The Kenyan Government has adopted a 5-Point Plan for African Governments to address affordable housing.
The adoption followed a declaration by the African Union for Housing Finance (AUHF) members at the just concluded 35th yearly General Conference of the Union in Cape Town, South Africa from the 4th –6th of November, 2019.
The event was themed ‘Realising Affordability in Global Housing Markets’ focused on the key issues, opportunities and innovations in efforts to address housing affordability across the world.
Kenya is one of the 35 active members of the AUHF.
The members acknowledged that housing affordability challenges are especially acute in African countries, exacerbated by unfavourable macro-economic conditions, challenging labour market dynamics, municipal capacity constraints, as well as the pressures of urbanisation and climate change.
Government capacity to address the challenge on its own is limited worsened by higher government debt and lower revenue, as a result of economic downturns being experienced in most African countries, have limited the budgetary room of policymakers. At the same time, governments have an enabling and catalytic role to play in supporting the development of an enabling macro-economic framework and the growth and appropriate targeting of housing finance markets, while also developing policies conducive to affordable housing development.
Nevertheless, there is significant activity and innovation among a growing sector of housing practitioners increasingly interested in addressing the housing affordability challenge. Their efforts are evident in initiatives in all links of the housing delivery value chain.
Kenya and AUHF members were urged to pursue five key recommendations:
- To set and pursue explicit targets for reducing the time and cost of key statutory and administrative processes on which housing delivery depends, such as development and zoning approvals, occupation inspections, land titling, infrastructure connections, and services clearances.
- To strengthen property and collateral registration, maintenance and foreclosure mechanisms, improving transaction timeframes, and to ensure the transparency of the collateral registry through free access to record-level data. We recommend the automation of deeds registries.
- To pursue macro-economic policy and financial regulation and taxation conducive to long term, local housing investment, focusing explicitly on interest rates and inflation targets, as well as other measures that lower maturity premiums and credit risk premiums, and leverage the utilization of collateral value. These measures, as well as explicit attention to local long-term capital (pension funds, institutional investors) will further stimulate investment and the availability of affordable housing finance.
- To support the affordable housing delivery process through enabling or otherwise incentivizing the supply of well-located land and bulk infrastructure.
- To support the Data Agenda for Africa, agreeing on mortgage lending and other housing-related reporting standards to enable cross-country comparability, supporting the development of an effective and comprehensive credit reference system that efficiently covers all financially active consumers and stimulates market transparency, and explicitly supporting principles of data transparency and regular reporting.
“We call on governments at the regional, national, state or provincial, and local levels to support the vision for adequate, decent and affordable housing for all, by actively creating an enabling environment for investment in affordable housing.”
The declaration further committed the AUHF to carry on with its mandate, in terms of lobbying and advocacy, information dissemination, capacity building and training, member profiling, and supporting networking and deal-making. The individual signatories commit themselves to respond to the breadth and diversity of demand, giving special attention to lower income earners, and prioritizing affordability.