National Housing Corporation

National Housing Corporation (NHC) is a State Corporation established in 1953 as the Central Housing Board. The Board became NHC in 1967 following the amendment of the Housing Act Cap 117 of the laws of Kenya. The mandate of NHC is spelt out in the Act.

NHC endeavors to make Kenya a “decently housed nation”. To achieve this vision, the corporation plays a leading role in providing affordable housing and related services to Kenyans.  Objectives
Its main Corporate Objectives are to achieve a sustainable financial base,create an enabling operational environment for the implementation of the corporate plan, operationalize the Public Private Partnership framework, offer innovative and market driven housing, reconfigure Internal Business Processes within NHC in line with Best Business Practices, transform NHC into a learning organization, participate in the formulation, review, repeal and amendment of the existing legal framework governing operations of the Corporation and the housing sector and use of appropriate modern technology to drive supply of housing stocks

Products and Services
The Corporation offers the following products and services:

Tenant Purchase Housing Schemes
In this type of development, NHC develops houses for sale to individuals who pay a deposit (which is a percentage of the selling price) on application while the balance is paid within 18 years through monthly remittances. The interest rate on the loan is currently 13% p.a.

Rental Houses
In this type of housing, NHC develops houses for rental purposes to individuals. The houses are owned by NHC except where there is an agreement between NHC and a Local Authority for the latter to purchase the houses through a loan repayable in 40 years.

Development of Rural and Peri-Urban Homes
The Corporation provides financial assistance to individuals who wish to construct residential houses in the rural or peri-urban areas. The financial assistance is in the form of loans which are secured on first charge of the property being offered as security. The maximum amount currently advanced is Kshs 3 million at an interest rate of 13% p.a. The maximum repayment period is ten (10) years.

Other products and services
These include the following: Site and Service Schemes; Project Management; Provision of Building Plans to Customers; Development of Roof Trusses,; Doors and Door Frames; Provision of Estate Management Services; and Building Construction Supervision.

Achievements
The most visible achievements of NHC since its establishment include the following:-
Delivered over 44,000 housing units spread all over the country at an estimated cost of Ksh.5.6 billion (US$ 59m).
Advanced over Ksh.704 million (US$ 7.5M) in rural and peri-urban housing loans to more than 8,000 Kenyans.

The Corporation is currently developing 980 housing units at an estimated cost of Ksh.2.9 billion (US$30.5m).

ISO 9001:2008 Certification
The Corporation was awarded ISO Certification for Quality Management Systems in September 2010. The process to this certification involved reviewing all the Corporation’s activities which affect its customers. NHC reviewed and documented the processes of project implementation management, land acquisition, allocation of properly and advance of house loans. Techniques for handling customer complaints were also reviewed and documented.

To regularize the corporation’s Management process, a Quality Manual was prepared and circulated to all staff.

NHC Rating
National Housing Corporation is categorized by government as a commercial State Corporation. The implication of this is that NHC is expected to undertake its activities and declare a dividend at the end of every trading year. The Corporation has endeavored to realize this target within the constraints of ensuring that affordable housing is delivered to Kenyans.

NHC has therefore endeavored to address a market which many developers have left; this is the middle income Kenyans in urban areas including those outside the main towns of Nairobi, Mombasa and Kisumu. The Corporation for example recently completed development of residential flats in both Kakamega and Kisii towns and is now involved in development of tenant purchase housing in Nyeri town.

In our view, the Corporation is highly rated in the market since schemes are usually oversubscribed upon market notification.

Challenges

The main challenges facing the corporation include high cost and inadequate suitable land for housing development in urban areas, Increased costs of credit for both construction finance and long-term mortgage loans, increasing costs of construction, inadequate infrastructure to support housing development in urban areas and increase in national poverty dampening affordability

The Expanded Polystyrene (EPS) Panels Factory
The Corporation is currently developing an EPS panels factory in Mlolongo, Athi River District. This factory is expected to commence production in January, 2012.

The idea of putting up the factory was informed by the cost of housing construction, time it takes to construct a house using conventional technology. This has a direct bearing on the cost of production, diminishing supply of quarry stones, environmental effects of mining building stone and the huge shortfall in housing supply and the expectations of Kenya Vision 2030.

The factory and NHC Goals
NHC is a principal player in the Kenya Vision 2030 flagship project of developing 200,000 housing units. To be able to play its role effectively, an efficient method of developing housing was required and the EPS technology was identified as a way of doing this.

Market

Noting the high demand of housing in Kenya and the need to identify a cost-effective and efficient way of development, NHC’s short term plan is to meet its needs for the panels. In the medium and long term, the plan is to supply the local market since the Corporation does not wish to lose its main focus – housing Kenyans. In the long-run however, it hopes that the East African market will have seen and accepted the benefits of the EPS technology.

The CEO’s Vision for NHC
The Corporation’s Managing Director and Chief Executive Officer Mr. James Ruitha’s desire is to see NHC play a more central role in the delivery of houses to the lower middle and lower segments of the market.

“This is the portion of the market which has not been adequately catered for since majority of the developers perceive this as a risky category”, says the CEO. “The risks can be mitigated. As demand for housing expands as a result of the devolved government, it is my desire to see more mutually beneficial engagements with county governments in developing affordable housing. This will be especially important in view of the new investment that NHC has made in the EPS Technology”.

Mr. Ruitha believes that a more robust involvement of NHC in the rental market would be crucial in effectively stabilizing the prevailing rents.

EPS FACTORY PROJECT TEAM

Client : National Housing Co-operation
Architects :                                               Chief Architect- National Housing Corporation
Quantity Surveyors :                                 Chief Quantity Surveyor – National Housing Corporation
Electrical and Mechanical Engineering :        Chief Engineer – National Housing Corporation
Civil/Structural Engineers :                         Chief Engineer- National Housing Corporation
Manufacturing Equipment :                          Schnell Home
Technodynamica
Main Contractor :                                       Ernie Campbell
Electrical Works :                                       Burhani Engineers
Plumbing :                                                 Vagda Plumbers