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month.
“It (KHRC) is expected to operate as a private sector driven company with a public purpose
of developing primary and secondary mortgage markets by raising long-term funds from
capital markets, thus providing access to affordable housing finance,” Mr Rotich said.
Barclays Bank of Kenya managing director Jeremy Awori has singled out red-tape in
registration of property and approval of construction permits as a disincentive to investors in
housing as it builds up inefficiencies.
Getting approval for construction permits takes 159 days in 16 procedures, while it takes
investors 61 days to register property in nine procedures, the World Bank Group said in its
annual “Doing Business Index, 2018” last November.
“We need to remove the friction from the system. We haven’t even got 30,000 mortgages in
this country, yet you are hearing about these high number of housing units,” Mr Awori said.
“If we can make it easier for you to register a charge and do a transfer of property so that
instead of taking weeks or months, it happens within a week, I think we would be in a much
better system.”
The Treasury in 2016 halved corporate tax for developers who put up at least 400 low-cost
residential houses to 15 per cent to encourage construction of at least 200,000 affordable
units every year.
The 0.5 levy on total cost of housing by the National Construction Authority and the 0.1 per
cent with a minimum of Sh10,000 charge by the National Environmental Management
Authority, were also scrapped that year.
“The government’s initiative, as far as tax exemption is concerned, is wonderful,” said Sirtaj
Singh Bedi, a senior manager for business development in Africa at L&T Construction, the
India-headquartered construction giant.
“But what’s important now to an investor is the rate of return on investment and how we are
going on with the PPP (Public Private Partnership) format because it is not clear who’s
going to be husband and who’s going to be wife.”
Housing and Urban Development Secretary James Macharia has said 35 private developers
have been identified for the low-cost housing project, with the first task being building of
8,000 low-cost houses on 55 acres at Mavoko in Machakos County.
Incentives to private developers will also include development of support infrastructure such
as access roads, water, electricity, health centres and schools, with cash to be drawn from
the proposed National Social Housing Development Fund.
Support will largely be supported by the National Social Security Fund, the State-run
retirement scheme.
“Too much theory does not help. Let’s get practical. Let the government give the go-ahead,”
said the strategy supervisor at Avic International Real Estate Kenya, Mr Brian Kiragu.