Authorities and the Structure of Implementing Affordable Housing

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The urban population accounts for 76% of the total world population and it is expected to increase to 4 billion people by 2030. (UN-Habitat 2012). More and more towns are now getting converted into cities. This phenomenon of urbanization has brought with it enormous challenges manifested in the acute shortage of housing resulting to expansion of urban slums and informal settlements, unplanned urban sprawl, environmental pollution, deterioration, deficiencies in modern basic facilities, and general urban decay. (Aluko, 2010).Yet governments’ effort to provide affordable housing to the urban poor has remain a dream to be actualized.

The rapid urbanization has greatly impacted on the housing provision with the housing sector characterized by an increasing housing demand Vis a Vis low supply in Kenya. For instance, 150,000 units of houses are demanded yearly and only 30,000 units of houses are built by both private and public sector yearly and deficit of 120,000 units needed yearly. (UN-habitat 2015) Despite numerous efforts from non-governmental organizations (NGOs) and recent governmental activities, the trend is yet to be reversed.

Affordability of housing can be argued from two tenure perspective; Home ownership policy and tenant occupant policy. Home ownership policy has been give more priority than tenant occupant policy or in some country totally ignored, this can be evidenced from the definition of affordable housing by many authors. According to Bramley, 1994; Ludwig et al, (2002). Argues that affordability can be determined by the level and distribution of home prices, household income and the structure of financing costs. It is noted by Sheuya, (2007) that adequate housing finance will determine affordability of housing, because it can help to produce the essential components of housing namely: land, on-site and off-site infrastructure, building materials, as well as offsetting construction costs. Affordability is also perceived as related to incomes, housing costs, housing availability, employment, maintenance of the existing affordable housing stock, and patterns of new construction.

Housing co-operative as third sector in provision of affordable housing has been classified into three main types of co-operative namely; full equity, limited equity and non-equity, the first two correspond to owner-occupation and last correspond to renting. In a full equity co-operative, members purchases a share equal to the value of a unit of house which give him a right for occupancy. When they leave, they can sell their share at market value. Limited-equity co-operatives that attempts a compromise between affordability and increase in market value, when they leave, members receives payment based on formula to revalue the original share and lastly non-equity co-operative, members are allocated homes on the need basis after paying a nominal amount for a membership share, when they leave they only get their nominal share back. (Birchall, 2009) Housing co-operative also have three main tenure model. Limited housing co-operatives, acquire land and subdivide the land to the members. Multiple mortgage housing members owns individual units and land but common areas are owned and maintained by co-operative; continuing housing co-operatives-co-operative owns land, houses and common areas but members hold equal shares for all assets. (UNCHS, 1999), generally, housing co-operatives in Kenya can be described as limited housing cooperatives since co-operative members acquire dwellings in freehold ownership status after completion.

Housing co-operative has been historically, still remains the preferred choice for provision of affordable housing for majority of low income household globally. Understanding that affordable cooperatives have been developed under varying historical circumstances provides insights on how they could play a role in the future supply of affordable housing. In Estonia, housing co-operatives manage 60% of the country’s housing stock, while in Poland housing co-operatives own 20%, and in Sweden and Norway about 18% of the total housing stock and Switzerland 5% of the stock. In contrast, co-operative housing accounts for less than 1% of all homes in the UK, Canada and the United States (Moreau and Pittini 2012).

Housing co-operatives in Kenya has been referred as hybrid housing co-operative, members are able to get all the housing needs from the same co-operative for instance, acquisition of land, construction of a building and financing ‘one stop shelter shop” (Sally et al, 2007) Housing co-operative model popular in Kenya is limited equity co-operative whereby co-operative acquire and build affordable housing after completion members are handle in all the documents of ownership.

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Affordability of housing in urban area in Kenya has gone high even those with high-income and upper middle-income cannot affordable housing without a mortgage finance. Low-income households who constitute of 83% of people in urban area cannot afford quality housing. Affordability problem is also contributed by inappropriate policies relating to housing, where they exist, they are not clear and poorly implemented, and therefore widening the gap between the stated policy and policy outcome, as a result low income household live in slum and informal settlement and top income and upper middle groups occupy the housing units planned for the poor. (Mitullah 1993)

Recent changes in Economy Policy has led to deregulation and liberalization, creating new opportunities and challenges for housing co-operatives particularly on governance issues. It will demand for strong accountability and control of housing co-operative boards and management not only to state bodies, but also to other stakeholders. (Mullins et al. 2012)

According to Yates and Gabriel,(2006); Disney, (2006); Cairney and Boyle, (2004) argues that affordability problems is influenced by the level and distribution of homes prices, household income and structure of financing Today, affordable housing are faced with numerous challenges, such as adapting to increasing demand for affordable housing, lack of funds, issues of governance, inappropriate policies, socio-demographic change, improving the sustainability of the housing stock and, the environmental quality of the neighborhoods, and coping with unfavorable conditions in the financial and housing markets.

Statement of the problem Housing is where successive generations find home; to keep healthy, protect, develop, socialize, be educated and prepare one to adulthood. Housing is basic human need. But no country is yet to satisfy the delivery of affordable housing to various socio-economic groups that make up its populace. Affordable housing has been declared by international and national laws as fundamental human right.

Economic liberalization policy in Kenya enhanced the role of private housing markets and reduced the scope of public housing, with the retreat of the public sector in the provision of affordable housing, private sector were unable to cater for housing needs cross all income groups. Housing co-operatives gained ground as third sector organization among urban policymakers, scholars and community activities.

Housing cooperatives as collective organizations offer several additional advantages including; useful vehicles for building community, they are used to organize slum-dwellers into collectives to obtain group credit and to build self-help housing, they provide a long term shelter with different tenure system. housing co-operative is “one stop shelter shop” by providing variety of services to their members, they facilitate mobilization of resources together from their members hence lowering the individual transaction cost, fosters collective action and self-help. It also increases the creditworthiness of a member and lastly limits or prevents speculation housing co-operative The annual demand for affordable housing in urban towns is 200,000 units and the current annual production is 30,000 units both private and public sector creating a deficit 170,000 units yearly. However, government effort has not reversed the trend. For instance, public-private partnership build houses which consist of 80% of the new houses were for high-and upper middle-income people, while 83% of the demand is coming from low-income families and 89% of the urban population cannot afford a mortgage, generally this explain why low and middle income groups have been left out in housing development and as a result slums and informal settlement will continue to increase.

Thus the intention is to examine the policy, the structure and the role of the implementing authorities and their standards, with the intention of assessing whether the housing needs for low income groups can be met through them, or whether there is need for restructuring and/or extending the existing systems. The investigation covers the key agency, which implemented the UTP scheme and other institutions, which played a role in establishing, developing and applying the policy.

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