial attempts at a national housing policy in the 1960s, followed by the National Housing Corporation in 1965.

The hope for many of the city’s urban poor to own affordable houses has, however, remained a pipe dream over the years as these projects continue to be infiltrated by deep-pocketed individuals.

They end up snapping up units, which they later rent out to the middle class as the poor continue to dwell in slums.

For instance, California estate in Nairobi’s Eastlands, or “Calif” as it is fondly known, was built in the 1960s, targeted at the poor in Majengo.

It was constructed after Tom Mboya, the former independence minister, lobbied the American government for decent housing for Africans who were living in mud and brick houses in Pumwani, Majengo.

The project was opened in November 1967 by founding President Jomo Kenyatta.

However, they ended up in the hands of the rich after allottees sold them.

The trend has continued to be replicated in similar projects over the years, spanning the late President Mwai Kibaki’s era, retired President Uhuru Kenyatta, and now President William Ruto.

The Sh3 billion Kibera People Settlement Development project (Kibaki flats)–a 900-housing project targeted at upgrading families from the slums, also ended up in the hands of the rich.

“My uncle rented out his unit and went back to the slum. Some people were bought out completely by the rich. They have turned the units into into rentals,” Mike Njenga, alias “Rasta”, a resident of Kibera Soweto, told the Star during a recent engagement at the Kibera Soweto project, being developed by Ruto’s administration.

He is among the 286 local youths employed at the project where the government is putting up 4,005 units, comprising single rooms, double and three-roomed houses.

Njenga is among those who have also been issued with a housing card as the government seeks to ensure legitimate locals benefit from the programme.

He is saving for a one-room self-contained house, which comes with a deposit of Sh60,000 and a total price of Sh600,000.

If he secures one, he goes into the rent-to-own plan, which will run for 15 years. However, he fears that he might not get the house once completed and could continue living in the corrugated tin-roofed house with a concrete fl oor in Kibera, where he pays Sh700 as monthly rent.

“I am hoping there will be a lot of transparency and the rich will not come push us out with their money,” Njenga said.

The National Housing Corporation boss, David Mathu said most slum dwellers targeted in house upgrading programmes relocated back to shanties, two years after being handed decent houses.

“Those are social challenges that do occur. In this particular project, we have observed that most of them rented the houses,’’ he told the Star.

Stingray Agutu, a manager at the Park Road affordable housing project, shares the same thought.

“We have homeowners who, for the love of money or something, have chosen to rent out their house, irrespective of who rents it, because we can tell there are houses within that estate where 15 to 20 people are living in one house.”

President Ruto’s administration has set an ambitious target of constructing at least 200,000 homes annually and one million units by 2027, in its quest to address the housing shortage in the country, where nearly 60 per cent of urban households live in slums, according to the World Bank.

There are approximately 2.5 million slum dwellers in about 200 settlements in the city, where the government owns all the land.

The government is developing the projects backed by the housing fund collected from a 1.5 per cent deduction from an employee’s gross salary and a matching contribution from their employer, making it three per cent.

According to Lands and Housing CS Alice Wahome, the deduction, which is a tax, does not guarantee one a home.

The government collects at least Sh65 billion annually from taxpayers to drive the affordable housing programme.

The kitty is being managed by the Affordable Housing Board, which receives applications, assesses them and allocates houses through the Boma Yangu platform.

CS Wahome has assured transparency in the allocation and that the government will lock out speculative buyers and buy-to-let investors preying on the housing units.

Once allocated, beneficiaries are required to pay a deposit, depending on the size of the unit, then go ahead to pay monthly instalments on a rent-to-own basis.

For instance, a studio apartment costing Sh640,000 requires a deposit of Sh64,000, with a monthly payment rent (rent to own) of Sh3,900.

A one-bedroom unit under the social housing segment has a monthly repayment of Sh5,350 after a 10 per cent deposit on the Sh960,000 total amount.

The affordable housing units have been placed under three categories– social housing, affordable housing units and affordable middle-class housing units, which fetch higher prices, with buyers allowed for a one-off payment if one has the whole amount.

Wahome said her ministry will not allow abuse of the process and that the board has a final say, including locking out those giving false information, even as she affirmed prudent use of funds under the programme.

“Once applied, the board assesses the applicant before being allocated a house, which they then pay a deposit and go ahead to rent-to-own. There is a criteria where the portal surveys an individual, including their income level. We evaluate individuals and can decline allocations to individuals considered wealthy or deep-pocketed who could be targeting the units for renting out in the future,” the CS said during a recent media briefing in Nairobi.

According to the ministry, the houses are being allocated on a ‘first come, first served’ basis, with those who have applied through the Boma Yangu portal and selected the preferred houses being prioritised.