The World Bank has said that Kenya needs to build two million affordable city homes to meet its housing deficit.The World Bank also said this will help stem slum explosion.
WB noted that investment in housing would also create jobs, improve economic growth and strengthen the east African country’s financial sector.
in its latest report the World Bank observes that a lot of Kenyans are unnecessarily living in slum dwellings due to limited supply coupled with lack of affordability.
The World Bank cautions that the problem will only become worse over the next decades unless a serious focus on housing and the finance of housing for the average Kenyan is taken.
While only one in three of Kenya’s 44 million people live in cities, its population growth is largely urban. The report also show that most Kenyans will live in cities by 2033.
Although Kenya needs to produce 244,000 homes a year to meet demand less than a quarter of this number are being constructed it said.With rapid urbanisation, the situation is worsening as Kenya’s cities are growing by 500,000 people a year, it said.
Kenyan capital Nairobi is one of Africa’s most expensive cities for housing, with 2013 prices almost triple those of 2000, it said.
Africa has the fastest growing cities in the world, with 40 percent of its one billion people in towns and cities, but most new homes target the middle and upper classes as it’s easier to make a profit from high-end sales.
One of the main problems is a shortage of finance.
There are fewer than 25,000 mortgages in Kenya as banks have limited access to long-term funding, it said.
The World Bank observes that More Kenyans could own their own homes if the private sector set up a mortgage refinance company to provide cheap, long-term funding to mortgage lenders from the capital markets and other investors.